So you’re ready to get your life back on track by filling out your first secured credit card application? Not so fast. All secured credit cards are NOT the same and some have fine print that could end up costing you in the long run. If you’re not careful you could actually lower your credit score when you fill out a secured credit card application with the wrong company. We’re not saying this to try to scare you and if used properly with the right credit card agency, a secured credit card can be a wonderful tool and the fastest method to build or re-build your poor credit score. Here’s a quick hit list to be sure your secured credit card application is with a respected company that’s looking to help you and not looking to take advantage of you.
What to look for in a secured credit card application
There are a few initial key indicators that you can look for on your secured credit card application before you start typing your information in to the online form. We know you’re probably anxious to get started but take a little time to review the terms and conditions on your application.
Have you heard of the company on the secured credit card application?
If you’ve heard of the company on the application then most likely it’s going to be a credit card agency that does a fair amount of advertising. What does advertising have to do with signing up for a secured credit card company? Well, if you were a business owner investing big dollars in promoting the good name of your company, would you want to hurt your reputation by putting out bad products? Chances are if you’ve heard of the company who’s got their name stamped on your secured credit card application then you’re choosing a company that’s offering a quality secured credit card that they’ll stand behind.
How much is the yearly fee of the secured credit card?
We can’t blame the secured credit companies out there for requiring a yearly free. We know you’re a good person who either got a little behind or simply wasn’t told from a young age how important it is to build credit early on. The secured credit card companies don’t know you from Adam and they’re not familiar with how you diligent you are with paying your bills and how much money you have in the bank. So, they want a yearly fee as their “insurance” in case something went bad. This fee is normal around $35 and isn’t going to break your bank. Think about it, for $35 a year you’re building a solid credit card history that in today’s market can get you a home loan for as low as 4%. A bad credit score will bump your rate up to 6%-8% which will end up costing you over $30,000 more on your home loan at the end of 30 years. So is $35/yr a deal breaker? We don’t think so.
What is the minimum dollar amount you need in your account on your secured credit card?
In addition to the yearly fee, secured credit cards also require that you invest a certain dollar amount that they hold for you in case you can’t make a payment. Keep in mind this is still YOUR MONEY and you can think of it as a mini savings account. Some secured credit card companies even offer interest on that money that compounds over time. Many are as low as $49 to get started and you’re free to put down as much as you’d like which in turn will increase the maximum purchases you can put on your credit card. It’s very important while you’re reviewing your secured credit card application to keep in mind what you’re using your card for. If it’s going to be strictly for gas for your vehicle keep in mind how much you’re currently spending each month in gas and be sure that you put enough in your account to cover that amount and still keep yourself at only 30% of the max on the account. This may sound a bit confusing and we’ll get more into detail on this. The bottom line is to make sure you fund your credit card with enough money so that you keep your total amount under that 30% threshold. This is a little secret to turbo-charge your credit score using your secured credit card.
Get started today by filling out a secured credit card application!
Now that you know what to look for on your application you can do your research and find the perfect card to fit your lifestyle and begin your journey ever closer to a 700+ credit score. Still have questions? I’m sure you’ll find the answers here on SecureCreditCardRx.com.
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