While away at college, my friend Brett got a little bit out of control and never for a moment considered the consequences of his actions.Brett majored in Partying.He spent bushels of money chasing girls,closing down the bars and generally hemorrhaging cash any chance he could. When he (yet again) failed to pay on time… the bank yanked his credit cards.Brett has since cleaned up his act and has rehabilitated himself but the black mark on his credit is like a bruise that won’t go away.Fortunately, he was able to re-build his credit and start over with a secured credit card.
There are a lot of different flavors of credit cards but not a whole lot of choices for people like Brett: reformed credit “offenders.” Secured credit cards are one way to re-build your credit or begin to build a credit history.
The secured credit card is similar to a debit card as it is tied to your savings or checking account. If you only have $100 in your bank account, you can only spend $100 on your card.
Basically, the lender is using your bank account balance vclubshop.tel as collateral. That means that, even though there is cash in your account you still have to pay the monthly balance on your expenses.The money in your account will only be touched if you fail to make timely payments.
Aside from generally higher fees and interest charges, secured credit cards work like regular credit cards.
You are expected to pay the bill every month on time. This shows the bank that you are a responsible consumer. Act irresponsibly and you can watch your interest charges go sky high,get tagged with nasty late charges,see your savings dwindle away and add another smudge to your spotty credit history.
Initially, it may seem like the bank has you jumping through hoops but re-establishing a positive credit record takes a lot of time and patience.The prudent use of a secured credit card is still one of the easier ways to re-build your credit and may be your only option to continue having access to a major credit card.