Posts Tagged ‘secured credit cards’

A secured credit card works by the customer topping up their account with a cash sum, and then the credit limit of that account is the amount that the customer has paid in. This is almost the opposite of a normal credit card, where the customer pays with their credit card for transaction, and then pays off the balance on the card after they have used the credit on the card. With secured credit cards, the customer pays for the credit before they begin to make transactions.

By having a secured credit card, the balance on the card is already paid up front before you begin to make transactions. Rather than having to worry about whether you will be able to afford the repayment each month, you have already paid off the money on the card, so this will not be an issue. As you will effectively be making all of the payments before using the card, you will always meet your repayments for each month. This means that you will be able to build your credit rating up quickly. If you have had bad credit rating in the past, your credit score will be able to be improved upon substantially which will make you a trustworthier customer for other credit lenders. With an improved credit rating, you can get loans and mortgages much more easily than you could do if you have a bad credit rating.

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