¿Qué es una tarjeta de crédito asegurada?

You’ve heard a lot of terms when it comes to credit and personal finance and not all of them are self-explanatory. Like the term ‘secured credit card’, what are those?

If you are trying to establish credit or trying to rebuild your credit a secured credit card is something you should be aware of. So what does that mean exactly?

What is A Secured Credit Card?

A secured credit card is a card in which you make a deposit equal to your credit limit. Say you pay a $500 deposit, you now have a $500 spending limit on that card. It has a function similar to loading up a cash card but counts towards building your credit.

A secured card is great for people who have no credit or very bad credit and are tying to build up their reputation. Because you pay before you spend there is significantly less risk to the creditor so they will do business with anyone regardless of their history.

After using that secured card for a time you will see an increase in your credit score and positive activity in your credit history, which will make it easier to apply for an unsecured card or loan in the future.

Why Use One?

If you have poor credit it might be a better idea to use a secured card than an unsecured one even if you can qualify for one. This is because you run the risk of huge fees and interest rates because of a low credit score. You are much better off avoiding that extra charge and working to build your credit score to get a more reasonable rate.

Some companies that offer secured cards also offer unsecured cards so you can transition easily to that next step when you are ready.

¡Cada situación es única! Estamos aquí para ayudarte a reconstruir y entender tu crédito. Llámenos para empezar o para saber más sobre lo que podemos hacer por usted 1-800-431-0449.