Is a secured credit card a good idea or a bad idea for someone trying to establish good credit? Well, Kelly this is a subject that I have touched on a couple of times when giving seminars on credit. A secured credit card is a good idea but there are some criteria that must be met if you are considering getting a secured credit card.
1) Do they report to all three major credit bureaus? If they do not report to the credit bureaus you are wasting your time utilizing this card. This will help you establish credit history.
2) There are a lot of places you can get a secured card. Try to get a secured card through your bank or credit union. You can view www.bankrate.com regarding secured cards and what they offer.
3) Personally I do not think you should pay an application fee for a secured credit card. Yes there will be an annual fee and are different from card to card. Make sure you read all of the fine print on any application you choose to complete.
4) Understand going in that a secured card has a higher interest rate to start with. So you want to make realistic purchases on your card and pay it off at the end of the month. This is not a card you want to carry a balance on.
With that being said, happy choosing a secured card that works for you.
