Secured credit card

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Secured Credit Card

A credit card with a credit limit that is at least partially collateralized by funds in a special savings account. That is, a cardholder places a certain amount of money into an account with the credit card company, and this is used to protect the company from the cardholder's default. Depending on the cardholder's credit history, he/she may be required to place anywhere from 50% to 100% of the credit limit into the savings account. These funds still belong to the cardholder, and he/she may retrieve it if he/she pays off or cancels the secured card. Because these reduce the risk to the credit card company, it may charge a lower interest rate. Secured cards are particularly useful for persons with bad credit or little credit history.

Secured credit card.

A secured credit card is linked to a savings account you open with the bank or other financial institution offering the card.

You deposit a sum of money in the account, and you can borrow up to that amount using your card. If you don't repay what you borrowed, the creditor can access your account to cover your debt. The creditor may also change substantial fees for a secured card.

Secured credit cards look the same as other credit cards, so no merchant can identify a card as secured. But if you have trouble qualifying for credit, perhaps because you've just started working, you can use a secured card as a first step toward establishing a record of using credit responsibly.

References in periodicals archive ?
Regulatory and profitability challenges have caused some providers of secured credit cards to leave the market, although a few national financial institutions as well as several smaller ones are finding ways to make their products successful.
QA Recently, I obtained a secured credit card through my bank in an effort to maintain my credit standing.
SECURED AND HIGHER: Secured credit cards usually have annual fees and their interest rates tend to be higher as well, according to a survey by Consumer Action in San Francisco.
The major product types analyzed are Secured Credit Cards, Business Credit Cards, Balance Transfer Credit Cards, Co-branded Cards, Affinity Credit Cards, Cash Back Credit Cards, Reward Credit Cards, and Student Credit Cards.
net announces the launch of its new database comparing reputable companies providing secured credit cards.
You'll find information on the lowest rates offered by banks, cards that have no fee, and secured credit cards.
com (eDebitSoft), the world leader in online secured credit cards.
Both features are highly unique to secured credit cards.
Net1Bank plans to provide secured credit cards for FTC to market to these consumers for establishing or improving credit.
June 5 /PRNewswire/ -- First Consumers National Bank(R) (FCNB) extended its bilingual credit card banking services to the Internet today as it inaugurated its World Wide Web site devoted to consumer information about secured credit cards.
Berwyn will provide all of the back-office servicing for secured credit cards issued by EAB.
are consumers who now have credit cards for the first time in years, or even for the first time ever: holders of secured credit cards.