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Secured Credit Cards are perhaps the best type of cards for those with no credit or poor credit
If you have bad credit or need to establish a credit history, secured credit cards are probably the best credit cards to get because you are very likely to get approval and most report your payments to the three major credit bureaus.
Difference between secured and unsecured credit card
For a secured credit card, you have to deposit a certain amount of money (usually between $250-$15,000) with the bank issuing the secured credit card. The bank will normally extend a credit of anywhere between 50% to 100% of the deposit amount. Most banks will pay an interest on the deposit. This deposit acts as a collateral for your
secured credit card bills.
Compared to sub-prime unsecured credit cards, annual fees tend to be lower for secured credit cards. Once you have build up a good credit history, banks will start offering you unsecured credit cards.
When choosing a secured credit card, keep the following things in mind
1. make sure the secured credit cards report to the 3 main credit bureaus.
2. Make sure you get a secured credit card from a major bank as you want to be able to upgrade to a no annual fee credit card once your credit history improves.
Lastly, remember that only time and careful spending will repair your credit history.
Recommended Secured Credit Cards
We recommend the Orchard Bank Secured Mastercard® because of the following reasons. Firstly, it is issued by HSBC Bank, which is one of the world's largest and most reputable bank. The annual fee ranges from $0 to $48, which is very reasonable and it has no costly application fees. Once you show a regular habit of paying your bills on time, you should get offers from HSBC's unsecured credit card.
If your credit is better than expected, you may even get approved for their unsecured credit card. Read our review of the Orchard Bank Secured Mastercard.
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