Secured Credit Cards

      One way you can easily reestablish your credit is by obtaining a secured credit card.

• So what is a secured credit card?

 A credit card that requires that you deposit money into an account as a collateral. Whatever amount you deposit will be your initial credit line. You can add more money into your account to increase your credit limit. You will get rewarded for making timely payments by either getting an increased credit limit without having to deposit more money, or even qualify for an unsecured credit card.

• What fees should I expect pay?

You will typically see an annual fee associated with most secured credit cards. I encourage shopping around because fees will vary tremendously throughout the different bank institutions.

• Where can I get a secured credit card?

A lot of credit unions offer secured credit cards and some banks . I would recommend asking your credit union or bank first, because they offer lower interest rates and annual fees for their member vs non members. Best Secured Credit Cards

• How much will I have to deposit?

This amount will vary depending on who you obtain your card from, but most will start at about $300.

• Will the deposit I make earn any interest?

Yes, you will earn interest on your deposit. When you make a deposit, you will be giving different options of where you'd your money to go. Your options would include a savings account, certificate of deposit or  a money market account. Difference between savings account and certificate of deposit

• How does a secured credit card help improve my score?

As long as you continue to make your payments on time, your card issuer will report to all three major credit bureaus just as they would with an unsecured credit card. Make sure you ask your bank if they will report your card as a secured card on your report? If so you will want to go with a different bank that does not report it as a secured card, otherwise you probably will not benefit much from a having secured credit card.