Don't Get Scammed by a Secured Credit Card Offer
Contributed by Stephanie Litaker
The advertisements about secured credit cards
There's no doubt that you've seen many advertisements and offers for secured credit cards, but have you stopped to ask yourself if it's really as good as it sounds? Companies that offer secured credit cards prey upon those individuals with no credit, or a poor credit history, because they know most credit card companies will not work with these individuals. The claims made in advertisements for secured credit cards will often make promises that cannot be delivered, but know exactly what to say to entice you by dangling the carrot in front of you.
The difference between secured and unsecured credit cards
While the name alone will suggest what a secured credit card really is, you may have questions surrounding this topic. Basically, it boils down to this: If you have a secured credit card, you will have to give the credit company a deposit to ensure they get their money from you - one way or another. You can use your credit card, either secured or unsecured, to purchase goods or services. However, a secured credit card may require you to open a savings account with the company giving you the card.
The savings account requirement may range from a small amount such as $100 all the way to several thousand dollars. Most likely, your credit limit will be based on the amount of the deposit (or savings account) you are required to place with the credit card company, typically between 50 and 100 percent of the total amount you have "secured."
When you begin working with a secured credit card company, make sure you understand the terms and conditions attached to your account, before you give the company any money. You may receive interest on the deposit you have given them.
