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Are secured credit cards suitable for building credit?
Let’s say you’re paying off a significant amount of credit card debt with the help of a debt settlement company and are looking for ways to improve your credit score. Is using secured credit cards good for building your credit score? Start paying off your credit card debt for free today 7-Step Credit Card Debt Reduction Here.
Learn how to build credit with secured credit cards
Why should you consider a secured credit card to build your credit score?
In this episode of Queer Money®We’ll explain how secured credit cards work and what you need to consider BEFORE you apply for one. We’ll discuss the three most important factors that affect your credit score and weigh up the importance of payment history, credit mix and credit utilization.
We’ll walk you through three important questions to ask yourself before getting a secure credit card and explore the habits you need to develop to make good decisions. Listen to understand how a repossession works (and how it affects the down payment on a secured credit card) and find out if a secured credit card can help YOU improve your credit score.
“The most important factor in building a credit score or credit file is your payment history.” – DavidClick to tweet
Topics covered on secured credit cards
This is how secured credit cards work
Keep the deposit as security in case it is not returned
Called a credit card on training wheels
What you need to know before applying for a secured credit card
Not every card is reported to the rating agencies
Some debt settlement companies prohibit new cards
The three main factors that affect a credit score
Payment history
Credit mix
Credit utilization
The idea of seizure and its connection to secured credit cards
The company you owe takes money out of your account
Secured credit card deposits generally cannot be seized
3 questions to ask yourself before applying for a secured credit card
Have I developed habits that allow me to pay off the balance each month?
Will I only use the secured card to build credit?
Could the deposit balance be better used to pay off existing debt?
Our advice to Ricky about getting a secure credit card
- Ask the debt settlement company if it’s OK
- Review our three questions to ask yourself
- Research maps to ensure reporting to authorities
- Save the required deposit (maximum $250 or less)
- Make it a habit to pay off the balance twice a month
Resources for building credit
