What is a Secured Credit Card?
- What is secured credit card.
- The advantages of secured credit card.
Credit card links with your savings account. You can get access to your account by the credit card. Credit card is used for the purpose of purchasing of goods and acquiring of services on the promise of the holder to pay for the same.
Secured credit card is one of the types of the credit card in which the holder of the card has to pay the amount in credit to the issuer. The cardholder has to deposit 100% to 200% in advance to the credit card issuer for the amount needed to be credited. The credit card issuers will also offer the secured credit card by taking as low as 10 % of the total desired amount. This type of secured credit cards will be issued in the field of special savings account. The secured credit cardholders have to be noticed that they will lose something if they fail to repay the balance. Secured credit cardholder has to make regular payments. The deposit for the credit card will reside in the hands of the credit card issuer. That is the deposit paid for the credit card will be in the control of the company which issues you the secured credit card. Whenever you fail to repay the payments then your deposit will be used. Generally for one or two missing payments your deposit will not be deducted. In general, your deposit for the secured credit card will be used as offset when your account is closed. The account is closed in two way that is by the request of the customer your account will be closed or because of severe delinquency your account will be closed. That if the account has the failure of 150 to 180 days your account can be closed. That means if your account is delinquent for less than 150 days, then you will get continue interest and fees. This may result in having the balance that may be high then the credit limit of the card.
For a person who has a poor credit history or for a person who has no credit history can also get the secured card. That is obtaining the secured credit card is not based and will not be influenced by the credit history of the person. For the people having poor credit history it is hard to secure a credit card and hence the secured credit card will be the better option for them.
You can get the secured credit cards with both the logos Visa and Master Card. Generally when compared with the credit cards the service charges and the fees in the secured credit card will be high. For the people having the long delinquency it is recommended to prefer the secured credit card than the unsecured credit card. In some situations like having long delinquency the total costs in the unsecured credit cards may be comparatively high than the secured credit card.
