SECURED CREDIT CARDS 

KNOW ABOUT THE FEATURES OF THIS VARIANT OF CREDIT CARDS

Published By MintGenie Team | 08 Feb, 2024

What is a Secured Credit Card? 

A secured credit card is backed by a monetary deposit provided by the cardholder to the issuing bank, serving as collateral for the lender.
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Credit Score Enhancement

Ideal for individuals with limited or poor credit scores, using a secured credit card over time can positively impact credit scores, as the issuer reports the account history to credit score companies.
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Here are some features of a secured credit card: 
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Deposit-backed Credit Limit

Secured credit cards are supported by a deposit, serving as the card's credit limit, distinguishing them from regular credit cards.
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Collateral for Payments

The deposit acts as collateral, providing a safety net for the card issuer if the cardholder fails to make timely payments.
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Cost Considerations

The requirement of a deposit makes secured credit cards a relatively expensive method compared to traditional credit cards.
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Credit Score Improvement

Designed for subprime customers aiming to enhance their credit scores, these cards offer an opportunity for credit score improvement.
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Upgrade Potential

Timely payments may lead to credit limit increases or an upgrade to an unsecured card, but missed payments can significantly impact the credit score.
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