Credit cards are not considered by a lot of people as a necessity for they can still get by without having the plastic. But let’s face the fact; credit cards can be lifesavers at times. When emergency comes and there is an immediate need for cash, credit cards are there to the rescue. When we wanted to buy something and ran out of cash, your plastic can give you the purchasing power.

There are a lot of credit card companies so it is important that you choose the best. Credit card companies look on different aspects like income, age and most especially credit history of a person. But the thing is that there are some people who have bad or no credit history. Having a poor or no credit history would give thin to no chance of getting your credit card approved. But credit card companies have designed a way for people with no credit or poor credit history to own a card.

The secured credit card is especially designed for people having some issues with their credit history. Secured credit cards work differently as the other regular cards. With a regular credit card, there are no deposits needed but with secured cards, it is the main requirement. But what is the deposit for?

Credit card companies would like to make sure that they are able to collect money for your credit card debts so the money deposited in your card will be used when your account is at default. Most companies require a minimum of three hundred dollars. Like all the other credit cards, secured cards also have their credit limit. One should understand though that the credit limit is not equal to your deposit. At times it is just a percentage of the amount deposited. So if you would like a higher credit limit, make a higher deposit. There are also some companies or banks that offer interest on your deposit so it is a more preferred option.

Credit card companies initially look on the age, income and credit history but banks require a consumer to have a bank or checking account with them before they can issue a secured credit card to a person.

If your main reason for having a secured credit card is to establish or fix your credit history then make sure to make on-time payments and have it reported by the credit bureaus. Just a tip though: make sure that credit bureaus won’t declare them as a secured credit card to avoid any prejudice in the future.

Once you have built and established your credit card, be the wisest spender and the most diligent payer for you to gain lenders’ trust for an easier loan approval in the future.

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