Secured Credit Cards

Posted by admin on Oct 28, 2010

In personal financial planning of a credit card, we have to change the mindset first. Many people have in their mindset that is having a credit card means an extra money. Well actually it is totally wrong! Credit card is not extra money, or side money for us. It is simply a way of payment. It help us as a reserve money to pay an accidental expenses, such as a hospital's bill. Usually in emergency situation, a credit card deal is very helpful to pay the first-aid for a patient before continue to next phase of treatment.

Even it looks easy to obtain a credit card, some people still have difficulties when applying a credit card. They are rejected. Some reasons may appear why credit application rejected. A bad credit history in someone portfolio is one of the reason. So how one who facing this situation could keep apply for a credit card?

Secured credit cards can be a good alternative for consumers who have a poor credit history who do not want to pay an annual fee prohibitive, but it intends to rebuild your credit.

Although secured credit cards charge an annual fee, often relatively low, which can be a great relief for people with bad credit rating.

When approving the account of a secured card, consumers open a savings account that guarantees the credit limit on the card. Failure to return the borrowed funds, the issuer can take money from the savings account.

In other respects, a secured credit card is much like the others. This type of "plastic" can be used to make purchases wherever credit cards are accepted. And this makes a significant difference compared with other credit cards for people with bad credit history, and that can only be used for certain purchases from a catalog of limited size.

When the card holder pays regular statements on time, you can restore or rebuild your credit score. After demonstrating a solid payment record, the issuer likely will convert the account into a unsecured credit card with a higher credit limit.

Consumers who plan to close credit cards that have a high annual fee and an exchange for the insured, may first request a secured credit card. Thus, keep an open line of credit on your credit report.

Once consumers get their new secured card, you can cancel and stop paying other expenses.

May this article helpful for our personal financial planning.

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