Bank Secured Credit Cards
Posted at by ifydcat on category CreditEven though there are many types of credit cards out there for consumers, there are few for those with bad credit. Those who are looking to repair their credit have a few options available, one of which is the bank secured credit card. This credit card can help you to repair your credit, as it works in conjunction with your savings or checking account.
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Bank secured credit cards look and work just like traditional credit cards, although they use your bank account as collateral. Anytime you aren’t able to pay your credit card bill at the due date, the bank will take the money out of your account. This way, there is always money there for the bank, in the event that you are unable to make your payment.
Bank secured credit cards are also ideal for those who have a bankruptcy or simply don’t qualify for a line of credit due to bad credit or no credit history. These credit cards show your bank that you are able to pay your monthly dues, and that you are taking the necessary steps in rebuilding or building your credit.
Over time, if you remain responsible and pay your bill on time, your bank may give you an unsecured line of credit – known as a standard credit card with no collateral.
Bank secured credit cards only allow you to spend the money that you have in your account, so there is no need to worry about debt. If you cannot make a payment, the bank will simply automatically deduct it from your account. Even if this is a great backup plan, you need to always pay bills on time.
Just like other credit cards, bank secured credit cards do have disadvantages that can hit you like a ton of bricks should you use the card irresponsibly. Anytime you don’t pay your bill on time, the bank can hit you with high interest charges and late charges.
If you keep on skipping your bills, charges and fees could keep getting higher and higher, which could eventually drain your entire bank account. On the other hand, if you pay bills on time, there won’t be any problems in being hit with charges.
For those who have bad credit or need to start building credit, a bank secured credit card is a great place to start. These cards can lead you to an unsecured credit card, providing you pay your bill on time.
Almost all banks offer these credit cards, all you have to do is ask. Once you have kept your credit card in good standing for a period of time – you’ll have the satisfaction in knowing that you are taking the right steps in rebuilding your credit.
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