Every time you apply for a credit card or a loan, the inquiries from the lenders will be recorded on your credit report, and having too many inquiries would make you look like you are a risky customer.
True or not, a secured credit card may be the right type of credit card for you because it is secured by a deposit account owned by the cardholder. This deposit consists of 100% to 200% of the total amount of credit desired, that is held in a special savings account.
However, cardholders of secured credit cards still may expect to make regular payments as they would with any other regular credit card, with the only difference being the card issuer has the option of recovering the full cost of the purchases paid to the merchants out of the deposit if the cardholders does not pay their credit balance in a timely manner.
Most issuers consider that if the cardholder is unable to make the needed payment, the account should still be paid, and this is done before the security is released instead of taking money from the security. This is a risk for the cardholders because their card is not cancelled and the balance does not set off the deposit.
It is sad how easy it is to find that such advantage at first glance is nothing more than just a financial move to let interest to continue, accumulating on the unpaid balance for considerable periods of time which total charges often exceed the original deposit and leading the cardholders not only to lose their deposit but after that with additional debt that may become a nightmare to pay.
This is actually a condition that is described in most secured credit card agreements, but many people do not read it or if they do, they don't understand it very well.
Understanding all the terms of the agreement and not fearing to ask when in doubt is important because secured credit cards are the most viable option to allow individuals with poor credit, bad credit history or no credit history.
If you want to rebuild or improve your credit history report, then your best option is with secured credit cards, but be aware that they have higher fees than regular cards.
True or not, a secured credit card may be the right type of credit card for you because it is secured by a deposit account owned by the cardholder. This deposit consists of 100% to 200% of the total amount of credit desired, that is held in a special savings account.
However, cardholders of secured credit cards still may expect to make regular payments as they would with any other regular credit card, with the only difference being the card issuer has the option of recovering the full cost of the purchases paid to the merchants out of the deposit if the cardholders does not pay their credit balance in a timely manner.
Most issuers consider that if the cardholder is unable to make the needed payment, the account should still be paid, and this is done before the security is released instead of taking money from the security. This is a risk for the cardholders because their card is not cancelled and the balance does not set off the deposit.
It is sad how easy it is to find that such advantage at first glance is nothing more than just a financial move to let interest to continue, accumulating on the unpaid balance for considerable periods of time which total charges often exceed the original deposit and leading the cardholders not only to lose their deposit but after that with additional debt that may become a nightmare to pay.
This is actually a condition that is described in most secured credit card agreements, but many people do not read it or if they do, they don't understand it very well.
Understanding all the terms of the agreement and not fearing to ask when in doubt is important because secured credit cards are the most viable option to allow individuals with poor credit, bad credit history or no credit history.
If you want to rebuild or improve your credit history report, then your best option is with secured credit cards, but be aware that they have higher fees than regular cards.
No comments:
Post a Comment