Secured Credit Cards are the Fastest Way to Get Credit
Bad credit or no credit is a problem best solved with a secured credit card. If credit card companies have recently rejected, you may find applying for a secured credit card will be the solution. Virtually all secured credit card applications get approved.
Secured credit cards are easily approved because the applicant places a certain dollar amount that the credit card company requires as collateral. Once the funds are deposited the credit card is approved. The bank after receiving the funds will assign a credit limit. The credit limit for a secured credit card can be dollar for dollar of the amount deposited. For example, if you deposit three hundred dollars, three hundred dollars will become your credit line. Some credit card companies will give you a larger credit line to the amount of money deposited. Secured credit cards get approved because banks receive sufficient collateral in case the account goes into default. With the risk of loss removed the credit card company will now extend credit.
Secured Credit Cards are Better Than Prepaid Cards
The advantage secured credit cards have over prepaid cards is that secured credit cards help people build credit. Prepaid cards do not report to the three major credit reporting agencies.
What many people don’t know is that secured cards and prepaid cards cost about the same after all the fees are added up. It is a no-brainer; secured credit cards are better. Secured credit cards are better because for the same money a card holder with bad credit can build and improve their credit score.
Over time with good payment history, a secured credit card company will raise your credit limit. With a prepaid credit card offer your limit is based on the amount of money you have deposited into your account.
Secured credit cards offer many benefits that prepaid cards do not. The most significant benefit being the ability to build credit. Secured credit cards are all different. Read the terms and conditions of each card before applying. The interest on secured cards tends to be higher than most credit cards. Paying off the balances each month is a good way to save on interest charges and a good way to build a higher credit score.