1 year, 9 months ago
via credit-qna.com
What's the difference between a credit card and a secured credit card?
I have no experience with credit cards since I don’t have one and I don’t want to get one yet. But, I often heard about credit card and secured credit card. I’m just wondering how one differs from the other or which one is better to own.
images:
Separate topics with commas, or by pressing return. Use the delete or backspace key to edit or remove existing topics.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$4 Answers
Credit cards are either secured credit cards or unsecured credit cards. When applying for a secured credit card, you would deposit a certain amount of money in the bank and when making a purcahse, the amount deposited would become the maximum credit limit. Sometimes the creditor will increase the maximum amount slightly higher than the initial deposit. An advantage of this card is that you are assigned a fixed credit limit based on the desposit, which can prevent one from overspending and when depositing the money it can improve your credit score.
With an unsecured credit card, you don't have a deposit or downpayment on a deposit. They have a higher credit limit and much lower interest rate. This card is good for someone that is well able to manage his or her finances, manage credit debt and make timely monthly payments.
http://www.buriedincreditcarddebt.com/images/scissors.jpg
With an unsecured credit card, you don't have a deposit or downpayment on a deposit. They have a higher credit limit and much lower interest rate. This card is good for someone that is well able to manage his or her finances, manage credit debt and make timely monthly payments.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$Report Abuse
It's better to have an unsecured credit card. It's harder to get because it is not secured by any deposit, it's pure credit being extended to you, often for no annual fee.
People with poor credit or no credit often can't qualify for such a product. They have to give a deposit to the credit card company to secure their line of credit. Meaning if you pay according to the contract, at some point when you close the card your deposit will be returned to you. If you don't pay back the card according to the terms, the company will shut off your account, and use your deposit to pay off the debt plus interest.
Generally the deposit is as much as more than the amount of credit being extended to you. People often think, "Gee if I had three hundred cash, why would I need a credit card with a two hundred dollar limit?" It's just a way to establish credit.
If you go to buy a house, no credit is preferable to bad credit, so don't get a card at all unless you think you can use it correctly
People with poor credit or no credit often can't qualify for such a product. They have to give a deposit to the credit card company to secure their line of credit. Meaning if you pay according to the contract, at some point when you close the card your deposit will be returned to you. If you don't pay back the card according to the terms, the company will shut off your account, and use your deposit to pay off the debt plus interest.
Generally the deposit is as much as more than the amount of credit being extended to you. People often think, "Gee if I had three hundred cash, why would I need a credit card with a two hundred dollar limit?" It's just a way to establish credit.
If you go to buy a house, no credit is preferable to bad credit, so don't get a card at all unless you think you can use it correctly
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
A regular credit card is an unsecured credit card. This is where a consumer is extended a line of credit based on their credit worthiness and the card issuer sets the available credit limit and the consumer is bound to the terms of the credit card agreement. This includes annual percentage rate, late fee charges, and over-the-limit fees as well.
A secured credit card is where the consumer sets the credit limit by depositing a certain amount on the card. This card is often used by newer/younger consumers because the account holder is not able to spend beyond the original amount that was originally deposited on the card.
My first credit card was an unsecured one and I used it for about two years before applying for an unsecured credit card. The secured card is beneficial in the sense that it helps you build your credit while at the same time eliminates the worry of having too much available credit.
A secured credit card is where the consumer sets the credit limit by depositing a certain amount on the card. This card is often used by newer/younger consumers because the account holder is not able to spend beyond the original amount that was originally deposited on the card.
My first credit card was an unsecured one and I used it for about two years before applying for an unsecured credit card. The secured card is beneficial in the sense that it helps you build your credit while at the same time eliminates the worry of having too much available credit.
images:
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
A secured credit card is a type of credit card that requires the user to make a security deposit in order to qualify for the account. A security deposit is required if you have had credit issues in the past or even if you have no credit. It is an option for people to still get a credit card. They are often used to build good credit. The amount the cardholder is required to deposit can differ from card to card and can be based on the creditworthiness of the applicant.
The deposit that is made it goes into a FDIC savings account and can be used by the card issuer if the terms and conditions of the account are not met by the cardholder. For example, if the account becomes delinquent, then the card issuer may use the deposit to bring the account current. The deposit just ensures that the bank will not lose out if the cardholder does not pay on the account.
The card still works the same in that the account holder is still required to make monthly payments and most cards still charge interest, late fees, and etc. In many ways the account works just like a credit card, except for the security deposit. The main point of a secured card is to build credit so eventually you can get a traditional card that offers better perks. Check out this article from Credit Card Offers IQ, it will give more detailed information and even provides some secured cards.
http://creditcardoffersiq.com/credit-card-tips/whats-the-point-of-a-secured-credit-card/
A credit card is a card that allows to make charges and basically promise the bank you will pay it back. The card issuer gives the card holder a line of credit based on their creditworthiness. The card is a revolving line of credit which means it does not need to be paid in full. You will not be charged late fees as long as the minimum payment is made by the specified date, usually every thirty days. Any remaining balance is carried forward and interest is charged according to the cardholder agreement. With a credit card there is no security deposit required.
Here's another article that might be helpful as well. Best of luck!
http://creditcardoffersiq.com/blog/credit-charge-prepaid-debit-gift-cards-what-the-heck-is-the-difference/
The deposit that is made it goes into a FDIC savings account and can be used by the card issuer if the terms and conditions of the account are not met by the cardholder. For example, if the account becomes delinquent, then the card issuer may use the deposit to bring the account current. The deposit just ensures that the bank will not lose out if the cardholder does not pay on the account.
The card still works the same in that the account holder is still required to make monthly payments and most cards still charge interest, late fees, and etc. In many ways the account works just like a credit card, except for the security deposit. The main point of a secured card is to build credit so eventually you can get a traditional card that offers better perks. Check out this article from Credit Card Offers IQ, it will give more detailed information and even provides some secured cards.
http://creditcardoffersiq.com/credit-card-tips/whats-the-point-of-a-secured-credit-card/
A credit card is a card that allows to make charges and basically promise the bank you will pay it back. The card issuer gives the card holder a line of credit based on their creditworthiness. The card is a revolving line of credit which means it does not need to be paid in full. You will not be charged late fees as long as the minimum payment is made by the specified date, usually every thirty days. Any remaining balance is carried forward and interest is charged according to the cardholder agreement. With a credit card there is no security deposit required.
Here's another article that might be helpful as well. Best of luck!
http://creditcardoffersiq.com/blog/credit-charge-prepaid-debit-gift-cards-what-the-heck-is-the-difference/
source(s):
www.creditcardoffersiq.com
www.creditcardoffersiq.com
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
