Need some advice on secured credit cards.
By katsmeow1213
@katsmeow1213 (28716)
United States
March 21, 2011 10:17am CST
Because of my bad credit, I do not qualify for an unsecured credit card. So I am debating getting a secured credit card in order to build up more good credit.
If I understand it correctly, I pay a company a deposit (say around $500) then I have a $500 limit on my credit card. Whatever I spend on the card I must pay back with interest.
So it's basically a normal card only with a smaller limit and I would have to pay a deposit to get it. I plan to only make small purchases with this card and pay the balance in full every month. I'm not trying to get into further debt, I just want to build good credit!
What I want to know is, do I ever get my deposit back? Or am I basically paying $500 to establish good credit?
Have you ever had a secured credit card?
2 people like this
9 responses
@ANTIQUELADY (36440)
• United States
21 Mar 11
I'm afraid i can't help u. I don't use credit card. I have always thought if i didn't have the money to pay for something i'd save till i did. I think people get into alot of trouble w/credit cards.
@katsmeow1213 (28716)
• United States
21 Mar 11
I agree.. but I don't want the credit card in order to have more spending money. I want it specifically for credit building purposes. I need to establish good credit in order to achieve my future goals.
1 person likes this
@ANTIQUELADY (36440)
• United States
21 Mar 11
I understand what u are saying but if u have one & got in a pinch it would be very easy to say i'll just put it on the card this one time.
@katsmeow1213 (28716)
• United States
21 Mar 11
That's how most people get in trouble, yes. I'm getting into this already knowing the dangers and concequences of my actions.
1 person likes this
@cynthiann (18602)
• Jamaica
22 Mar 11
sorry Kat. I do not know diddly squat about this post. I have never heard of getting a secured credit card
@katsmeow1213 (28716)
• United States
23 Mar 11
It's how people with bad credit get a credit card. You have to make a deposit and that deposit is your credit limit. It protects the lender in case you don't pay back your debts.
I have the impression now that my deposit is given in the form of a savings account, where I may earn interest on it if I go through the proper lender. After a time, if I decide to cancel the card, I am free to close the savings account and withdraw the money. That is my understanding, though I may be wrong. Once I save up enough to open such an account I will go to my credit union and speak to the manager about it.
@cynthiann (18602)
• Jamaica
23 Mar 11
It sounds like a good plan Kat. We do not have anything like that out here. Good luck!
@katsmeow1213 (28716)
• United States
21 Mar 11
I have. None explain exactly if or when I get my deposit returned. I guess I will have to ask the lending manager.
@3SnuggleBunnies (16374)
• United States
3 Apr 13
*LOL* here's an oldie from you and you already know the answer. Yes you get your money back that was secured and it does help establish better credit rating.
@dorannmwin (36392)
• United States
24 Mar 11
I personally have never had a secured credit card, but Tom had one when we met. So, to answer the question of whether or not you ever get your deposit back, yes you do. With some companies you will get your deposit back after as little as 12 months if you've made all of your payments on time. Some companies will take as much as 24 months before you get your deposit back. If you are a member of a credit union, I would check with them first about getting a secured line of credit through them.
@katsmeow1213 (28716)
• United States
24 Mar 11
Yeah, that's pretty much my plan. Thanks for the info.
@MomsTreasureChest (38)
• United States
2 Apr 13
Yes, you would get your deposit back. The $500 deposit is yours.
However, there are usually annual fees that you pay for the privilege of having the secured credit card. The annual fee can range from $39 to $200 or more.
You are stating the terms correctly, you pay the $500 deposit which the company never really touches. Whatever you spend you pay back monthly, with interest if it's a late payment, it does not come out of the $500 deposit.
@bounce58 (17387)
• Canada
27 Mar 11
Although it wasn't explained to me then (or maybe I totally forgot), I think the very first credit card I got, 8 years ago, was a secured one. It's almost the same as what you explained. I had some money then, and I was able to deposit $2000. And for opening up an account in that bank, they gave me a $1000 credit limit on a visa card.
I think I had a good credit ratin that after a few years, I got to increase my credit limit even though I've already withdrawn my deposit.
