Are you thinking about getting a secured credit card? If yes, here are top ten questions and answers that you need to consider.
1. What is a secured credit card?
It is a type of credit card that requires the submission of cash deposit. The deposit made will often determine your credit limit although some Issuers offer a slightly higher or lower limit than the amount of cash deposited.
2. How do I apply for a secured credit card?
Most banks and credit card issuers have their own version of a secured credit card. You can personally apply from your local bank or send an application online. Credit unions may also offer secured credit cards for those with bad credit history. As a member of the union, you may be able to get a lower interest rate and lower fees.
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FAQs for People In Need of A Secured Credit Card
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Prepaid Credit Cards
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For those of you with poor credit history and thus find it hard to be eligible for standard credit cards, a preloaded card may be the answer. Prepaid cards look exactly like any regular plastic credit card except that it is easier to obtain a prepaid one. In this posting, we will talk about the advantages and drawbacks of using a prepaid charge card.
Prepaid Credit Card Advantages
Easy Access. Because no credit assessments done, anyone can obtain a reloadable prepaid card without any hassle.
Budget Friendly. Have you got an issue with overspending? With prepaid cards, it becomes easier to control one’s spending since you can only charge purchases to your card as long as you have an available balance . Once your charges have reached the maximum, you must make a new deposit or reload your prepaid card before you can use it for new purchases.
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Your Guide to Using Prepaid Credit Cards
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Prepaid Credit Cards
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If you need a cashless way to pay money without opening a bank account, all you have to do is get a reloadable prepaid debit card. The process is as easy as buying an item off a store. Unlike a regular credit card which charges an interest rate, a debit card is prepaid so it’s interest free.
However, before getting one, consumers are advised to spend time examining their choices. Take note that there are also fees associated with prepaid debit cards. If you’re not careful, you could get stuck with a card that has even more fees than you expected. What are prepaid debit card fees that you should know about?
Basic Fees Associated with Prepaid Cards
Activation Fee. An activation fee is required before you can use your debit card. However, activation fees can range from as low as $9 to as much as $100 so you should choose one with a reasonable cost.
Negative Balance Fees. Holders of debit cards are not allowed to overdraw but there are times when your bill can be a little over your available balance but your transaction will still be accepted. In this case, you will be charged with an additional cost known as the negative balance fee.
Continue Reading: Prepaid Debit Card Fees that You Should Know
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The use of plastic money or credit cards has increased dramatically over the years. Compared to cash or check, credit cards are considered to be safer and more convenient way of payment. However, not everyone can qualify for a regular credit card so easily.
Many issuers require good or excellent credit history before granting approval. If you have no credit or bad credit, does that mean you cannot get a credit card at all?
Prepaid Credit or Debit Cards for Everyone
A prepaid debit card is the perfect option for people who do not want to go through a complicated approval process. Whether you have no credit or bad credit history, you can get a prepaid debit card with no hassle. All you have to do is open a debit account, make a deposit and you’re approved.
Continue Reading: Prepaid Credit Cards – Plastic Money for All
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For people with low or bad credit scores, it can be difficult to qualify for a traditional credit card. This is the reason why credit card companies thought of offering secured credit cards. Below are some frequently asked questions about this type of credit card:
What is a Secured Credit Card? Unlike a traditional credit card, a person who wants to apply for a secured credit card is required to deposit a certain amount of cash that will serve as guarantee for the debts.
The security deposit will also determine the value of your credit limit. For instance, if you submitted $500 in your account, you may be given a $500 credit line. You may submit a higher amount than the minimum required deposit if you want to enjoy a higher credit limit.
After a few months, the bank may reward you for your good payment and raise your credit line without asking you for additional deposit.
Continue Reading: Secured Credit Cards: Frequently Asked Questions
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Secured credit cards are perfect for people who want to establish credit or rebuild damaged credit history. What benefits can you get by using a secured credit card? How can choose the right secured card for you? And how can you use it build or rebuild credit? Let’s answer these questions one at time.
What is a Secured Credit Card?
To open a secured credit card account, the applicant must make a deposit in his/her savings account. This serves as a guarantee that in case of default, the credit card issuer can use the cash deposited to pay the unpaid charges. Hence, the value of your security deposit will also determine the amount of credit limit you can enjoy.
Some issuers will match the value of your deposit while other issuers may give a slightly lower or higher credit limit than the value of the security deposit. However, unlike prepaid debit cards, a secured cardholder can be charged with interest rates each time the outstanding balance is not paid in full.
Continue Reading : Secured Credit Card Guide for Consumers
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A credit score is used to determine a person’s credit worthiness. Let us say you are applying for a new credit card or a new loan, your credit score will affect the fees and interest rates the company will offer you.
It also plays a role when you are applying for a job, planning to lease an apartment or office space, etc. A good to excellent credit history will definitely help you in obtaining a more pleasant and positive impression or response.
However, just because a person has bad credit does not mean he/she is not a responsible individual. Aside from overspending, there are other possible reasons why people suffer from bad credit. Unavoidable circumstances and/or wrong decisions can be the culprit. As a famous adage says, “Everybody deserves second chances.” This popular saying proves true for people suffering from bad credit. There are ways you can improve your credit rating.
Secured Credit Cards for People With Bad Credit
One way of improving or rebuilding your credit score is to get a secured credit card. Some people are opposed to this idea thinking that getting another card may only lead to bigger debts. Let us get to know more about secured credit cards.
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Secured Credit Cards: Repairing Bad Credit
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Shopping online is becoming very popular these days mainly because most people are too busy to even go to the mall or their favorite boutiques to purch
ase items they need and want. Online shopping is almost perfect except that some consumers are hesitant to give their personal and financial information because the risk of having these details stolen and used by others is very high.
Want to know how you can avoid being a victim of Identity Theft and online fraud? The answer is to use prepaid virtual credit cards.
Significance and Functions of a Prepaid Virtual Credit Card
The internet has made almost everything possible and easier. However, even scammers are benefiting from technology. These scammers gain profit by stealing other people’s personal and financial information.
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Shopping Safely With A Prepaid Virtual Credit Card
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For years, credit cards have been very useful for almost everyone- from business owners to students and even ordinary employees and retirees. It is used to purchase items or groceries, pay bills, etc. However, some credit cardholders consider credit cards as a source of their headaches.
Do you consider yourself as an over-spender or someone who can’t control spending as far as shopping is concerned? If yes, a credit card may not be the best choice because of the high interest rates and late penalty fees. You can opt to get a prepaid visa credit card instead.
What is a Prepaid Visa Credit Card and Its Advantages?
Prepaid visa credit card is a Visa card you can use to make purchases everywhere Visa debit cards are accepted just like a traditional Visa card. People can get a safer feeling when going out or even traveling to other countries because they don’t need to bring cash with them.
The Fair Credit Reporting Act orders all Credit Reporting Agencies to conduct immediate investigation on disputes filed by consumers. After 10 days upon receiving your dispute letter, the agency must send notice that an investigation is on the way.
You may have to wait up to 30 days for the investigation to be completed. After this period, you should receive a letter from the credit reporting agency, informing you of the result of the investigation. If your dispute has been found to be valid, you should be provided with an updated credit report, free of charge.
What happens if you dispute has been found to be invalid? In that case, you should still be notified by the credit reporting agency about the status of your complaint. Nevertheless, there are instances when credit bureaus are slow in responding to a dispute.
If you have been waiting past 10 days for without any notice or response from the agency to whom you submitted your credit dispute letter, what can you do? Should you just let go of the matter and live up with incorrect details in your report? Certainly not!
How to Send a Follow Up Letter
You should send a follow up letter informing the bureau that you intend to file a formal complaint to the FTC (Federal Trade Commission) if they refuse to take appropriate action right away.
Continue Reading: How to Follow Up a Credit Dispute Letter
