Repair Your Credit with Bank Secured Credit Cards

There are many credit cards for all types of consumers. Many of us who has a good credit rating are flooded with too many choices. However for those of you who may have a bad credit score, of whom wants to repair their credit, one of the best options is a bank secured credit card. Not only can a bank secured credit card help you to repair your credit, it works like a usual credit card, so that your friends does not have to know.

Same Look and Feel Like a Traditional Credit Card.

Banks secured credit cards look and work like traditional credit cards. The difference is that the issuing bank will use your bank account balance as a collateral. Your credit limit depends on how much you have in your bank account. The bank will take money out of your account when you are late in paying your credit balances. Bank secured credit cards ensures that neither yourself nor the banks lose out in anything when they issues a credit card to a person with bad credit.

Rebuilding your Credit bit by bit

Bank secured credit cards are highly suitable for those who have a bankruptcy or simply do not qualify for a line of credit due to bad credit or no credit history. By using bank secured credit cards and paying the monthly balances on time, you will be taking steps towards rebuilding your credit. Make sure you are able to pay your bills on time and the banks will recognized your discipline and credibility. Subsequently you will be able to apply for a unsecured line of credit or better known as a credit card.

No debts with a Bank Secured Credit Card

A bank secured credit card will only provide you with a balance that equals to what you have in your accounts. You will not be able to spend more than that. That means that you will not accumulate any debts. One detail to note is that the banks will take money out of your account if you fail to make payments on time monthly. Although this seems to be a back up plan for payments, do not allow it to happen as it will affect your credit score.

Late Charges Apply as Well

Like a standard credit card, bank secured credit cards can hit you with late charges when you do not pay your bills on time. These late charges incur interest charges and can compound faster than you think. The compounded late charges and interest charges can add up quickly that your bank account can be easily drained. Make sure you pay your bills on time and you do not have to worry about these types of charges.

For those who need to rebuild their credit, a bank secured credit card is a great card that can offer you the benefits of a line of credit as well as a facility to build your credit score. Most banks allow such secured cards but they do not readily offer to anyone who comes in through the door. Make sure your credit card bills are paid on time and once you have build up a decent credit, you can apply for a standard credit card; get a low interest credit card then.

For those who have bad credit or need to start building credit, a bank secured credit card is a great place to start. These cards can lead you to an unsecured credit card, providing you pay your bill on time. Almost all banks offer these credit cards, all you have to do is ask. Once you have kept your credit card in good standing for a period of time - you’ll have the satisfaction in knowing that you are taking the right steps in rebuilding your credit.

Can you Avoid Credit Card Debt With a Low Interest Credit Card?

We see many people saddled with credit debt everyday. Debt from credit cards can be very stressful, and can lead to many unwanted destabilizing situations. Anyone can run into credit card debts, even people who are holding a low interest credit card can run into debt if they are not careful. Credit debt is never a good debt as the supposedly low interest or low APR can quickly add up with compounding effects. This can lead to bankruptcy and the downgrading of your credit report.

Getting in Debt is Easy to Do, Getting Out is Difficult

Remember this, getting in credit card debt is easy but getting out of it is something that takes a lot of work. Just because you are holding on to a low APR credit card does not eliminate you from harm, once you start letting that minimum payment slide from one month to the next, you have started the ball rolling. Choosing a card with low interest is step 1, step 2 is to ensure that the monthly balances are paid in full.

Even if you go to an agency or company that specializes in helping people get out of credit debt, it will not happen overnight. To get out of debt, it will take you much time and effort to get the debt under control and begin the long process of rebuilding your credit. This can sometimes take years.

Learn About Personal Finance

You will need to learn more about credit, managing your money and finances in general, in order to defend yourself from falling into debt. Personal finance is an important education. Just because you know that low interest credit cards are better than high APR credit cards does not make anyone a financial expert, you should pick up more tips on planning for your finances by reading and taking courses from the community college, for example.

Learn to create a monthly budget for all your expenditure and use your credit card only when necessary. The low interest credit cards can help if you really need to stretch your payments, but learn to do that as an exception not a norm. If you stick to a plan and avoid steering away from it, you’ll not have any problems staying out of debt.

Get Rid of High Interest Credit Cards

If you have other credit cards that you don’t really use, such as store credit cards that are known for high interest rates, you should get rid of them. If you have a lot of open accounts, you can also look for debt consolidation, which will combine all of your debts into one single monthly payment so you can get them out of the way quicker. By using debt consolidation services, you will only have one bill to pay and the interest are usually lower.

Pay Your Balance in Full, Even On A Zero Interest Credit Card

When you receive your credit card bills, you should always pay more than just the minimum. Ideally you should pay the entire balance. If you only pay the minimum amount, you could get yourself into credit debt very fast as you can get yourself in a situation where you are only paying nothing but interest. Every month, you should strive to pay the minimum amount and then some. Paying more than the minimum amount will also help to pay off your credit card bills faster as well. That low APR credit card is just an excuse to pay just the minimum.

If you are already in credit debt, there is still help. You can find debt management or debt consolidation services that can help you to reduce your debt. No matter how dire the situation, there are always ways out of credit card debt. Look out for a good debt consolidation agency who can help you. But remember, pay your bills on time and not just the minimum and you will be able to stay debt free.

Jared L