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Should I Go For Secured Credit Cards?
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Secured credit cards are much talked about these days and it is because it offers a way out of bad credit rating. It is possible that while everyone around you is talking about it, you might still not be sure, why people prefer it over regular credit cards.
Secured Vs. Unsecured Credit Cards?
The difference between secured and unsecured credit cards is much similar to the difference between secured and unsecured home loans. The secured loans or secured cards require the consumer to place a security – collateral – against what he is borrowing. In terms of credit cards, it is a certain amount and in case of home loans, it is the actual home that is being purchased with the loan money.
The amount that the consumer deposits for the secured credit cards is also, most of the times, the limit of the credit card. So the consumer can spend within than limit.
Benefits of Secured Credit Cards
There are certain benefits to secured credit cards which is why they are popular and much talked about. So, if you are not sure whether you should go for secured credit cards or not, then perhaps the information provided below would be helpful to you in deciding.
Helps you in Building up a Good Credit Record
The biggest advantage of having secured credit cards is that it offers you a chance to build up a good credit record. If you are new to having a credit record of if you possess a bad credit history, then this card is ideal for you. It is often close to impossible to get a credit card if one already has a bad credit but this is not the case with secured credit cards.
While other cards won’t give you the chance to prove that you would be more responsible in paying back this time, the secured credit cards will let you do so. Think of it as a last chance and then your timely payments will be reported to the authorities and a marked improvement can then be seen on your credit record.
Let’s you Enjoy the Credit Card Benefits and Transactions
As said before, if you have never had a credit record or if you have a bad one then in both cases, you are still eligible for secured credit cards. And this will let you enjoy the perks and transactions that only come with a credit card. For example, you can only make online transactions with a credit card and similarly you can enjoy the many benefits of air travel through credit cards.
Improve Your Money Spending Habit
Usually consumers rely too much on the ease of paying through credit cards. This makes them loose money spenders and it consequently leads them to an amounted debt. With secured credit cards the consumer has already made a payment at the start against the credit card allowance. He knows that it is his money that is going to be deducted so he becomes a careful spender.
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