What are Secured Credit Cards All About?
Are you interested to know the answer to the question raised above? If you are then, this article will surely help you understand secured credit cards better.
How do Secured Cards Work?
As their names imply, secured cards come with a security or collateral requirement, in the form of an initial deposit. Such deposit serves two important functions. First, it serves as a guarantee for the repayment of your future credit card charges. In case you decide to default or skip on your monthly bills, your card issuer can immediately tap on the deposit you have provided to settle your unpaid financial obligations.
Second, the initial cash-out serves as the basis for the credit limit that will be imposed on your card account. Say you were asked to submit $750 as security deposit for your line of credit. This means that you can also use or charge as much as $750 on your secured credit card.
What are some of the common features of secured lines of credit? Apart from the initial deposit requirement, secured card accounts usually come with low interest rates, flexible payment terms, low credit limits and easy-to-prepare application requirements. No wonder, many consumers today are starting to ditch their old credit cards for these affordable and easy to take out card accounts.
Important Reminders for Prospective Cardholders
ï‚· To score the best deals we suggest that you take the time to shop around and compare what each issuer is offering. Look closely at the rates of interest, security deposit requirements, credit limits, payment terms and options, and the eligibility requirements imposed on various card programs. Then try to compare them with your needs, spending habits and budget. By doing so, you will most likely end up with a line of credit that will definitely work to your advantage.
ï‚· Stay away from secured credit cards with suspiciously good features. Be firm in turning down offers for secured cards with incredibly high credit limits, extremely low interest rates and no eligibility requirements. After all, these very attractive features are often used by scam artists and fraudsters to rip off card applicants. So to avoid becoming a victim of popular credit card scams you should resolve to steer clear from lines of credit with too-good-to-be-true features.
ï‚· Take out secured credit cards only from reputable organizations. Look for firms that are not just willing to give you what you want but more importantly companies that have excellent track records in terms of dealing with consumers, in general, and those which are accredited by the federal or state government.
 For online card applicants, make it a point to check out the security features of the site or webpage you’re currently viewing, before filling out and submitting online forms. Look for the code https or the padlock icon in the URL bar or the logo of organizations that offer accreditation for online security. By doing so, you can be sure that it is safe to disclose and transmit sensitive information through that sign up page or website.
 Review the terms and conditions that will apply to your card program before signing your contract. And in case you have additional queries about the credit card you’re planning to take out then, don’t hesitate to contact the customer service representative or credit card agent of the firm and ask for more information.
