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Secured Credit Cards


Once you decide to gain control of your finances and fix your credit, you will need to get rid of negative items on your credit report. Then, you will need to add positive accounts and start to make on time monthly payments to improve your credit standing.

How to Choose a Credit Card for Bad Credit

It will be very difficult to apply for new credit card with bad credit. Not every credit card that’s aimed at people with bad credit is a good credit card for you. The Capital One Classic Platinum is a good choice for an unsecured credit card that approves people with bad credit scores between 550 and 640. There’s currently a 0% APR and the annual fee is $39. However, approval is still based on your credit and is not guaranteed.

If you are finding it difficult to get an unsecured credit card, secured cards are relatively easy to obtain. The card companies report your activity to the credit reporting companies, giving you a foundation for your credit history. 

Learn how to increase your credit score with secured cards. Our expert credit consultants will work with you to fix your credit using a custom-tailored approach designed to give you the best possible solution.

What is a Secured Credit Card?

Secured credit cards work much like a traditional card, but with one big exception. Before using the card, you must deposit cash with the credit card issuer. The issuer then holds the deposit as security for future credit card payments. Importantly, you must make your monthly payments on the card; the security deposit is there to protect the credit card company in case you don’t make your payment. The credit limit on a secured card typically is equal to the amount of your deposit. For example, if you put $500 in the account; your available balance will be $500.

Secured credit cards are viable alternatives to regular credit cards, but watch out for cards such as Orchard Bank Classic MasterCard, which approves credit scores as low as 490. The downside is that the interest rate for purchases can be as high as 28.9%, depending on your credit. There’s also an annual fee up to $79 and a one-time processing fee up to $39. In addition, you must provide a minimum security deposit of $200.

Thus avoid subprime or fee harvesting cards, which are known for preying on people with bad or no credit. The fees on subprime cards can easily total $200 to $300 in just the first year, which is about the size of the credit lines they offer. Don’t fall for a subprime card and have almost all of your credit line eaten up by fees. The issuer is the only one who benefits from these cards!

Does Secured Cards Report to the Three Major Credit Bureaus?

When it comes to secured credit cards, this is one of the most important things to consider. Any credit card you choose for credit repair must report to the major credit bureaus. The reason for having a secured card goes far beyond being able to make a purchase. It's a vehicle for building a good credit history. Otherwise, your timely payments won’t benefit you in your quest of rebuilding your credit history.

Does the credit card convert to an unsecured credit card?

The best secured credit cards will convert to an unsecured credit card after 12 to 18 months of timely payments. Establishing a payment history will help you qualify down the road for the major credit cards. Using secured cards appropriately and within the set parameters will help rebuild your credit.


How do I use my Secured Credit Cards?

Make small purchases and pay the bill in full when it arrives. Don't fall into the trap of credit cards-overspending and/or making minimum payments. Once you have built a solid credit history over 12 months or more, you can apply for an unsecured card. Please talk to a GCM credit card consultant at (888) 247-8882 about how to apply for secured cards.