If you are in the process of rebuilding the credit through secured credit cards then definitely you are on the right track. But there are few things you need to do for rebuilding the credit score through secured cards.
Re-establish your spending and credit habits
If your credit score is poor or just end up with the bankruptcy situation then sign up for the secured credit card will be the perfect option to rebuild your credit history. Use of the secured card not only makes you to rebuild your credit history it also allows you to reestablish your spending habits. When you adhere to the timely payments you will start to learn the credit management tactics as well.
What Secured Credit Cards actually means
In order to obtain the secured credit card you will need to pay some amount as a deposit. Upon receiving the deposit card provider sets a limits on your monthly secured card usage. For example if you pay $500 on your secured card as a deposit you can use the card up to $500 per month. Monthly statement will provided. When you fail to make a settlement they will reduce the amount from your deposit.
On other hand if you make timely payments your credit history will be updated to the credit bureaus positively. So you can use these secured cards to rebuild credit. There are many no annual fee credit cards are available as the secured cards. Grab the one for you
How secured cards offered despite the bankruptcy
Since you have paid the deposit already in your account for a banker it is a less risky. These are too. When you fail to pay they will deduct the amount. So this is the factor that made them to provide you the secured card even though you have ended up with the bankruptcy.
Since the spending limit is predefined and secured with the deposit it is also one of the good ways to learn new spending habits. By having your deposit the banker also will help you to rebuild your credit history in all the way they can. When the time comes and you close your secured credit card account with some good condition the whole deposit amount will be given back to you.
Credit cards to build credit
Major credit card companies like Orchard Bank, Capital One, Secured Credit Card Bank of America, Wells Fargo used to provide the secured cards to help you with the credit rebuilding. Normally secured cards can be stated as no annual fee credit cards
Move forward to unsecured credit cards
Generally when obtaining the credit cards to build credit start with the limit of $200 – $300. When you make the proper payments every month you can upgrade the credit limit to some higher amounts by requesting the banker. If you have a clear credit history chances are there to move your secured credit card to the unsecured credit card. When they change your card to the standard credit card your banker will return your security deposit too. But this upgrade requires a long endurance. Remember Rome was not built over the night.
Since your aim is to obtain Credit cards to rebuild try to credit make a strict schedule to pay off your monthly bills. Try to keep your secured account in a very good condition.
Although you have security deposit always make on-time payments. Don’t create a situation when your banker to use your deposit amount to pay your outstanding debt.
Even though you have put down a security deposit, you should continue to make regular on-time payments.