Secured credit card - Use it judiciously to rebuild your credit

Secured credit cards are offered by many national, regional and local banks. Opening a secured card consists of depositing secured credit card a set amount of money in an account with the bank providing the credit card. You do not make additional deposits to the account nor do you make withdrawals. The funds on deposit will be the set limit on your card.

For example:
You open the account with $500.00 on deposit and your card limit is $500.00.
The $500.00 on deposit will not be touched unless you fail to make a payment in a given month. If you do not make a payment, the money on deposit will secure the payment.

How can secured credit cards be used?


  • A secured credit card functions just like a credit card. You can use the card to make sale purchases (like a grocery store checkout line), and also for online purchases. The card will carry the Visa, MasterCard, American Express or Discover logos.
  • A secured credit card is an effective tool for all of the same things you use a debit or credit card to pay for.
  • You will receive a monthly bill and are required to pay the amount due by a certain date just like a credit card. If you fail to make a payment, you can be charged fees, so don’t let a payment slip by. If you do it, then it can be reported to the credit reporting bureaus.

A secured card can help you rebuild your credit
One advantage you have with establishing one or more secured accounts that report to credit reporting agencies is it helps to:

  • Establish credit if you are just starting out as a young adult
  • Help you restore credit if you had past collection accounts with prior unsecured credit cards by establishing new and positive credit card trade lines
If you have suffered financial setbacks that led to negative entries on your credit report and the hit to your credit score that goes with missing payments – a secured credit card can be used as a credit rebuilding tool. Be sure to select a secured credit card from a bank that reports your account to the credit reporting agencies. Secured credit card – A good financial tool for young adults
  • A secured credit card provides a good entry level to credit card management and budgeting for college students and young adults
  • If you want to help you’re young adult child establish credit without the risks of spending beyond his/her means to pay back credit card debts, a secured card is an excellent alternative.
  • With a set limit of $500.00 to $1000.00 a young adult can learn the responsibility of using credit wisely without the risk that a cards balance can balloon out of control. The security deposit backing up payment means that if trouble making monthly payments does not lead to default and debt collection efforts.
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