Bad Credit? What You Should Know About Secured Credit Cards
Article from Motley Fool:
Having bad credit doesn’t make it nearly as difficult to operate in a highly credit-based society as it has in the past. There are a lot of options for people with bad credit to be able to make purchases with a plastic card, and even rebuild credit while doing so.
Secured credit cards, also known as prepaid credit cards, offer the opportunity for consumers to make credit card purchases and begin improving their credit scores, but they can also have some potential pitfalls. Here are some things you should know about opening up a secured credit card.
How they work
A secured credit card is a line of credit based on a cash deposit, or collateral. For example, if the consumer opens up a $ 500 line of credit, he or she must put down a cash payment of $ 500 to secure future transactions. The issuing bank may offer cards with a fixed line of credit, or it may offer some ways to increase the credit line, including adding more cash to the initial deposit.
As the customer uses the card and makes regular and timely payments, the bank may report the activity to one or more of the three major credit reporting agencies, Equifax, Experian, a…………………continues on Motley Fool
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