Getting your first credit card can be frustrating.
You may have found that creditors refuse to issue you a credit card because you have no credit history. And you may wonder how you’re going to build a credit history if no one will give you a credit card. You probably feel like you’re a great candidate for a credit card – you’ve been dutifully paying your rent, utility and phone bills, insurance, and medical costs on time without fail for years. But unfortunately, paying bills doesn’t do a thing for your credit. In order to build your credit history, you must pay back a loan, such as a mortgage, auto loan, student loan, or a credit card. Well, there is a great option for new borrowers to build their credit and utilize the convenience of having a credit card – the secured credit card.
The secured credit card works just like any other credit card, and it builds your credit history just like any other credit card. The creditor is willing to extend credit to the new borrower because they have the security deposit in case the borrower defaults. And the borrower gets a chance to build their credit history while enjoying the benefits of a credit card, and has some savings earning interest in the creditor’s bank for a period of time.
The secured credit card is a win-win situation for the creditor and for the responsible borrower.
