You’re missing great benefits if you haven’t applied for a secured credit card. These cards provide an easy way to build or rebuild your credit history, which is extremely important for anyone trying to qualify for a loan or financing. So unveil which is the best secured credit card and how it can help you achieve your financial goals!
A secured credit card is a great way to build your credit history. However, if you have not yet established a credit history, or if yours is limited to short-term offerings such as store cards and payday loans, it can be challenging to find lenders willing to extend you unsecured credit.
A secured credit card offers just the solution you need. By using the money you put down as collateral (usually $200), this type of loan allows potential borrowers without much history on their record to obtain a line of credit and use it responsibly over time.
In the words of experts at Lantern by SoFi, “Building credit through secured credit cards can help you build up a positive credit history for when you’re trying to apply for a mortgage, car loan, apartment, or any other type of credit.”
Avoidable interest fees
When you use a credit card, there is no avoiding interest. Even if you pay off your balance in full every month, the bank still charges a fee for using their money. However, with a secured card, this is not an issue. If you pay your balance on time and in full, then no interest will be charged to your account and no late payments that can cause further damage to your credit score.
To avoid paying unnecessary fees and getting into trouble when it comes time to apply for loans or lines of credit later on down the road, consider getting yourself one of these secure cards today!
Better scope for approval
- The bank will consider your credit history.
- The bank will consider your income.
- The bank will consider your assets.
- The bank will consider your credit score.
- The bank will consider your income-to-debt ratio.
You’ll be required to pay a deposit when you apply for a credit card. This is essentially an insurance policy for the bank if you don’t make any payments. The amount can range from $300 to $500, and it will get refunded once you have made at least 12 consecutive payments on time (as long as there are no late payments or other violations).
If you cancel your card before making those 12 payments, then it won’t get refunded. In addition, the money will not be returned if there are any missed payments or other violations of the credit agreement that led to this particular payout being awarded in the first place.
Fraud protections include:
- Security features, such as a chip or card verification code.
- Fraud monitoring and alerting you to suspicious activity on your accounts.
- Fraud resolution assistance in case of identity theft.
These five reasons must have given you a good sense of why it’s worth considering a secure credit card for your everyday spending needs.
As mentioned earlier in this post, when it comes to choosing the right option for yourself or your family, there are many factors to consider. But if you’re looking for a way to improve your credit score while keeping your finances safe from fraudsters and hackers, applying for one of these cards could be just what you need!