Credit Cards: Bank Secured Credit Cards
Even though there are many types of credit cards out there for consumers, there are few for those with bad
credit. Those who are looking to repair their credit have a few options available, one of which is the bank
secured credit card. This credit card can help you to repair your credit, as it works in conjunction with
your savings or checking account.
Bank secured credit cards look and work just like traditional credit cards, although they use your bank account
as collateral. Anytime you aren’t able to pay your credit card bill at the due date, the bank will take the
money out of your account. This way, there is always money there for the bank, in the event that you are
unable to make your payment.
Bank secured credit cards are also ideal for those who have a bankruptcy or simply don’t qualify for a line of
credit due to bad credit or no credit history. These credit cards show your bank that you are able to pay
your monthly dues, and that you are taking the necessary steps in rebuilding or building your credit. Over
time, if you remain responsible and pay your bill on time, your bank may give you an unsecured line of credit -
known as a standard credit card with no collateral.
Due to the fact that bank secured credit cards only allow you to spend what have in your account, you don’t need
to worry about debt. When you can’t make a payment, the bank simply takes the money out of your
account. Although this is a great back up plan, you should always pay your bill and never let this
Just like other credit cards, bank secured credit cards do have disadvantages that can hit you like a ton of
bricks should you use the card irresponsibly. Anytime you don’t pay your bill on time, the bank can hit you
with high interest charges and late charges. These charges and fees can get higher and higher if you don’t
start paying your bill, which can eventually cause you to drain your account that you set aside. If you pay
your bill on time though, you won’t have to worry about being hit with these types of charges.
For those who have bad credit or need to start building credit, a bank secured credit card is a great place to
start. These cards can lead you to an unsecured credit card, providing you pay your bill on time.
Almost all banks offer these credit cards, all you have to do is ask. Once you have kept your credit card in
good standing for a period of time - you’ll have the satisfaction in knowing that you are taking the right steps in
rebuilding your credit.