5 Tips for Finding the Best Secured Credit Card

By: Beth Derkowitz

Secured credit cards can be ideal for those who have no credit or damaged credit. In general, the credit line for a secured credit card is guaranteed by collateral such as a boat, a car, or a deposit of money. Secured credit cards often also have low credit limits, although once you start building a history of responsible credit use and on time payments you can often request a credit limit increase. Here are five tips for finding the best secured credit card for you:

1. Consider your credit needs and habits. Before choosing which card to apply for, consider how you will use the card and how you will make your monthly payments. In order to build good credit, it is very important to pay on time, and it is generally a good idea to avoid spending more than you can be sure of paying off quickly.

2. Read the fine print. Make sure that you understand the terms of the agreement before you sign up. Think about the fees, the credit limit, the grace period for accumulating interest, what happens if you are late on payments, and all of the other details of the offer. Being informed before you sign can help prevent unpleasant surprises later on!

3. Make sure the credit card company reports to the major credit bureaus. If you are trying to build or rebuild your credit rating, this is essential. These bureaus produce the credit reports that companies use to evaluate you before extending loans or lines of credit, so it is important that they hear about your responsible credit use.

4. Compare several cards to find the best one. There are several companies offering secured credit cards, and each has their own combination of policies and features. Compare multiple cards to find the one that fits you best.

5. Check several sources of information. The Federal Reserve publishes a survey of credit card terms every six months, and there are a wide range of websites where you can compare offers online

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