Secured Credit Cards: Using Them To Raise Your Credit Score

By Janet Peterson on May 1, 2010, 8:53 am Posted in Finance News

If your credit score is up around the 790 area you probably get a lot of offers to start platinum, gold, et. credit cards. On the other hand though, if your score looks to be in the lower areas of the spectrum, you could expect a lot of refusals for credit, even on in store (private label) cards. It seems like a viscous circle, if you don’t have credit, you can’t get it. Increasingly, people are turning to secured credit cards recently.

How A Secured Credit Card Works

At present not every bank will offer these devices, but one bank, Public Savings Bank, of  Huntington Valley, Pa. has an offering of a card with an interest rate of 7.99% over prime rate (total 11.24% at the time of this writing) and an activation fee of $79. The problem is though, not every offering is this good. Some are as high as 19.99% and activation fees that will wear out the pocketbook. Also be careful of who you get the card through, I’m sure everyone remembers the failure of Washington Mutual. JPMorgan Chase, who bought the failed bank, ended the secured credit card program, and in some instances it can hurt your score.

5 Tips If You Are Shopping For A Secured Credit Card

1) If your credit score is in the 500-600 range, then apply for a regular card. You can probably get it

2) Insure that the company issuing the card reports to the three credit bureaus. Some companies don’t.

3) Make sure of the fees that will be charged, and the interest rate. If your credit limit is $250 and the company charges $210 in fees…

4) Do not accept a high interest rate. There are companies that will give you a decent interest rate and pay interest on your deposit.

 

5) Make sure interest isn’t charged from day 1. Most will offer a 25 day grace period before they start charging you.

Related posts:

1. Credit Card Originations Down: Americans Find Ways To Secure Cards
2. Credit Cards:The Pitfalls Of Store Issued Credit Cards
3. Can I Have Credit Cards After Bankruptcy?
4. Secured Credit Cards: New Credit Card Act Has Stricter Provisions
5. Credit Card Debt: Currency Conversion Fees Not In New Credit Card Act

One Response to “Secured Credit Cards: Using Them To Raise Your Credit Score”

1. DinaHB says:

   January 5, 2011 at 10:13 am

   My bank debit card is also a Mastercard. Can I use this to restore my credit rating? Does the bank report to the credit bureaus?