What are Secured Credit Cards?

Why would you require a credit card? Most people opt for a credit card to help them fight any kind of emergency situation that needs financial assistance. A credit card can be used to pay for something as critical as a hospital bill and something like a grocery bill, a monthly loan amount or for buying an airline ticket. So what is the best credit card that will not have high interest rates that your children will be forced to pay after you are gone. One of the safest credit cards for that matter is the secured credit card or the prepaid credit card. You can visit a credit card company website to find the relevant credit card information to help you make a sound decision.

To find the right credit card, you can visit any of the online comparison websites. All credit card comparison websites list the different features of a specific secured credit card. You can even compare credit card rates and then choose the one that offers the minimum APR rate.

In a secured credit card, you will need to submit a cash collateral deposit, which is treated as the credit for your account. Let’s look at an example. If you are able to deposit £500 on to your card, then you will be able to make purchases of up to £500. If you pay on time always then lenders may even increase your credit line. This is one of the best ways of re-building credit history especially after you have gone through a lean financial phase, which could be anything from a divorce to loss of income.

The amount of deposit that you can make will differ from one card to another as you will find when you visit online to compare credit card rates. When you are looking through a comparison website, you can always choose the one that suits you. Some of the important features to look out for before purchasing a secured credit card are APR rate, privileges, balance transfer fee, annual fee etc.

The secured cards have an application fee of around £10 and the annual fee is anywhere between £4 and £5. Some secured cards also have an ATM withdrawal fee of £1. The secured credit card will be good for you if you are thinking about long-term benefits. The secured credit card is also ideal for young executives, entrepreneurs etc.

The application process for the secured credit card is easier as compared to the unsecured credit card and there will be no credit checks, employment verification and other verification procedures. Some companies offer secured credit cards without any kind of privileges or point schemes. So you need to search for the one that offers different types of points earned on purchases and discounts available on services and products. Don’t buy a secured credit card in a hurry because you may end up losing more. You can use credit card comparison sites, ask your friends and colleagues what kind of secured credit card they are using and then pick up the card that best suits your needs.