Credit card users who want to purchase instant approval bad credit cards should consider applied bank secured credit card reviews. Because of their multiple benefits, they can develop the overall profile of the users. While purchasing credit cards for low credit, users should consider multiple things. For example, they should check if the company provides all the details to the major credit card bureaus. In case the company don’t then even if it is having the best card, the credit score won’t quickly upgrade. Thus, these things matter a lot. Now let’s see the working of secured cards in detail:
The secured credit cards for people with bad credit are approximately identical to the top unsecured credit cards for bad credit. The only difference is that applicants have to deposit a security amount called as collateral. This Security amount should be equal to the credit limit of the card. This deposit is must if any applicant wants a secured card. As this card is specially designed for people with low or bad credit, banks and companies can’t trust the customers. Thus, first, they have to look for the security of their money as the credit history of the applicants is not good. Here many cards come with a general limit. For example, the amount deposited by the applicant becomes his credit limit. These are also called as secured cards for bad credit with a dynamic credit limit.
Secured credit cards offer many benefits. The best one is that users with bad credit can easily qualify. One big difference between Secured and unsecured cards is of the interest rate. Secured cards usually have an interest rate of 24.99% (variable). In comparison to this unsecured credit cards have an interest rate of less than 24.99%. Here it can be generalised that the APR (annual percentage rate) or interest rate is inversely proportional to the credit score. This means, in case of higher credit score, user can enjoy low APR.
In case of secured credit cards, users should pay attention to quick repayments. This is because, in case of late repayments, users have to pay interest also. For example, suppose any users borrow $1,000 from the secured card. If the interest rate is 24% per annum then the user has to pay $1,020 after the due date. The interest rate per month here is 2%. In case the amount borrowed is huge then users can face difficulties in repayments.
Now let’s see how the credit score is improved.
When a user uses a card responsibly and do timely repayments. All the information is sent to credit card bureaus by the provider. Three main credit card bureaus are Equifax, Experian and TransUnion. This way the credit score is boosted quickly. By following this strategy for a few months, the user can easily switch to Unsecured cards.
Here users should also focus on the payment history. This is one of the most important factors. They should never pay the bill in half or cut-off any bill. That’s because paying the bill in parts can affect the payment abilities. Accordingly, this information can affect the credit report.
There is no doubt that secured cards are the best one. But users should not only focus on them. Their main aim should be purchasing an unsecured credit card. That’s because unsecured cards have multiple benefits. Let’s check them below:
•Lower annual percentage rate: Annual percentage rate plays a crucial role in increasing the repayments. The increase in even 1% can affect the user a lot by increasing a few dollars. The cards generally discussed in the market are unsecured credit cards. Just for general information, the national average APR of unsecured credit cards is 16.91%. Here the general APR for secured credit cards is more than 25%. Now users can see how huge the difference is.
•A thorough credit check and consistent reporting: Before the application of the applicant is accepted, the credit report is checked properly. Factors like total income, total debt, payment history are considered. In comparison to this, these factors are not given importance in secured credit cards.
Banks and companies provide all the information to the credit bureaus. In case a user is following bad payment practices then his credit score will fall drastically.
•High rewards: Due to a higher credit limit, users can enjoy more rewards. Here some of the benefits are common while most of them are card specific. For example in case the card is a travel credit card then benefits like free air miles are provided. There are also some short term and long term offers. For example 0% APR till 6 months.
