Secured credit cards can be a good way for people with no or bad credit history to gain, rebuild, and get access to credit. People like students, debtors and n’er-do-wells.
Borrowers place a deposit down and the lender extends a line of credit equal to the initial deposit. This is why it’s called secured. In the event of a default, the funds are covered by your deposit.
It’s important to shop around. You’ll want to watch out for excessive fees and unreasonable add-ons. Often credit unions give good deals on these type of cards.
Bankrate offers a list of secured credit cards and their benefits.
Before getting one, make sure that they report the credit history to the credit bureaus, otherwise know one will know what a good boy you’re being and you’ll suffer the fate of one hand clapping in the forest with no one around — BEN POPKEN