What are Secured Credit Cards?
Secured Credit Cards are perhaps the best type of cards for those with no credit or poor credit
If you have bad credit or need to establish a credit history, secured credit cards are probably the best credit cards to get because you are very likely to get approval and most report your payments to the three major credit bureaus.
Difference between secured and unsecured credit card
For a secured credit card, you have to deposit a certain amount of money (usually between $250-$15,000) with the bank issuing the secured credit card. The bank will normally extend a credit of anywhere between 50% to 100% of the deposit amount. Most banks will pay an interest on the deposit. This deposit acts as a collateral for your
secured credit card bills.
Annual fees tend to be higher for secured credit cards. There is also normally a one-time processing fee. Hence, you should be aware of the total cost involved (which includes the bank deposit). The interest rate (APR) is also much higher for a secured credit card.
Many banks will offer you unsecured credit cards if you have made timely payments for a certain period and increase your credit limits.
When choosing a secured credit card, keep the following things in mind
1. watch out for all cost. Make sure any upfront cost is refunded if you are not approved.
2. make sure the secured credit cards report to the 3 main credit bureaus.
Lastly, remember that only time and careful spending will repair your credit history.
Recommended Secured Credit Cards
We recommend the Orchard Bank Secured Mastercard® because of the following reasons. Firstly, it is issued by HSBC Bank, which is one of the world's largest and most reputable bank. The annual fee of $35.00 is very reasonable and it has no costly application fees. Once you show a regular habit of paying your bills on time, you should get offers from Orchard Bank's unsecured credit card.
If your credit is better than expected, you may even get approved for their unsecured credit card. Read our review of the Orchard Bank Secured Mastercard.
If you have bad credit and yet want to have a travel reward card, then the New Millennium Bank Secured Platinum Visa® or Mastercard® may suit you. It is a secured credit card with rewards. You will be automatically enrolled in The World's Best Travel Club.com where you will receive discounts and low, low prices on all your travel needs!
Read our review of the New Millennium Bank Visa® or Mastercard®.
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