Build Your Credit with a Secured Credit Card

Build Your Credit with a Secured Credit Card

“The only things certain in life are death and taxes.” Well, that might have been true in Benjamin Franklin’s day, but in the 21st century, you might as well add credit cards to that list. Some places, like hotels and car rental agencies, require a credit card, even if you plan on paying cash. However, if you’re new to credit or have to rebuild your credit after a major life event, like a divorce or job loss, you may not be eligible for traditional credit cards but you may be able to acquire a

secured credit card instead.

1. What is a Secured Credit Card?

A secured credit card is similar to a debit card but instead of being tied to your checking account, it’s tied instead to a cash deposit you’ve made to “secure” the card. If you put $500 on the secured credit card, you have a $500 credit limit. So why go with a secured card? Because unlike debit cards, secured cards report to the credit bureaus, so on-time payments, extra monthly payments and good behavior will build your credit score.   After a while, if you manage your account responsibly, your credit line may increase automatically without additional deposits.  Many secured credit card issuers have been known to change the status of your credit card from secured to unsecured after a specific amount of time paying on time, keeping your balance you carry around 30% of your credit limit and never going over your credit limit.  Once they do this, they typically refund your deposit to you in the form of a check.  Make sure you always keep your address and telephone information

up-to-date.

2. Where Can I Get a Secured Credit Card?

About half of the nation’s credit unions offer secured cards, so if you’re a member of a union, that’s a good place to start. One drawback with credit unions is that many only report to one credit bureau and if you’re looking to establish or rebuild your credit, you’ll want to make sure the card is reported to all three credit bureaus. If you’re not a member or your union doesn’t offer one, check out our recommendations for secured credit cards at the bottom of this article.  .

3. How Much Will a Secured Card Cost Me?

As with any credit card it pays to read the fine print. Annual fees, application fees, and monthly charges can eat up your entire balance, so make sure you shop around to find the best deal. Also, some things, like the application fee, can often be negotiable… so, negotiate.

4. How Much is the Normal Deposit?

Secured credit cards normally require an initial deposit in the range of $200-$2,000. This will be your credit limit, and over time, you may build unsecured credit on top of that.

5. Do All Secured Cards Report to All Three Credit Card Bureaus?

Having a credit card goes far beyond being able to buy shoes online. The most important part is that you’re building credit, and this can only be done if the issuer is reporting your on-time payments and other factors to the credit reporting bureaus. Some will not report, some will only report to one, and others send your information to all three. If you start receiving mailers from other credit cards after several payments, this is an indicator that they do report; however, it’s best to read carefully through the terms and conditions – or simply ask the issuer up front –and choose a card that does report.

6. How Long Will It Take Me to Qualify for a Regular Credit Card?

If you manage your new secured credit card impeccably, the credit card issuer will want to keep you as a customer. Typically after a year of good credit card management, the issuer will automatically initiate your move to unsecured credit.  If after a year your issuer does not automatically upgrade your account to a traditional unsecured credit account, give them a call and ask them to do so.

7. What Happens to the Deposit?

Whatever money you put down as a deposit gets put into an account of your choice, usually a savings account, money market or certificate of deposit. You will earn the same amount of interest on this deposit as you would if you had put it in a normal bank account. After you close your secured credit card, the deposit will typically be held for a couple of billing cycles to cover any stray charges. Ask the issuer for exact time periods.

8. What Are the Best Ways to Use a Secured Card to Build Credit?

Just like with an unsecured credit card, you’ll want to pay on time and keep your revolving utilization – the proportion of your balance in relation to the credit limit – as low as possible. Using the card regularly and paying in full will also show that you are a good credit risk. However, advisors warn to shed your secured credit card as soon as possible for unsecured credit. Even though secured cards may seem safer and encourage savings, because of their higher annual fees and interest rates, an unsecured card will be better in the long run. So, use the secured credit card as a stepping stone to build credit and learn responsibility, then move on.  If you have your secured credit card account for two years or more and it has been changed to a unsecured credit card, do not close the account before you negotiate a lower interest rate with no annual fee to keep you as a customer.  Closing your credit card accounts that have been in good standing for two years or more will cause your credit score to drop.  Yes, you can be penalized for closing a credit card account that you have kept paid on time and under the credit limit.  As odd as it sounds, it will take you a while to build your score back up after closing an account.

Our recommendations for secured credit cards are as follows and we update the list regularly:

Open Sky by Capital Bank                              $200 - $3,000. 17.5% APR. $29 Annual Fee.

Unity Visa by OneUnited Bank                 $250 - $10,000.  17.99% APR. $39 Annual Fee.

USAA Secured Platinum Card                  $250 - $5,000.     9.90% APR.   $35 Annual Fee.

USAA Secured Platinum American Express Card  
                                                                                $250 - $5,000. 9.90% APR. $35 Annual Fee.

First Progress Platinum Prestige MasterCard  
                                                                            $300 - $2,000. 11.99% APR.    $44 Annual Fee.

primor™ Secured Visa Classic Card   $200 - $5,000.       13.99% APR.    $39 Annual Fee.

primor™ Secured Visa Gold Card        $200 - $5,000.          9.99% APR.    $49 Annual Fee.

Secured Cards Are Always A Great Way To Build or Rebuild Credit--Here Are Our Pics For This Year:

UNITY® Visa Secured Credit Card - The Comeback Card™

• A secured credit card designed to help rebuild your credit
• Reports to all 3 major credit bureaus
• Low, fixed (Not variable) interest rate of 17.99%
• Your security deposit can get you Min. $250/Max. $10,000 credit limit
• Manage your account online
• No application fee or penalty rate
• Credit line secured by fully-refundable FDIC insured deposit submitted with application

Apply Now!

USAA Secured Platinum American Express Card

• It's a real credit card - not a prepaid or debit card, that helps you build or improve your credit score.
• When you apply - you'll also be opening a USAA 2-year Certificate of Deposit (CD), an interest-earning deposit account that has a two-year term and a $250-minimum initial deposit.
• Your CD is a security deposit - the money you put in upfront, from $250 to $5,000, is the card's credit limit.
• Earn interest on your CD - your deposit is guaranteed to grow. Plus the money is yours to keep as long as you don't default on your payments.
• Start building your credit - opening a CD lets you get a credit card even if you don't have a credit history or have bad credit.
• Before starting your application, USAA will ask you a few questions to establish your online access and eligibility with USAA.
• If you are not eligible, USAA credit cards and other products may still be available.

Apply Now!

USAA Secured Platinum Card

• 
  
• It's a real credit card - not a prepaid or debit card, that helps you build or improve your credit score.
• When you apply - you'll also be opening a USAA 2-year Certificate of Deposit (CD), an interest-earning deposit account that has a two-year term and a $250-minimum initial deposit.
• Your CD is a security deposit - the money you put in upfront, from $250 to $5,000, is the card's credit limit.
• Earn interest on your CD - your deposit is guaranteed to grow. Plus the money is yours to keep as long as you don't default on your payments.
• Start building your credit - opening a CD lets you get a credit card even if you don't have a credit history or have bad credit.
• Before starting your application, USAA will ask you a few questions to establish your online access and eligibility with USAA.
• If you are not eligible, USAA credit cards and other products may still be available.

Apply Now!

Capital Bank Open Sky Secured Visa

• Start today to rebuild or establish credit
• Low APR
• Credit Lines Up To $5,000
• Monthly Credit Bureau Reporting
• Works Everywhere Visa is Accepted
• No Credit Check for Approval
• Savings Chart
• Rates & Disclosures
• Rush Shipping Available
• Voted #1 in Secured Credit Cards

Apply Now!

Remember: Always try to keep your credit card balances below 20% of your credit limit in order to retain an A Grade in this area of the FICO scoring system.  

If you do not, you will be denied credit much faster than if you do.  

Take advantage of 0% Balance Transfers to avoid paying finance charges for 30 Days, but be

 sure to read the rates and disclosures to make sure they don't charge a fee for transferring your

 balance from another card to their card.

Two Great Financial Tools To Start Rebuilding Your Credit Now

Secured Credit Cards Are a Great Way to Rebuild Credit

Secured Credit Cards are a good way to help build or rebuild your credit rating.

Whether you have not yet built your credit rating up or if you have had your share of obstacles which caused your credit rating to go down slow or take a complete dive, you can still obtain a credit card. When you think of secured cards, you may ask yourself, "Why bother?"

It may be your only alternative at this moment in your life and can be a step in the right direction.

A fully secured credit card can be a better alternative than a partially secured card because of the amount of finance charges you will have to pay on what you charge can be drastically different. One card issuer recently offered me a partially secured credit card in which I had to make a $95 security deposit in order to access the $300 credit limit. They also charged a $95 membership/application fee and a $29 fee for my second user card, which was charged to the bill decreasing the available credit even more. When I received the partially secured credit card with an outrageous yearly membership fee and second user card fee of $29, I find that their interest rate is 49.9% for the first year and will drop (provided you don't miss a payment or go over your credit limit) to 39.9%.

The following list of fully secured credit cards can be obtained and you can get a much lower interest rate on these cards. Feel free to apply and secure your new card or cards with your initial security deposit and pay your bill on time and always pay more than the minimum. Some card issuers will eventually offer you a non-secured credit card once you have proven yourself credit-worthy which is a perk in itself:

Applied Bank® Secured Visa® Gold Credit Card
Guaranteed Approval Regardless of Your Past Credit History
9.99% Low Fixed APR - Your Rate Won't Change Even if You Are Late
Choose Your Credit Limit - From $200 to $5,000
Highest Ratings for Financial Strength and Security in the Country

Platinum Zero® Secured Visa® Credit Card from Applied Bank®
ZERO - 0% FIXED APR on purchases - No Intro Rates!
ZERO - 0% Rate Won't Change - Even If You're Late!
ZERO Application Fees
ZERO Worries - FREE Personal ID Theft Protection

For other Secured Credit Cards and Prepaid Debit Cards to Help You Budget You Finances better, visit:  www.CherokeeFinancialInc.com

Prepaid Debit Cards

Prepaid Debit Cards

Last Updated: December 22, 2011

Check Out Our Recommended Debit Cards

If you're frustrated because it seems as though a credit card is necessary to get by in today's world, and you've been unsuccessful getting one due to a poor credit history, you might consider a prepaid credit card. You'll have most of the advantages of a credit card, and you won't haveto worry about interest charges. One significant benefit of the prepaid credit card is that you can charge to your heart's
(I mean your deposit limit's) content, and you won't be in debt; the money is yours and once it's gone, you can't spend any more until you add more funds.

What is a Prepaid Debit Card?
A prepaid credit or debit card account is opened by depositing money into an account you establish with the card issuer, much in the same way you would make a deposit to open a checking or savings account. Once you fund the account with a designated amount, you are issued a prepaid credit
or debit card that can be used anywhere one would use a regular credit card. A prepaid credit card is not really a credit card, as no credit isoffered by the card issuer; the card-holder simply spends money which has been "stored" via a prior deposit by the card-holder or someone else, such as a parent. It's very similar to using a debit card linked to a savings or checking account; there are no monthly bills associated with the card, or interest charges; but there are still fees involved, so consumers should always do their research and understand the cost of their"credit".

Why Are These Called Credit Cards?
The reason why the word "credit" is associated with these prepaid cards is because most cards carry a credit-card brand (such as Visa orMasterCard) and can be used in similar ways. It's really no more than a stored value card that can be used in multiple locations due to the Visa(or other credit card) insignia. As more consumers require a suitable solution torebuilding credit, recent changes have allowed some credit cardcompanies to offer pre-paid credit cards to help rebuild credit. However, they are harder to find, and many have higher fees associated with them; so make sure you do your research. Many pre-paid products falsely claim they will improve your credit rating.

Benefits of a Prepaid Credit Card
1. There is no such thing as overdrafting your account; you cannot exceed your limit.
2. Prepaid credit cards can be a big advantage to low-income consumers who might otherwise be stuck dealing in cash, unable to make such basic transactions as paying for gas at the pump, paying bills online, or making car rental or hotel reservations.
3. Contingent on the card you select, your money may be protected if your card is ever lost or stolen.
4. Prepaid credit cards are a convenient way to pay for goods when traveling, even outside the U.S.
5. Prepaid credit or debit cards are often marketed to teenagers for shopping online without having their parents complete the transaction, or as a convenience for parents wishing to provide funds to children away from home.
6. Obtaining a prepaid credit card is easy, fast, and requires no credit check.
7. Some prepaid credit cards today report card history to major credit bureaus, so cardholders may be able to build or rebuild their credit using a prepaid credit card without the risk of damaging it along the way.
In summary, prepaid credit cards are a good solution for anyone who does not want to be tied down to a banking institution, anyone wanting a more secure way to carry their money than simply cash, or anyone having troubles being approved for a credit card. In today's society that is more and more cashless, somebody who doesn't have access to cashless transaction vehicles is at a major disadvantage.

Disadvantages to Prepaid Credit Cards
There are a number downsides to the prepaid card.
1. Most cards require a start-up fee, and while for many companies this fee is minimal, some of them are substantial. In addition, you'll most likely have to pay additional fees each time you deposit more cash into your prepaid credit card account; perhaps not as much as the initial fee, but a fee, no less.
2. Some cards will allow you to add more funds for free, but may charge a monthly "maintenance" fee instead.
3. Another downside is that many businesses that accept automatic payments from bank or credit card accounts may not accept them from prepaid cards. For most consumers this is a minimal annoyance, but for some it can be a significant setback.

As with any credit product, when selecting a prepaid card you should always do your research and make an informed decision on the best card to meet your individual needs. As stated previously, there may be a number of different fees associated with using a prepaid credit card, some of which might be high enough to offset any benefits. A prepaid credit card will generally carry more fees than a secured or unsecured credit card (presuming you pay them off monthly) therefore a prepaid card may only be a good option for those who cannot obtain any other form of credit, but require the convenience of a credit card. 

Now let's define some of the fees you might encounter in researching the available prepaid credit cards:
-Sign-up or Start-up Fee: Self-explanatory. May range from "free" to $50.
-Transaction, POS, or Usage fee: A fee assessed each time you use the card at a store, online, by phone, etc. Typically it is "no charge", but there might be a small fee (under $1.00).
-ATM Withdrawal fee: Can range from "free" to $5.00 or more. May be higher for International withdrawals.
-Monthly Maintenance Fee: A fee charged to your account each month. Sometimes there is no fee for the first few months, and then one kicks in after 6 months; can range from "free" to $10 or less.
-Reloading or Recharging Fee: A fee charged to you for adding more money to the account where your money is being held. Depending on the method used to add or transfer the money (at a retail location, using another credit card, cash, etc) the fee may differ. Typically "free" to less than $5.
-Balance Inquiry Fee: A fee to provide you information about your available balance. Can vary contingent on the method you use to request the information: online, telephone, ATM. May range from "free" to $3.00 or less.
-Monthly Statement Fee: A fee for obtaining monthly transaction history. May be up to $10 if sent by mail, however is typically free of charge if you go to the card issuer's website.
-Cancellation/Refund Fees: A potential fee for cancelling your card altogether or requesting a partial refund of monies loaded onto the card.
-Insufficient Funds/Overdraft Fees: A fee charged if you attempt to make a transaction and it is refused to to inadequate funds in your account;or, it goes through anyway but you exceed your limit. Usually under $3.00.
-Foreign Currency Conversion Fee: A fee, usually a percentage of the total amount spent, charged to convert from another currency during international transactions/travel.
In Summary: Check out the various types of pre-paid debit and credit cards on the market. Read the terms and conditions carefully, and define your objectives for needing this product.
Depending on your individual needs, you may find that a traditional credit card, a secured credit card
or a debit card will work better for you and save you money in the long run.

Here are a few Prepaid Debit Cards We Highly Recommend:

Secured Credit Cards Are a Great Way to Rebuild Credit

See our complete list of recommended Secured Credit Cards available!

For whatever reason, the economy, youthful negligence, divorce, health problems or general ignorance, you may now find yourself with a bad credit score and no means of getting small business loans, home loan, or favorable car loan terms. What you need is a way to increase your credit score in a hurry. Credit cards are a great way to establish credit. But people who have never had credit or need to repair a poor credit history may not qualify for a regular credit card. For them, a secured credit card may be the only way to establish, or re-establish, credit.

There are a lot of "bad" secured credit cards, so you want to make sure you do your homework first before getting one of these cards. Getting the right one and using it the right way, will go miles in the journey of rebuilding your credit and increasing your credit score.

What is a Secured Credit Card?
A secured credit card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account; you can charge up to $500. You may be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and add to your credit line without requesting additional deposits.

A secured credit card should have the following:
    No application fee and a low annual fee.
    The ability to convert to a regular, unsecured credit card after 12-18 months of on-time payments.
    Be reporting to ALL THREE credit bureaus.

Rebuilding Your Credit With a Secured Credit Card
Your best bet is to make arrangements with all of your current creditors to pay off your current debt and then make your payments on time. But this alone will not build a good credit score, it'll simply undo some damage to your credit score. You need to have a credit card you can use at least once per month and pay off in full each month to make your credit score go up quickly.

Even in the present economy, a person with a bad credit score can get a credit card. And, you don't even have to stoop down to cards with annual fees. A secured credit card issued by your bank allows you to rebuild your credit score quickly, if you use it responsibly. You only need to make a small purchase each month and then pay the card in full each month. After several months of doing so, and if you are faithful with your other debt payments, your credit score will quickly rise.

After about six to nine months of responsibly using your secured credit card, you will find your credit score rising sharply. At this point you should also know how to use your secured credit card responsibly. This is an important part of rebuilding credit scores. You need to continue using your secured credit card responsibly or your credit score will soon be damaged again.

Rebuilding a Good Credit Rating
First, get a couple of secured cards. Next, spend small amounts wisely, pay more than the minimum payment (or pay it all) every month and pay it right when you get the bill, don't wait for the due date and don't be late.  For people with poor credit or no credit, a secured credit card is the fastest, most effective way to reestablish themselves as good credit risks in the eyes of lenders. Secured cards are easy to get and the card issuer reports your payment history to major credit bureaus every month.

Using Credit Cards Responsibly
Using credit wisely is important since your credit reputation influences the rates that will be paid on a loan for a house or car, or for a credit card. The better your credit reputation, the lower the interest you will have to pay. Although secured cards tend to have higher interest rates and annual fees, they provide a valuable steppingstone to unsecured credit.  If you cannot use your secured credit card responsibly, it is time to consider that loans and credit cards are not for you. Some personalities
simply don't work with credit. There is no shame in being someone who must live on a cash basis, but there is shame in taking on lines of credit when you are someone who must live on a cash basis.

Establish a Sound Payment History
Establishing a payment history will help you qualify down the road for the major credit cards. Using this secured card appropriately and within the set parameters will help rebuild your credit. Only make small purchases and pay the bill in full when it arrives and well before the due date. Doing this regularly over time helps build your credit history as a prompt payer.  Don't fall into the trap of credit cards-overspending and/or making minimum payments. Once you have built a solid credit history over 12 months or more, you can apply for an unsecured card. Or, you can talk to the card issuer about converting from your present card to a regular card.

Secured Credit Cards We Highly Recommend:

Applied Bank® Secured Visa® Gold Credit Card
Guaranteed Approval Regardless of Your Past Credit History
9.99% Low Fixed APR - Your Rate Won't Change Even if You Are Late.  Choose Your Credit Limit - From $200 to $5,000 
Highest Ratings for Financial Strength and Security in the Country


Click Here To APPLY

Platinum Zero® Secured Visa® Card from Applied Bank®
ZERO - 0% FIXED APR on purchases - No Intro Rates!
ZERO - 0% Rate Won't Change - Even If You're Late!
ZERO Application Fees
ZERO Worries - FREE Personal ID Theft Protection
Click Here To APPLY


As with all hurdles in life, you must take the initiative to accept change, remain diligent & focused looking into the future working towards your goal of a better financial health.  These two recommendations are just the start you need on your road to credit recovery.

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A Fabulous Secured Credit Card To Get To Boost Your Credit Rating

Secured Visa Card with 0% FIXED APR on Purchases