Establish or Repair Credit with A Secured Credit Card

With secured credit cards, your credit line is determined by the amount of money that you use to secure the card. Generally speaking, your credit line will range from 50% to 100% of the amount of money you deposit into a special savings account setup by the secured credit card company. When you make regular, timely payments to a secured credit card account, you are working to repair or establish your credit standing.

Having a damaged credit rating is bad, but having no credit rating can be just as bad in the eyes of many creditors. That’s why moderate use of a secured credit card is a good idea for folks who’ve never had credit extended to them – like high school or college students — because the spending activity is very likely to be reported to at least one of the three major credit bureaus (TransUnion, Experian or Equifax.)

Since a secured credit card is backed by a special savings account it can be much easier to obtain than a standard credit card. However, there are some disadvantages to secured credit cards that you should be aware of:

Disadvantages of Secured Credit Cards

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