Credit score is really crucial for our financial life since it has a big influence in many sectors. As an example, the banks or credit companies use it to determine how much credit line is allowed to be granted. Accordingly, it is important for us to maintain a good credit score. However, unexpected things resulting in a bad credit can happen at any time. Fortunately, secured credit card can be one of the ways to deal with it. There are several reasons why we have to choose secured credit cards for bad credit.
- Low Security Deposit
First, it is because of the low security deposit. Secured credit card requires the applicants to have a varied amount of deposits to open the credit card. The higher deposit they pay, it means the higher initial credit line they can get.
Most of secured credit cards have low refundable security deposit. For example, the Capital One Secured Mastercard allows customers to get $200 initial credit line for deposits of $49, $99, or $200. In addition, customers can raise their credit line if they do the payment on time for the first five months. For that reason, it is a good start to repair bad credit with secured credit cards.
- No Annual Fee
The second reason why we have to consider secured credit cards for bad credit is related to the annual fee. Regular credit cards have particular fees to be paid in every year. On the other hand, some secured credit cards offer no annual fee. It means that there is no need to worry about letting extra money disappearing from our account. Some secured credit cards which offer no annual fee include Capital One Secured Mastercard, Discover it Secured Card, and Digital Federal Credit Union Visa Platinum Secured Credit Card.
- No Credit Check
No credit check is the next reason why we have to consider secured credit cards for bad credit. Some secured cards do not require a credit check. To apply for the secured credit card, a credit history is not needed and some companies do not check the credit. As an example, OpenSky Secured Visa does not do a credit check. Instead, customers need to have a proof of identity, an annual income, and a Social Security number. Credit check is also not required by Primor Secured Visa Classic Card. As a replacement for that, it obliges the customers to have the monthly income of $100 more than the monthly expense.
A Big Chance to Rebuild the Credit Score
The next consideration is the big chance to rebuild credit score. To rebuild it, all we need to do is to always finish the monthly payment before the due date to avoid credit damage. If we use secured credit card responsibly, the credit score can be upgraded by banks or companies. Therefore, to repair bad credit with secured credit cards is a possible thing to do.
Those are some reasons why we have to choose secured credit cards for bad credit. Unpredictable problems resulting in a bad credit can come up at any time and damage our financial life. Nonetheless, we can repair the bad credit and maintain good credit by using secured credit cards responsibly.