Make sure to find out the application fees, finance charges, annual fees, accrued interest on the deposit, available line of credit and minimum savings deposit associated with the card.
Here are few things to look into a secured credit card before applying for it-
- Get a list of all the secured credit cards by contacting your bank, or credit union. You can also find it online at bankrate.
- All secured cards charge an annual fee. But this fee varies considerably with issuers. So, enquire about the fee beforehand. As why to pay a high fee when you can get a card for much less.
- Some secured credit cards charge an application fee, while some don’t. Don’t just go for the first offer you come across, but look for a card issuer that will process your application fee for free.
- Determine how much you can afford to put down as deposit. As applying for secured card require an amount to be deposited at first and this amount determines your credit limit. Choose one that fits your financial style and goal.
- Evaluate the interest rate before applying for a secured card. The rate may range from 9.9 to 20 percent. Keep in mind that as long as you make your payments in time, you won’t incur any interest fees.
- Many cards also charge monthly account fees and credit limit increases fees or to access your bill online. Enquire and find out for secured cards that do not charge for these services.
- After applying for secured card check that the card issuer reports to the credit bureaus. If they don’t or do delay in reporting to the credit bureaus, having the secured card won’t improve your credit.
- Frequently ask the card issuer how long it will take to qualify for an unsecure credit card. Secured cards charge higher annual fees and interest rates than regular credit cards. So, make regular timely payments, to migrate to an unsecured credit card as soon as possible, by 12 months or less.
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