What Is A Secured Credit Card?
Updated: Sep 22, 2020
The Benefits of Secure Credit Cards
Secured credit cards are the most viable option for you because it offers various benefits. Of course, you will be required to make a cash deposit which acts as a collateral to secure your card against losses. This money can be kept by the issuer of the card if you default on the payments. However, if you have a good standing, the deposit will be refunded after some months upon closure of your account. Let us have a look at some of the benefits enjoyed by individuals with these types of cards. You can improve your credit score The cards give you a good platform to rebuild your credit score. Financial reports usually capture the card balance and other monthly payments which will be used in determining your financial viability score. So if you want to improve it you should ensure your balance is paid in full. You also need to make payments before its due date since it plays a significant role in the calculation of your scores.
You can enjoy some benefits reserved for unsecured card holders Another significant benefit derived from having the card is that it is inclusive and convenient. The card holders are eligible to enjoy some of the benefits extended to individuals who use unsecured cards. Some of these benefits include making a rental and hotel reservations for transactions that require you to use the card. As a secured credit card holder, you will also be protected against fraud by the card issuer and you can use it in various retailers globally without any restrictions.
You can qualify for the card even with poor score A good score is usually considered especially when applying for an unsecured card. However, this limits people who have a low score. Well, on the other hand, you will be eligible to apply for a secured card even if you have a lower score. This is attributed to the fact that you will be making your purchases only to pay at a later date because the cash deposits act as collateral in case you fail to make the payments. It is universal If you like traveling abroad this is the best option because it is a universally accepted form of payment. When applying for a secured credit card it is important to consider if there are foreign transaction fees. I would suggest you get a card from a reputable issuer which offers zero charges to make it more convenient when traveling overseas. Conclusion Secured credit cards offer lots of benefits that can be enjoyed by all users. Some cards allow you to earn rewards upon making purchases. You can also offset your security deposit by making prior payments before the charges accrue. This collectively improves your scores hence it can be a foundation to re-establish good credit. This type of card could be an easy option since they offer you not only value for your money, but are also convenient and allow for faster services.