Secured credit card

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 ?
Key Topics Covered: Executive Summary Introduction Overview of Secured Credit Card Products
Despite heavy marketing by banks, only four per cent of first-time defaulters - an emerging customer segment Deloitte is tracking - are extremely interested in obtaining a secured credit card according to the survey.
In addition, it's a good idea to get a secured credit card if you're building credit.
Online payment broker PayPal announced Tuesday that it will issue a secured credit card to its 6 million account holders through Providian Financial, the nation's fifth-largest issuer of MasterCards and Visas.
net site explains in greater detail how the use of a secured credit card can help repair credit and carefully reminds consumers to review rates and explore their options carefully before accepting an offer.
QA Recently, I obtained a secured credit card through my bank in an effort to maintain my credit standing.
22, 2010 /PRNewswire/ -- Public Savings Bank's secured credit card operation has experienced unprecedented growth and is expecting even higher growth next year and will be propelled by new capital and new product offerings.
If not, get a secured credit card and use it as regularly as you can afford.
July 31 /PRNewswire/ -- Public Savings Bank is pleased to announce a new streamlined approval process for its Visa secured credit card.
April 2 /PRNewswire/ -- Public Savings Bank is pleased to announce a new Visa secured credit card that will assist consumers in building or re-establishing their credit profile.
These new services include ATM machines at each branch, a secured credit card and various investment options, among other things.
Net1Bank will complement the debit card by offering a secured credit card to help establish credit for those individuals with no credit or impaired credit.