Credit Cards for Bad Credit

Secured Visa Credit Cards

What is a Secured Credit Card?

Secured credit cards that come in Visa or Mastercard can be an effective way to build or re-establish your credit history. When you are applying for a bank secured credit card make sure you are getting the lowest APR possible for your credit rating by comparing different offers. Also, note that most secured Visa or Master Cards have upfront costs, monthly charges, and lots of small fees that you have to look closely at. We normally recommend the cards from our secured credit card search because most of those cards report to the credit agencies.

An issue you have to consider when applying for a Secured Visa or Master Card is whether it reports to the credit bureaus and which ones it reports to. Some cards report to one and some report to all three. This helps you re-establish your credit or improve your credit score over time when the bank secured credit cards report to the credit bureaus.

First you must understand the difference in secured cards; one is secured and the other is unsecured. Secured and unsecured cards both can be used to pay for goods and services. However, a true secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not. Also keep in mind that people get secure cards mixed up with prepaid cards where you prepay a balance and it does or does no have to be tied to a bank account. The prepaid card works more like a gift card than a secured card.

A required savings deposit for a secured card may range from the $100’s to $1,000’s. Your credit line is then a percentage of your deposit, typically 50 to 100 percent. Usually, a bank will pay interest on your deposit. Be ready to pay many fees associated with this card including application and processing fees which can sometime total hundreds of dollars. Before you apply, be sure to ask what the total fees are and whether they will be refunded if you're denied a card. A secured card requires an annual fee and has a higher interest rate than the unsecured card.