Taken from Wells Fargo:
Quote:
A Secured Visa Card works like any other credit card, and can be used wherever Visa is accepted. Only you will know it's secured.
* To establish your credit limit, you must make a deposit of $300-$5,000 (in $100 increments) to a “collateral account.â€Â
* Your collateral account determines the limit that you may charge up to, and is held as a deposit.
* You still need to make monthly payments toward any balance you accrue, as with any other credit card.
After 12 months, you may be eligible to graduate to an unsecured credit card, and get back the money you deposited in your collateral account.
So basically, if you have at least $300.00 you can apply for this card and send them the money. They put it into a savings account which you
will not have access to unless you close out the account. Whatever dollar amount you gave them as a deposit will be the amount of your credit limit. The rest is like a normal credit card. You'll get a bill each month with a minimum amt due each month.
If, for some reason you stop making monthly payments; they will then take your deposit as payment. Secured cards ARE reported on your credit report and if you make your minimum payment each month, your credit score will improve.
I used them(Wells Fargo), and have had no problems with them. Low fees/rates. One month I was not going to be able to pay the minimum and I called them a week before the due date. They gave me a 14 day extension without a problem, without and penalties/rate raises.
