If you’ve never had a credit card in the past, here’s what you need to know about securing the best starter cards.
Best Starter Credit Cards
Being based on the word of mouth of the holder the secured credit card enables the cardholder to pay for the various goods and services required by him/her. Basically a line of credit is granted to the holder of the secured credit card thus creating a revolving account in the process, we can also say that a cash advance is given to the user which means the user is allowed to borrow money from the lender which is seen by most.
The most relevant question related to the use of secured credit cards that comes to everyone’s mind is that how exactly a user can benefit from the use of such a card. The answer is simple, it help build one’s credit that do not have a credit history. In other words we can say that for people who have a bad line of credit or even no credit history, this cards can help them bring their scores up and in the process build a good credit.
The process of how this works is simple. While applying for a secured credit card you are giving a saving deposit to the lender who is issuing you the card as collateral for the card. If you pay the lender say $500 then you will get a $500 credit limit. The lender will hold on to that deposit for a given period of time and if you make all your payment in time for that given period and hence proving your worthiness, then they will release and give back that savings deposit to you.
While in the process on building your credit the important thing to keep in mind is that the same credit card will start reporting to other credit bureaus. So basically it helps to ultimately build your score back up provided you make all your payments on time for a fixed period of time and soon other credit card companies will start contacting you for your business.
So in conclusion a secured credit card is the best starter credit card in building and helping the consumers that have suffered problems in the past get their credit scores and credit bureaus back on track. Thus in this way, a secured credit cards helps in establishing loyalty and credibility and help the user of those cards in building a good credit history and benefit in the long run.