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Secured Credit Cards to Rebuild Credit History

The advantage of using secured credit cards to rebuild credit over the unsecured card alternative is that these cards come with much more favorable terms than the alternative. Unsecured offers usually come with very unfavorable terms for the consumer. A number of companies extract userous fees and charges from consumers for these and the interest rates are also generally inordinately high.

We have commented on the above in our article on Credit Cards for Poor Credit. Unsecured subprime cards are generally a bad idea while secured cards are the conservative and recommended option for gradually rebuilding your credit history and establishing a track record of responsible behavior that is reported to credit bureaus regularly.

The relative inconvenience of this option is that the available amounts you can charge on the cards is limited to a percentage of the amount deposited into the card account. Usually, this is 100% of the deposit amount -which acts as collateral with the issuing company- but occassionally, it can be slightly higher. It is necessary to be clear in these instances that one is using secured credit cards to rebuild credit history, not to rack up unsecured debt with significant charges to plastic.

It must be pointed out that another highly promoted niche in the subprime market, prepaid cards, are of no use at all for credit rebuilding. Use of these are not reported to credit bureaus and they -as well- usually come with high fees and charges, relative to the amounts paid into the accounts. We have commented more on this in our article secured vs prepaid cards.

Below, we feature an offer from a reputable major issuer. Compare interest rates and annual fees to find the best offer for your needs.


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