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Secured Credit Cards
Both secured and unsecured cards can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not. This is why an unsecured card is the more popular choice, even though they are definitely harder to get than a secured card.
The required savings deposit for a secured card usually ranges from a few hundred to several thousand dollars. Your credit line will be a percentage of your deposit - typically 50 to 100% - and usually, a bank will pay the interest on your deposit. With a secured card, you also may have to pay application and processing fees - sometimes totaling hundreds of dollars. Before you apply, be sure to ask what the total fees are going to be and whether or not they will be refunded if you're denied a card.
Typically, a secured card requires an annual fee and has a higher interest rate than an unsecured card. This is why you should really only look for a secured card, when all options to getting an unsecured one have been exhausted.
Common Questions
- Can I apply for a credit card?
If you're 18 years of age or older (the age limit might be lower in some states) and are a U.S. citizen, you...more - Do I have to have a bank account to get a credit card?
In most cases, credit card companies won't consider issuing credit to someone who doesn't have...more - Is it necessary to have a bank account with the bank that issues the credit card?
Not in most cases. As long as the credit card issuer can determine your credit worthiness, it doesn't matter where your...more - Can I apply for more than one credit card at a time?
You can apply for as many credit cards as you want, but you should be aware that multiple credit card applications can...more - What about bad credit?
There are lenders who specialize in providing credit cards for those with bad credit. Commonly known as secured credit cards, you might need to...more
