Secured Credit Card

If you are having problems getting approved for a traditional credit card due to a poor credit history, a secured credit card is an option. A secured credit card can help to re-build your credit history.

When you open a secured credit card account you are required to also open and maintain a savings account as security for the card. The amount of credit available is directly tied to the amount in your account. The line of credit is a percentage of your available account balance, anywhere form 50% to 100%. The minimum amount required also varies form hundreds to thousands of dollars. The required savings deposit for a secured card may range from a few hundred to several thousand dollars. You usually will be paid interest on your account balance, just like a traditional savings account.

When you apply for the account you may have to pay processing and application fees. It's best to ask what these fees will be to avoid unwanted surprises. Also ask if the fees are refunded if you are denied a credit card.

The interest rate for secured cards are typically higher than a regular credit card and charges an annual fee.

Questions to ask:

• What are the fees for the application, processing, and security deposit?
• What are the eligibility requirements like age or income ?
• How much is the interest rate and annual fee?

Beware of Credit Card Scams
There are some comapnies that advertise credi tcard offers and leave out imoprtanat information such as if the account is secured. The ads may lead you to believe you are offered a traditional credit card when in fact it is secured. There is usually a "900" number associated with it , which you are then charge for the call. The application and processing fees for these credit cards may be unussually high. The FTC (Federal Trade Commission) has taken action against these companies.

Information that may be left out of the deceptive ads:

• The charge for the phone call to the "900" number. Fees can range from $2 to $50 or possibly more.
• The fact that the credit card carries a higher interest rate
• There is an annual fee for the card.
• The requirements like application, processing fees and security deposit.
• Requirements for eligibility like age or income