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. Thats why moderate use of a secured credit card is a good idea for folks whove 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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