Secured Credit Cards
No Credit, Bad Credit
There are many life situations that could adversely affect credit histories, and secured credit cards provide a way to establish good credit or rebuild credit. Be careful, though. These cards have higher interest rates, so pay off the balance every month or you will be spending a lot on interest. If building or repairing credit, paying off the full amount is a good habit to get into.
Kinds of Secured Credit Cards
Because the card holder is considered a risk, these cards have several expenses and requirements that unsecured cards don't have. The holder must open a savings account to guarantee that there are sufficient funds to cover any charges. In addition to the higher interest rates, secured credit cards have annual fees. However, with all the expenses, these cards provide a way for consumers to establish a good credit history.