You’re not going to get airline miles with a secured credit card, but you also don’t have to pay 21 percent interest. There are dozens of offers for secured cards on the market. Here’s some tips for making sure you get the best deal you can.
1. Check your credit score first.
While a score in the high 500s or low 600s isn’t going to qualify you for a platinum card, you still might be able to get a regular credit card rather than having to pay a deposit for a secured card.
2. Make sure the bank reports to the three major credit bureaus.
If it doesn’t, the card won’t help you build your credit history or raise your score.
3. Look for a detailed list of all fees you will be charged.
Activation fees, annual fees, program fees, monthly servicing fees and others can add up quickly. A card with a $250 limit that charges $208 up front not only leaves you with little room for spending, it also leaves you with a high balance-to-available-credit ratio, and could hurt your credit score instead of helping it.
4. Don’t settle for a sky-high interest rate.
Some banks charge 19.9 percent interest or more for secured cards, but there are cards that charge far less. And some will pay interest on your deposit. Just because you’re looking to repair your credit doesn’t mean you shouldn’t shop around.
5. Make sure your card offers a grace period before interest is charged.
Some secured cards start charging interest right away, but there are plenty that offer the 25-day grace period most regular cards feature.