Secured Credit Cards

Secured credit cards are another very popular breed of credit cards. Secured credit cards, as their name suggests, are secured. Well, they are secured for the credit card supplier, . Secured credit cards need you to open an account with the credit card supplier and maintain some money balance in that account. This money balance acts as a security for the supplier of secured credit card. Your credit limit is dependent on the amount you hold in the account that you have started with the supplier of secured credit card. This is usually between 50 to 100% of your account balance. So in that sense, secured credit cards are not credit cards (since they don't offer you any credit ). For this reason, the secured credit cards are sometimes also referred as debit cards.

Why is the idea of secured credit cards so important?

It's not the people with bad credit standing who go for secured credit cards. Some people go for secured credit cards because they don't need to bother themselves with the bills etc for credit cards. They don't like to even fill-up application forms for unsecured credit cards.

As they know, credit card debt is a raging issue which is caused by improper usage of credit cards. Such people finish up spoiling their credit standing to an extent where they cannot get another unsecured credit card (that is what they call the often used credit cards). Even after they have paid off their dues and cleared their debt, their credit standing still haunts them. For such people, secured credit cards are a boon. Secured credit cards present them with a chance to not only receive a credit card in the first place but also to improve their credit standing by using the secured credit card in a disciplined way (paying their dues in time, controlled spending, utilizing a maximum of 70% credit limit etc etc). As they continue with these nice habits, their credit standing gradually improves over a time period. Hence secured credit cards provide them with the means of rectifying their mistakes (credit standing).

Some people go for secured credit cards because they have heard plenty of horrific tales on credit card debt a possibly anyone from their relatives or of their friends was devastated by credit card debt and they don't need to repeat the error. So they pick to go for a secured credit card.

Then there's some who don't like to borrow money (even if it means borrowing from a credit card supplier by using their credit card). However, such people are very rare to find.

Whatever be the reason for going for it, the secured credit cards are surely popular .