A secured card is a credit card that a cardholder "secures" with a deposit to ensure payment of the outstanding balance if the cardholder defaults on payment. Secured credit cards are targeted to customers with imperfect or limited credit histories who do not qualify for a traditional unsecured credit card. An unsecured credit card is not guaranteed by the pledge of any collateral. Most credit cards are unsecured debt and, therefore, have higher interest rates than other forms of lending such as mortgages that hold property as collateral.
Is Obtaining An Unsecured Credit Card Easy?
Criteria used to determine eligibility varies from card issuer to card issuer. Most banks and financial institutions will grant you credit if you meet the following requirements:
You must be a resident of the United States.
You must be at least 18 years of age.
You must make at least $95 a week.
You must have a valid Social Security number.
You must be employed for at least 6 months.
Are All Credit Cards The Same?
Credit terms vary among issuers. When shopping for a card, think about how you plan to use it. Do you expect to pay your bills in full each month or do you plan to pay off your purchases over time? Consider the annual fee, finance charges, interest computation method, whether or not there is a grace period for purchases and cash advances or balance transfers. It is also a good idea to look at the credit limit, how widely the card is accepted, additional services and features, and the Annual Percentage Rate (APR) and finance charges.
NOTE: Most credit card plans allow the issuer to "reprice" your current APR if the account falls into poor standing or becomes delinquent. Repricing is the act of increasing the APR.
What Is An Annual Fee?
Some issuers charge an annual membership fee or participation fees. These range from $25 to as much as $100.
"Gold" or "Platinum" cards sometimes reach as much as several hundred dollars. These fees may be charged whether or not you use the card.
Are There Transaction Fees And Other Charges?
A card may include other costs. Some issuers charge fees if you use the card to get a Cash Advances, make a late payment, or you exceed your Credit Limit. Often an issuer will charge a fee to transfer a balance from another creditor's account to their account. Fees are disclosed to you in your Terms and Conditions as well as in your Account Agreement. It is important that you read these documents in order to understand your responsibilities as an account holder.
What Is Credit Card Fraud?
One way to keep fraud under control is to closely monitor your credit report. A great way to do this is with a credit monitoring service. The cost of this service can range from $20-$50 per year. They give you unlimited free copies of your credit report so you can check it whenever you need to, online Monthly Monitoring Alerts to inform you of changes, black marks, inquiries and possible credit fraud signs on your report, information to help you deal with inaccuracies in your credit report, a newsletter with tips for managing your good credit, and articles to help you stay on top of your credit.
Is It Safe To Use Credit Cards Online?
It is much safer to use your credit cards on the Internet with a secure server than calling someone and giving your credit card numbers over the phone. However, people are still somewhat leery about using their credit cards on the Internet. When you use a secure server over the Internet, the data gets scrambled or encrypted and then put back together again once it reaches its intended destination. If you give your credit card numbers over the phone it is not in cryptic form. Furthermore, most credit card companies guarantee safe shopping on the Internet so you really have nothing to lose. |
