If you don’t have credit worth talking about, it can be pretty frustrating to really navigate the financial world. You will have to make sure that you have cash for everything, which can be difficult when it comes to handling emergencies. The very nature of emergencies is that you really don’t know when they’ll strike next, which makes it difficult to actually be prepared. The last thing that you will really want to deal with is having to go and try to handle everything on your own without any other support. Yet if you have credit problems already, you might wonder what you can even do to repair your credit so that you will have other money to tap into. Thankfully, there really is a solution that you will need to think about, and that solution is secured credit cards.
Now, you might think that you have heard the term secured when it comes to other financial problems. You have, actually — if you look at it from another way, anytime you secure a loan with an item of property, you are actually pursuing a secured loan. A secured credit card is simply the same concept except that you will always have the credit card long after you pay back the balance that you borrowed. This is much different than a loan, which is a one time deal.
There are a few things that you will need in order to get started on a secured credit card. You must make sure that you actually set aside enough money to afford the security deposit on the card. The security is just what you will be putting up in case you default on the card. Obviously, this is not what you want to do — you want to make sure that you are going to get your money back. Every credit card company is different; you might need to make sure that you actually use the card responsibly for a year before you can get your security back. Other companies make you convert to an unsecured credit card before you actually get your security deposit back. It’s really a matter of making sure that you read the terms and conditions that come with your card and ask any questions ahead of time before you really jump in.
When you are approved for a secured credit card, your work isn’t done yet. The first temptation that you will have is to just up and spend everything on the card, and then pay it all off. However, this is not what you want to do. The assumption here is that you have already made sure that the secured card in question will be reporting to the three credit bureaus. From there, you will want to make a few small purchases here and there in order to show that you’re using the card. However, you don’t want to get right up on the limit — this will only show the card company that you still cannot be trusted to handle credit wisely. Make sure that you pay off everything that you spend and think of it like a marathon — not a sprint. There’s really no need to rush!