Secured Credit Cards – Hard to Get But Still Useful

With recent turns in economics, credit card companies have changed their strategies in order to maintain profitability.  This means that products that were readily available before are now in short supply.  Card issuers will focus on those cards which bring them the most profit and secured cards do not fall into that category.  But, once this economic downturn has passed, you will see them return in greater numbers.

If you are looking for secured credit cards, there are still some being offered.  Here is what you can expect to find from major issuers.

Bank of America Secured Visa Credit Card.  This card has a $29 annual fee with a variable interest rate which is currently at 14.24 percent.  The minimum deposit is $300.

Citi Secured MasterCard.  Citi also charges a $29 annual fee and variable interest rate which is at 13.24 percent.  Card holders must deposit $200 into a CD account which earns interest.  Also, after 18 months, you can upgrade to an unsecured

Citi Platinum Select card.  If the account is closed before 18 months have passed, there is an early withdrawal fee.

Wells Fargo Secured Visa Card. This card has a higher APR – 17.99 percent – but the annual fee is only $18.  The minimum deposit is $300.  For an additional $19 annual fee, consumers can add a rewards benefit to the card.  Also, after 12 months, card holders can upgrade to an unsecured account.

Orchard Bank Secured MasterCard.  HSBC issues this card and charges a variable APR of 7.9 percent.  They will waive the annual fee of $35 for the first year.  The minimum deposit is set at $200 which earns interest as well.

U.S. Bank Secured Visa Credit Card.  The minimum deposit on this card is $300 and the annual fee is $35.  After 12 months card holders can upgrade to an unsecured card as well.  The variable interest rate is 18.99 percent.

Reviewing the benefits of a secured credit card.  If you have poor credit or it is limited, you can build it back up with a secured credit card.  In fact, those who use secured credit cards come to appreciate their features and the ability to use them knowing that they are covered with their deposit.

Fees still exist.  Secured Credit cards are still subject to fees and finance charges.  You must be vigilant in making sure that you do not go over the limit on the card.  Constant monitoring of use is mandatory, just as with any other credit card on the market.

Not all cards are created equal.  From this list above you can see that secured credit cards vary widely in their details.  Watch out for these issues as you search for one that fits your situation.

Reporting Cards.  Make sure that the card reports to all three credit bureaus.

High Fees.  Read about the fees being charged.  Some have very high fees.

Low Rates.  Search out cards with low APR percentages.

Grace Periods.  Some of these cards have no grace period in which to pay before finance charges accrue.
Move to Unsecured Cards.  Make sure that you can eventually (within 12 months or so) move to an unsecured credit card.  Look at the other card offerings by the company that you are interested in to see what their other card features are like compared to others.
Using the above, you should be able to find a good secured card that will serve your needs and get you back on the road to credit worthiness.  Make sure that you read all of the fine print and know what you are signing up for before you take the plunge.

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This entry was posted on Tuesday, April 14th, 2009 at 10:41 pm and is filed under Choosing a Credit Card, Credit Card Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.