| A secured credit card is one that requires a card | | | | bank. However, not only is there little risk, but |
| holder to place a deposit before opening an account. | | | | consumers will be required to pay certain fees, |
| The size of the deposit will determine how much | | | | including application and annual fees, which procure a |
| money the card holder will be allowed to spend. For | | | | profit for the issuing financial institution. This allows them |
| example, if a consumer places a $300 deposit when | | | | to offer secured credit cards to consumers with bad |
| opening their account, the credit limit of the card will be | | | | credit, without a very large chance of the consumer |
| anywhere from 90 to 150% of the deposit. If a | | | | not paying their bill. |
| consumer then decides that they would like a higher | | | | Secured cards help a consumer's credit in a few |
| credit limit, he or she will be able to make an additional | | | | different ways. Simply having an active, revolving debt |
| deposit and raise the amount of money in the account. | | | | will help raise a card holder's credit score. Additionally, |
| Additionally, when a consumer continues to make | | | | continuing to pay the card bill each month will show |
| credit card payments and use their card responsibly, | | | | financial responsibility and improve one's credit. |
| he or she may be rewarded by enjoying a higher | | | | However, for the most effective credit boost, card |
| credit limit offered by their issuing bank. | | | | holders should be sure to keep their balance low and |
| Consumers that have a bad credit score will find it | | | | pay all bills on time, as this will also be taken into |
| difficult, if not impossible, to obtain any new credit cards | | | | consideration when evaluating credit. |
| or loans of any kind. In the case that they do need to | | | | Unfortunately, consumers must be sure to carefully |
| open a credit card or obtain a loan, they will generally | | | | choose a secured card. Some cards will require card |
| suffer from high fees, high interest rates, and overall | | | | holders to pay very high fees or purchase expensive |
| expensive credit. Fortunately, obtaining a secured credit | | | | insurance, which will make make their financial situation |
| card is a great way of improving one's credit, while | | | | worse, instead of better. When selecting a prepaid |
| providing a source of extra cash in case of an | | | | card and improving credit, it is important to carefully |
| emergency. | | | | examine all aspects of the card, in order to choose a |
| Because consumers are required to make a deposit | | | | financially beneficial option. |
| on a secured card, there is very little risk to the issuing | | | | |