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How Much Will a Secured Credit Card Boost My Credit Score?

If you have recently checked your credit report and find that there are charges you either cannot afford to pay off right now or are unable to dispute, you may still have bad credit. If that’s the case, then you might be thinking about getting a secured credit card to boost your credit score. There are some good choices and bad choices in the secured credit card business. Knowing the rules of the game before you commit to one is definitely worth your while.

There are a lot of scam credit cards out there, especially “unsecured” credit cards that not only charge exorbitant interest rates, but have hidden, ridiculous charges. For example, you might find a credit card with a $1000 limit, but they require a $250 “initiation fee” and charge monthly up to $50, and carry an annual fee of perhaps $200. This is on TOP of a “registration fee” of perhaps hundreds of dollars. Not such a bargain, right?

A better choice for you to boost your credit score might be a secured credit card. In this case, “secured” means you put down your own money in deposit, using the credit card as needed and paying back the credit card company on time, and with an interest charge built in. Secured credit cards use your own money in the form of a Visa or MasterCard payment, with you paying back the deposit amount in full at the end of every monthly billing cycle, just like a “real” credit card.

There might also be a small annual fee, and a small fee for initiating the credit card, but nothing like the outrageous amounts charged by less trustworthy credit card companies. Look for a major credit card company first, and if you can’t get one from them, then move to someone a little less well known. Just remember that what you’re doing is trying to establish to future creditors that you’re a good investment, so the bigger the credit card company now, the more impressed creditors will be later. The purpose is to establish that you are able to maintain a credit line with timely payments and do not try to overextend yourself by maintaining too many credit lines at once. A card or two at major credit card companies, where you have a deposit in place to insure the card will never be abused, and then credit issued from those companies, will go a long way to bringing your credit score back in the black.

One goal is to have your issuing credit card company offer you a card with no deposit required and with lower interest rates and annual fees. This is what people with no bad credit issues have, and what you should strive for if you want to bring your credit scores up. This will also show other potential creditors that a major credit card company trusts you, giving them confidence that you’ll pay back what you owe to them, if they decide to also offer you credit.

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