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Secured Credit Cards: Perks and Pitfalls
2010-09-01
Looking for a Credit Card for Bad Credit? Think Secured.
Not all secured credit cards are created equal. The good ones can be a lifeline for those with bad credit: they’re easier to qualify for than regular credit cards, and unlike prepaid or debit cards, they’ll raise your credit score and help you reestablish a payment history. Some have no fees for the first year, while others actually earn rewards. If you’re looking to build or rebuild your credit score, a secured credit card can be the best way.
On the other hand, there are the more unsavory secured credit cards. These charge you sky-high interest rates and crazy application, monthly maintenance and other fees. If you can, steer clear of these cards. We’ve seen annual fees as high as $119! Beware of secured cards that tell you that they’re the only option. There are low-fee cards out there, so don’t settle for exorbitant fees. Check out our list of the top secured credit cards to save money and avoid sinking deeper into debt.