Credit cards

You have to send money to the credit card company and your credit limit is based on the amount you deposit with them. Some secured cards start with a $100.00 min balance. Once you've had the card for a year and in good standing some of them will make the card unsecured and give you a higher limit.

Secured credit cards are mainly designed for those who have less than perfect credit. These cards can help in improving credit history. It is called secured because you make a deposit in a savings account and it is attached to your credit card.

Your credit limit will, generally, be the same amount as the security deposit. This stays on account until you decide to close the card or you graduate to an unsecured card.

Secured credit cards are offered at many major banks. They open a checking account or savings account where they deposit from 100 to 10,000 dollars. The funds are there but you can not access them. At the same time they issue you a credit card for 80 percent of the amount you deposited. If you should lapse on your credit card payments, not only would you hurt your score, but they can sieze the funds from the account. If you are serious about fixing your credit and can not get a credit card, this is the best place to start. Withing 6 months to a year of good payments, full or partial, they place the funds back into your regular checking accounts, and upgrade you to a unsecured credit card. Any balances on your secured credit cards would be then placed to the unsecured one.

Arsalan Riaz
Personal Banker
Wachovia ( A Wells Fargo Company)