linkmanager

Hello

I want to know that What is a secured credit card? and how we get it

biggestbopper

Give us some details as to just what you want to do.

Include why you think you need a secured card? Generally a regular credit card is much better.

nightan

Secured credit card is similar to a debit card. You get it by going to the bank and requesting a secured credit card. They will have you put aside some money (this is equal to the credit limit, usually between $500 and $1000) and send you a card.

Like the other person said, your question is a little vague.

skofarrell

Um, not at all like a debit card, actually.

A secured credit card is a "real" credit card with a line of credit that is backed by a "locked" deposit that you make in the institution that is extending you the credit. For example, if you deposit $1,000, you'll get a Mastercard or Visa with $1,000 credit line. Limits on your deposit and credit line vary by bank.

Unlike a debit card, your card is a real credit card. You can use it for car rentals, etc. You charge purchases on the card, and at the end of each billing period, you can either pay the balance off, or make a payment. If you don't pay your bill, they'll take the money from your "locked" account to pay the bill (and will likely close the card). This scheme ensures there is no risk to the institution extending you the credit. You typically will earn a small amount of interest on your "locked" deposit.

Most banks offer secured cards, some, after a period of on-time payments (typically a year) will "graduate'" your secured card to a regular credit card, and you can get your deposit/"locked" funds back.

Its key to pick a bank that offers a card that reports to the 3 Credit Reporting Agencies (to help show that you have become a good risk) and does not charge a lot of fees. See this link for more: http://www.bankrate.com/finance/cred...it-card-1.aspx

Also Google: "BofA 99/500", or "secured credit card"

nightan

thanks skofarrell, I stand corrected, and educated.

biggestbopper

While skofarrel makes some informative points, IMHO, a secured credit card is not a "real" credit card because the bank is not, in my view, really extending credit. In fact, they require the security because you don't have enough credit rep to support their giving you an unsecured card.

Real credit card good, secured card-not so good, debit card-very bad.

By the way, has OP given up on us?

skofarrell

I have to disagree with you bopper. For those with crappy credit, or if you are just starting out, its real in every sense. It is *not* a debit card when it comes to things like renting cars.

Provided you pick the right bank, it will show up as unsecured tradeline on your credit report, helping establish or reestablish credit. Again, pick the right bank/card (not first premier, or one of the other ripoff subprime providers), get "graduated" after a year, and you're back in business.

Secured cards (especially ones like BofA's 99/500) are a critical part of credit repair.

biggestbopper

All true--and I used to make much the same points in the class on credit issues for adults I taught for many years.

Nonetheless, an unsecured card is highly superior and most anyone can (could) get one. Whoops ... forgot the Bush crisis.

I have seen many get eaten alive by crooked banks offering secured cards with lots and lots of hidden fees. Banks, e.g. the infamous BankOne, often find it easier to cheat the poor or ignorant who don't have a clue as to how to fight back and often accept the idea it is all their fault. Anyhow, often, you don't know if you picked the right bank until it is too late.

So, I stick with my original line about unsecured card good, secured card not so much.

Really starting to wonder if we are going to hear back from OP.

HCA

Add one more point.

It is a for person with no or bad credit history to build up credit. It is still a credit card and you just need to make secure deposit for your credit line. And I beleive the secure deposit will return back to you after 9 months of use. Thus you just lose 9 months interest of the deposit amont.

Dr_wanderlust

Some do pay interest and not all will "unsecure" after 9 months or ever.

The main advantage of a secured card is that is reports to the three main credit bureaus (for U.S. consumers) and hence can add positive history to your credit report.

FullBird

Actually, virtually every bank these days report secured cards as "Secured" and that annotation shows up on your credit report. Gone are the days when only you and the card issuing bank new that you had a secured card.

Amongst those banks that report secured cards as secured are Bank of America, Wells Fargo, Citibank, NFCU and US Bank.

If you are trying to establish or rebuild credit, then a secured card may be the thing for you. If you already have credit from a prime lender or two, then I believe a secured card is just cheapening your portfolio and could possibly raise a red flag or two to a potential lender.

It is important to note, though, that the fact that your card is secured may not be noticed by lenders that pull your credit report unless they do a manual review. On an automated process, they might not realize that the card is labeled as secured, but on a manual review they definitely will.

helpusout

I am 1.5 years post bankruptcy and trying to regain credit. I understand that the best way to start is with a pre-paid creditcard, and then hopefully get credit extended once I prove that I pay. I have the Capitol One Prepaid Creditcard already, but I am wondering if anyone knows of one in which I can earn cash back/ mileage?

Thanks!

BankerManUSA

BofA's Fully Secured Card is the 1-2-3 Cash Rewards card. It has $39 annual fee and is one of the fastest ways to re-build credit.

helpusout

Thanks so much! Does that earn any points?

wcj

I have no idea how well this card works at rebuilding credit, but it does earn miles (in star alliance) and comes with a very small bonus. Fee waived first year.

http://www.lifemilesvisa.com/credit/visaSecuredCard.do