Decent options here but there are a lot better ways to boost credit rating than secured credit cards.
The basic thing that helps is simply revolving payments to establish payment history. Car payments, department store payments, secured bank loans, etc all do the same thing. At least with these you are getting something…
Go SecuredAugust 14, 2009 at 11:30 am
The FTC warns those looking for secured credit cards to watch out for scams. In particular, avoid offers that involve calls to 900 numbers and promises to fix your credit, which can be exorbitantly expensive. You can fix your credit on your own by establishing good credit management skills and by managing your debt responsibly.
jasonAugust 15, 2009 at 11:21 am
Capital One will be coming out soon with secured credit cards.
DouglasAugust 25, 2009 at 7:29 pm
A secured credit card is a good way to go. But, you have to watch the fees. Also, some unscrupulous issuers charge a “fee” each month that you don’t use the card. So, if you load it and put it in your wallet, these fees could be eating away at the deposit.
Read the fine print.
Douglas @ 0creditcardsguide.com
AnnAugust 26, 2009 at 10:49 am
Opening an account doesn’t just grant you better control over your expenses, but builds your credibility in the eyes of the credit companies. They view such as a sign of responsibility, which makes you more trustworthy, which can lower the rates and improve the terms you agree to.
MoniqueAugust 26, 2009 at 1:03 pm
Yeah, I had never heard of the inactivity fee, but thanks for letting me know!
Ryan WardMay 9, 2011 at 2:30 pm
The FICO scoring system only gives you points based on your OPEN and ACTIVE accounts. If you don’t have any open and active accounts, you will have a ZERO credit score. If you have no open and active accounts, you may need to get a secured credit card because you might not qualify for anything else.
Never close your accounts. Closed accounts are worth nothing to your scores.
New accounts don’t help much either. It’s better to piggy back off of other peoples credit cards as an authorized user. This will immediately increase your credit score. Learn more about how FICO scores really work here.
@Jason,
Yes, Capital One now has such cards available. We update our list on this page to reflect the latest products. Thanks!
Starter CardsDecember 2, 2011 at 1:09 pm
Secured cards are good starter cards if you want to improve your credit. There was a time when it was so easy to apply and qualify for loans, that nobody worried about their credit. Some years back, I didn’t bother to read the fine print on cards, thinking they were all pretty much alike, but not the case nowadays, so I pay more attention.
ChuckieDecember 2, 2011 at 3:14 pm
I’m applying for a new card but I’m not sure if I should go with a secured kind. I may still be eligible for a Discover.
You can bring up your situation to the card company. You can get a lot of info from them, especially if you have specific questions. But I’d like to clarify a few things — what most of us know as credit cards are actually UNsecured credit cards. This means that a bank or credit card issuer is loaning you the money with the expectation that you will pay it back. This is a true line of credit and the reason that so many people get in to trouble with credit cards.
But a secured credit card behaves differently. Here’s a refresher on how it works: let’s say that a bank contacts you and offers you a credit card where there is no credit check and you are guaranteed to be approved. The only thing you have to do is open an account with them and keep a balance in the account at all times.
Y.B.May 2, 2012 at 2:28 pm
Orchard Bank is a popular secured card which used to be issued by HSBC Bank. Now it’s being issued by Capital One since they acquired HSBC.
{ 13 comments… read them below or add one }
I never heard of this before but it is interesting to hear the differences between cards. May be a nice option for some.
Decent options here but there are a lot better ways to boost credit rating than secured credit cards.
The basic thing that helps is simply revolving payments to establish payment history. Car payments, department store payments, secured bank loans, etc all do the same thing. At least with these you are getting something…
The FTC warns those looking for secured credit cards to watch out for scams. In particular, avoid offers that involve calls to 900 numbers and promises to fix your credit, which can be exorbitantly expensive. You can fix your credit on your own by establishing good credit management skills and by managing your debt responsibly.
Capital One will be coming out soon with secured credit cards.
A secured credit card is a good way to go. But, you have to watch the fees. Also, some unscrupulous issuers charge a “fee” each month that you don’t use the card. So, if you load it and put it in your wallet, these fees could be eating away at the deposit.
Read the fine print.
Douglas @ 0creditcardsguide.com
Opening an account doesn’t just grant you better control over your expenses, but builds your credibility in the eyes of the credit companies. They view such as a sign of responsibility, which makes you more trustworthy, which can lower the rates and improve the terms you agree to.
Yeah, I had never heard of the inactivity fee, but thanks for letting me know!
The FICO scoring system only gives you points based on your OPEN and ACTIVE accounts. If you don’t have any open and active accounts, you will have a ZERO credit score. If you have no open and active accounts, you may need to get a secured credit card because you might not qualify for anything else.
Never close your accounts. Closed accounts are worth nothing to your scores.
New accounts don’t help much either. It’s better to piggy back off of other peoples credit cards as an authorized user. This will immediately increase your credit score. Learn more about how FICO scores really work here.
@Jason,
Yes, Capital One now has such cards available. We update our list on this page to reflect the latest products. Thanks!
Secured cards are good starter cards if you want to improve your credit. There was a time when it was so easy to apply and qualify for loans, that nobody worried about their credit. Some years back, I didn’t bother to read the fine print on cards, thinking they were all pretty much alike, but not the case nowadays, so I pay more attention.
I’m applying for a new card but I’m not sure if I should go with a secured kind. I may still be eligible for a Discover.
You can bring up your situation to the card company. You can get a lot of info from them, especially if you have specific questions. But I’d like to clarify a few things — what most of us know as credit cards are actually UNsecured credit cards. This means that a bank or credit card issuer is loaning you the money with the expectation that you will pay it back. This is a true line of credit and the reason that so many people get in to trouble with credit cards.
But a secured credit card behaves differently. Here’s a refresher on how it works: let’s say that a bank contacts you and offers you a credit card where there is no credit check and you are guaranteed to be approved. The only thing you have to do is open an account with them and keep a balance in the account at all times.
Orchard Bank is a popular secured card which used to be issued by HSBC Bank. Now it’s being issued by Capital One since they acquired HSBC.