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What is a secured credit card?

Secured credit cards are a great way to repair bad credit. If you’ve been hit with hard economic times, including: bankruptcy, collection accounts, or foreclosure- this may be an ideal credit solution for you. In contrast to traditional credit cards, secured debit cards act similar to a debit card. For example, you provide the lender with $200 cash deposit and in exchange, they’ll give you a credit card with a $200 limit. That way, if you default on the monthly payments, the lender can use the cash deposit to cover the loss. These cards offer a way to slowly rebuild your credit. However, be aware that these cards come with administration fees as well as high interest rates. So, it’s important to note that these cards shouldn’t be used forever. Rather, secured credit cards should be used as a temporary way to improve a bad credit score and access banking conveniences.