Credit Card Details

Secured credit cards are issued for the purpose of rebuilding a bad credit rating or establishing credit altogether (usually the latter). The idea behind a secured credit card is that the holder deposits a specific amount of money into an account held with the issuer (usually $300-$500). The credit limit is set at the amount deposited or a small percentage above it. After about a year of on-time payments the card issuer will either upgrade the card to an unsecured credit card or will offer an unsecured credit card to acknowledge the holder's credit worthiness. Secured credit cards should only be used as a stepping stone to improve a credit rating because they carry higher interest rates and annual fees as a cost for extending credit to someone with a bad credit history.