What is a secured credit card?


The secure credit cards are just the same as the prepaid credit cards, or you can say that both this card follows the concept of using funds credited by the owner of the credit card rather than the issuer of the credit cards. In short, the secured credit card is kind of a credit card where the credit card user provides funds to utilize rather than the card issuer providing it. The limit of the usage of the credit card is the find provided by you, rather than being unlimited. You load the card with money and then you spend it. There is no interest rate or additional charges on usage of the card. That is why in most cases people who uses secured credit cards or applies for it, has a low rate of earning or unemployed people. No additional charges on the credit cards make them able to use the facilities of the cards. There is no certain limit of credit lines given for the secured credit cards. They can range from 50% to 100% of the deposit which is deposited by the user of the credit cards. The secured credit cards are very much user friendly and at the same time they are given very much easily. The reason for which they are very easy to obtain is the credit card provider remains in a zero risk while providing the card.

Why should you use a secured credit card?

Many people might think that if they are using the credit line that is deposited by them, then what the justification of using an extra card is. Yes, there is lot of benefits that would justify your need to use a credit card, even though it is a secured one. Some of the benefits are given below:

Increase your credit score:


One of the very best benefits of using a credit card is that it can increase the credit score. People, who are going through a low rate of credit score, cannot get access to any kind of loan or the facility of using a credit card. Since, this credit card is secured; users do not face any problem in obtaining them. So, when people are stuck in a bad credit score, the secured credit card usage can become a way out for them to give a boost to it. People, who are using the credit card for an increase in the credit score, also need to follow a very important step. It is that they will have to ensure that their card provider or the money lender is regularly reporting their card activities to the main three leading credit score analyzer of the country. This regular report will help the credit score maker companies to regular update the credit score of such people. At the same time, you need to understand the fact that rebuilding the credit score is a matter of patience. You cannot rebuild your credit scores over a night. If you have a low credit score, it will stay on your credit history for seven years. If you consistently repay your loans very quickly, it will not give an instant boost, it will take time to get a boost. All you need to do is that you take care of the payments regularly. At the same time, you take care that the reports are done regularly towards the credit score makers and credit history recorder companies. There are three leading companies in the marker. Make sure that your credit activities are reported to at least any of these companies by your credit card provider or the lenders to whom you are now repaying regularly.

All kind of purchases:

Sometimes it is seen that many companies are allowing to purchase services form them only by the medium of credit cards. For example: if you are renting a car or booking for an airline ticket, then you would definitely require the credit cards. These companies do not accept cash or check. Now, if you have a low earning, you will not be able to avail yourself an unsecured credit card as the unsecured credit card requires a high cash flow to secure the high amount of credit line they provide on the card. That does not mean that people who have a low income will not rent cars or purchase airline tickets. To ease their purchase, the secured credit card is handy. You will not have to obtain a high range income, or to pay a high amount of additional loan costs on secured credit cards, but you will have the flexibility of purchasing different products using the credit cards.

Using the credit cards to close unnecessary accounts:

Sometimes people have to open bank accounts for different reasons and after the matter gets resolved, the requirement of that bank account becomes unnecessary. So, then the person will have to pay unnecessary fees to run the account. Normally, closing up a bank account makes a lot of hassle, as you will have to go through a lot of paper work. The advantage of using a credit card is that with this facility one can close the bank accounts very easily and through online. People who cannot afford to use a high amount of money for an unsecured credit card can use a prepaid credit card for closing up unnecessary accounts.


It will stop you from applying for credits often:

Usage of an unsecured credit card means that you will apply for credit when you will finish the credit limit. Every credit card has a credit limit and renewal of that credit limit is taken as applying for new credit. Frequent application for credit decreases your credit score. So, if you are using an unsecured credit card or going through a low credit score, then the frequent application for credit cards will reduce your credit score or make you totally ineligible to obtain loans. On the other hand, if you are with a secured credit card, then instead of applying for new loan, you are depositing the credit limit for spending. So, that means using a secured credit card helps you to refrain from applying for new credit. Thus, it gives a boost to the credit score of the borrowers.

The benefits are similar to the unsecured credit cards:

One of the greatest part to use the secured credit cards are that you will not feel any difference in facilities to use them, except the fact that you have a limited credit line that depends on how much you deposit. For example: you can pay your loan installments with the help of this credit card, you will be able to deposit in your bank from ATM booths, make withdrawal also you will be able to make easy home purchases. These kinds of activities will also increase the credit score of the users. Thus the additional credit card facilities justify the little bit amount of additional user cost that comes adjacent with the card, though the user facility is almost like a prepaid card.

No more frustration of requirement:

For qualifying for unsecured credit cards, the borrowers need high end qualifications. Meeting all these criteria and qualifications is really tough for low earning or medium earning people. People who have a low or medium level earning might find it little but frustrating as well. The qualifications for an unsecured credit cards are: a high score in the credit scoring, a high ability to repay the loans one have on their shoulder, the repayment history of the borrower, the earning of the borrower, the employer history which will ensure that the borrower is going to be in a good cash flow after taking the credit card as well. The financial stability criteria are also met with such qualifications. Also, the lenders will check if the borrowers have paid all their loans at nation21cashloans.com on time and thus they never had any late payment penalties. These are quite high end qualifications to meet for any borrower. The low earning or the medium earning people will not only find them hard to meet, but also they might find it frustrating. At the same time, sometimes it is even hard for people who have a high level earning. So, now, when you have the option of secured credit cards, you no longer have to think about these heavy qualifications to meet the criteria of obtaining a credit card. You will be able to obtain a credit card any time, with little or no qualifications.


Different types of secured credit cards:

Now when you know that you can actually enjoy immense level of benefits with credit cards, it is important for you to know what kind of secured credit card will be good for you. Yes, there are different types of credit cars available for you matching your criteria. Some of them are given below:

Secured credit card for business:

The small business owners can be at the highest facility end on the event of receiving a secured credit card. There are several benefits that come adjacent with the secured credit cards. That is why they are as popular among the small business owners as these facilities causes’ great help for the small business owners. Some of the benefits are listed below:


  • 0% Introductory APR on the balance transfer.
  • No application of annual fees on the issued credit cards.
  • The interest rate for the credit card is very low.
  • The credit card owner can win cash rewards with utilization of credit cards in various places.
  • The card owner can use various credit card bonuses by fulfilling various milestones. These are usually called as bonus miles.
  • The management of bank account will be very much easier with the credit card than those bank accounts which do not come up with any credit card facility.
  • You can use the facility of online credit card approvals within 60 seconds after applying, when you are actually applying for secured business credit cards.

Secured credit cards for students:

For students, using a credit card has huge financial benefits so plan it’s future. On the other hand it actually eases down the life for the students who are living away from home. Some of the benefits of using a secured student’s credit card are given below:

  • The credit card usage for a student gives him or her opportunity to build up the credit score in a very early age. It helps them in the future when they go to pursue their career with the help of third party credit assistance.
  • In case of emergencies, the credit cards give the facility of getting quick access to credit assistance.
  • Students can learn credit management form the very beginning of their life.
  • Students do not have to carry cash money with them. With the assistance of a secured credit card, they will always be secured with their money.
  • A secured credit card for the students helps them to obtain student loans later. Normally the loan lenders look for the credit history of the parents when it comes down to the students’ loan or sometimes the student finds it very hard to obtain a loan as they do not have a credit score. Now, when they have a credit card in the very beginning of a student life, getting access to student loans becomes very easy for them.
  • The home away students reap out the most benefits of such kind of credit cards. As they live away from home, they need to have money always and carry out the money. Since now they have credit cards, their parents can easily deposit money to their credit card for ATM booths and instantly they get it, where in past it could have taken 2 or 3 working days.
  • Since the credit card is secured, the students cannot spend too much in a flow. They have to be in the limit as they know that they can only spend what they deposit. Thus the students’ credit card with secured facilities helps the students to spend within a certain limit.