There are some things that a credit card can do that cash usually can't. Robberies are common, so a credit card can keep you from carrying around large amounts of cash that could be dangerous. Also, if the store you want to buy something from has a credit card machine, you don't have to worry about finding an ATM if you suddenly run out of cash.
A credit card is definitely convenient, and even though some places still don't take credit cards as payment, plastic is becoming more and more common. There may come a time when credit cards are more convenient than cash. But can someone with bad credit wait for that day to come?
If you are in debt or have a history of not paying your bills, you might not get a credit card when you apply for one. Credit card companies are getting more and more worried about identity thieves and people who don't pay their bills, which is a good thing. You don't have to worry, though, because you can still get a credit card even if you have bad credit.
The secured credit card is like having both a credit card and a debit card in one. By its name, a secured credit card is one that is protected by a deposit made by the cardholder. The amount of credit on the secured card will be equal to the amount of this deposit. Most of the time, cardholders should put down at least twice the amount of credit they want. For example, if a cardholder puts down $10,000, he or she will get between $5,000 and $10,000 in credit.
The credit card company can take this money back if the cardholder spends too much and doesn't pay the bill. This makes it possible for people with bad credit or no credit history to carry a credit card. A secured credit card is often advertised as a way to improve a credit score that isn't very good.
If you want to get a secured credit card, you might want to think about the following things before you apply.
Because secured credit cards give people who spend a lot of money a lot of freedom, credit card companies often charge higher fees or service charges than they would for other credit cards.
You can't get out of debt by using a secured credit card. You still have to pay your secured credit card bills on time as the cardholder. If you decide to pay less than the bill you have to pay, which is called "defaulting," the credit card company is allowed by law to take the rest of the money you owe from your initial security deposit.
There are different packages for secured credit cards, and some of them let you off the hook for late or unpaid bills. But if you don't pay your bill for more than five to six months, the credit card company may close your account and keep the whole security deposit. The cardholder may also be in debt and have to pay the unpaid part of the bill plus interest.
Like your other credit cards, a secured credit card will require you to be responsible with how you spend your money. You will be able to rebuild your credit score as long as you spend wisely, watch what you buy, and keep an eye on your budget to make sure it fits your lifestyle. You can reach this goal with the help of a secured credit card.
