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Secured Credit

Written by Kathleen Gagne
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If you have had a recent bankruptcy or have very bad credit, you might want to consider secured credit. A secured card can help you to rebuild your credit, but it will take some time and effort. The effort is well worth it, however, because there are some things you can't do without a credit card. For example, most car rental agencies will not accept cash or debit cards. A secured card may be the only way you can rent a car when you need one.

There are also other reasons for opting to get a secured card. If you need to make a large purchase, the seller may not take a personal check, and carrying a lot of cash around might be dangerous. A secured card can give you the buying power and confidence you need to make those purchases. With a secured card, you can also shop online or make airline reservations.

How to Get a Secured Credit Card

Getting a secured card is fairly easy. Basically, you will have to open a savings account with a bank or card company that offers secured cards. While the amount needed to get a card can be low, starting somewhere around $100, you might want to put more in the account, depending on what kinds of purchases you want to make. Once you have the account, the bank or company will issue you a credit card up to the amount of your deposit.

Then you simply use it like any other credit card. If you're trying to reestablish credit, it's a good idea to pay off the entire bill every month and to use the card sparingly. You should never make a payment that will arrive after the due date, and you should always pay more than the minimum amount due. Within a few months, your credit should begin to improve, especially if you make it a point to pay all of your bills on time. A secured card can be the first step in getting back to good credit if you use it right.

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