When your credit history has been turbulent enough in the past that you can’t get approved for an unsecured credit card, you may well find yourself looking for the best secured credit card.
But how do you compare secured credit card offers? What factors should you look for in sifting through the numerous offers and finding the one that best fits your needs and priorities?
What is the best secured credit card?
There isn’t necessarily one single best secured credit card on the market. Instead, the offers available vary according to the applicant, and the applicant’s preferences will determine, in part, which one is considered the best for him or her.
But here are some of the most important questions to ask before deciding on a secured credit card:
- How high of a security deposit is required to open the account?
- How high will my credit line be relative to my security deposit?
- Will I have to pay an annual fee? If so, how much is it?
- How high are late fees, cash withdrawal fees, and other fees?
- What kind of APR does the card have, and can I get that lowered by making a certain number of payments on time?
- Will interest accrue immediately, or can I avoid interest by paying off my balance in full on time?
- Are there any points or other perks that I can earn by using the card?
- How quickly can I increase my credit limit by making on-time payments?
- Can I eventually convert to an unsecured card?
How to use your secured credit card effectively
Once you decide on which is the best secured credit card for your situation, you’ll want to use it wisely to ensure it helps and does not hurt your credit score.
Beyond making all monthly payments on time, make sure you use the card every month. The more you use it and pay it off, the bigger positive impact it can have on your credit score.
Make sure you never have to pay interest, and avoid a card with an annual fee, if these are at all viable goals. Avoid ATM withdrawals and anything with a built-in fee. Just consistently use and quickly pay off your card.
Work hard to make the requisite number of on-time consecutive payments to raise your credit line. But once it is raised, don’t let the balance ever get anywhere near that limit since that can negatively affect your credit rating.
Why choose Bonsai Finance?
At Bonsai Finance, we can help you find the right secured credit card with highly competitive rates and terms, even if you have bad credit. We can also give you milestones to meet on your way toward increasing your credit line and eventually qualifying for an unsecured card.
We realize that in today’s increasingly cashless society, even those with damaged credit need access to a credit card. And we also realize how easy it is to get your credit damaged, and we provide you with advice on multiple ways to help restore it.