What is a secure credit card?
Credit cards are credit instruments issued by financial institutions such as banks. Like all credit cards, a secure card is determined with specific conditions related to the interest rate used for balance, minimum monthly payments and a predetermined credit limit. The secure credit card account differs that the card is supported by the funds that the card holder puts on the savings account managed by the card publisher.
The process for securing a card of this type is quite simple. As with all types of credit cards, it is necessary to apply for a credit authorization by completing the application form. Together with the correct completion of the form and meeting the basic standards required by the issuer, the applicant also agrees to save the minimum amount of funds on the savings account controlled by the issuing entity. The Savings Account Balance determines the Credit Line permitted for the card, while the Jekdekoli credit limit between eighty and one hundred percentthe Balance of the Savings Account.
secured credit card generally carries an interest rate comparable to any type of unsecured credit card with a high risk. Payments are made on an outstanding card balance per month. In the event that a secure card holder cannot make minimum monthly payments in time, the issuer reserves the right to terminate credit permissions, use funds on the savings account to repay the balance, return any remaining balance and closure of the account.
Getting a secure credit card can be beneficial in several situations. The most common reason to get a credit card of this type is bad credit. For people who have undergone a period of financial instability, a secured credit card can be one of the first steps to recover a good rating. With a loan Balance, which is not limited to more than to the balance of the savings account that effectively serves JAKo collateral is the chances of achieving a huge debt minimal. At the same time, a secure credit card can be used to make several purchases every month, which are immediately repaid before the due date associated with the account. This action helps to set a positive credit link.
The second advantage for a secure credit card is that the card holder has the opportunity to build an egg for a savings nest while creating a positive credit link. The card holder gradually adds the balance of the savings account every month will also gain more interest on balance. At the same time, the credit limit is increased as the savings account balance increases. Within a short time, the card holder has created a source of interest income and started the process of repairing his credit.
Many secure credit card plans have some limits. Most plans do not allow a credit limit of more than $ 5,000 in the US, even if more funds are inserted in the savings account. However, there are several secure plans that allow a higher limit. In additionA number of secure plans have no type of time for late payment. The fees apply to the balance if the payment is not received and processed at the due date or before the due date.