Credit score guides to obtain the best secured credit cards in 2021
Credit score advices to get the top secured credit cards? Prepaid debit cards offer convenience and are a safer alternative than carrying cash, but they don’t help you build credit. With a prepaid debit card, you “load” money onto the card, and the purchases you make are paid for with that money. Since you’re not borrowing money, there’s no effect on your credit score. See NerdWallet’s best prepaid cards. Offered mostly by smaller financial institutions, such as credit unions and community banks, these loans are designed to help you build a good payment history. The money you “borrow” isn’t actually given directly to you. Instead, it’s held on your behalf in a savings account while you repay the loan in monthly installments. Once you’re done, the money is released to you — and your credit report shows a paid-off loan. Learn more about credit-builder loans.
Who should get this card? If you don’t have a bank account and/or your credit check would make a traditional credit card issuer avoid your calls, an OpenSky secured credit card may be just what you’re looking for. But there’s no reason for most people to pay the $35 annual fee. We caution most consumers to avoid paying such fees on secured cards, as there are plenty of annual-fee-free options for consumers with limited credit.
You don’t have to undergo a credit check to apply, and you don’t need a bank account to qualify. If these are areas of concern for you, the OpenSky® Secured Visa® Credit Card is definitely worth a look. If not, there are better (and cheaper) alternatives. The issuer doesn’t run a credit check on OpenSky® Secured Visa® Credit Card applicants, making this an attainable option for people with severely damaged credit. You can make your deposit — minimum $200, maximum $3,000 — and pay your bills with a debit card, wire transfer, check or money order, making it one of the few secured cards that doesn’t require a traditional bank account.
Secured credit cards resemble regular credit cards with one key difference: they require a “security” deposit, the size of which determines your credit limit with the card, at least initially. The advantage to this card type, compared with using a debit card tied to a checking account or a prepaid debit card, is that account activity is reported to all three major credit bureaus (because a secured credit card is a true credit card with a real credit limit). That reporting allows you to begin building a credit history that, providing it is positive, should in time allow you to get a regular credit card and other credit products, such as loans.
What Happens If I Don’t Make A Payment? As mentioned above, if you don’t make a payment to your credit line when required, your card issuer may use some of your deposit balance to cover the amount. However, it is vital you don’t find yourself needing to rely on this. It may be tempting to skip a payment, thinking that the issue will be dealt with by your deposit, but this is not the case. You may find that your credit score — the very thing that you are trying to improve — is impacted by your missed payment. If you decide to open a secured credit card, then you should take the issue seriously. See the endeavor as an attempt to rebuild your credit and improve your financial situations in the future. See even more details on here.