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Secured Credit Cards With Low Credit Score: 4 Features They Must Have

Applying for secured Credit Cards with a low credit score does not mean that you must accept extremely unfavorable terms such as outrageous fees and absurdly high interest rates.

While the price of your credit is going to be higher, and while you are going to need to come up with a deposit, your secured card should, at the minimum, contain these four features:

No Application Fee

While annual fees for these types of cards are a given, try to find cards that don’t also charge you a fee just to apply for the card. More often than not, application fees are nothing more than “garbage” fees that credit card companies like to tack on get you to pay more. Unless the card has some other redeeming feature, like perhaps a rewards points system, then steer clear of cards with application fees.

Easy Approval Terms

Because your credit line is being secured by your deposit, it doesn’t make much sense for the credit card company to use your credit history at all. In many cases, your credit report will not even be run, which will save you a “hard inquiry” on your credit report which will lower your score further.

The most that the credit card company should require in order for you to be approved is that you confirm you identity and make the necessary deposit plus any fees due. Beyond that, anything else is excessive.

Decent Interest Rate

While you aren’t going to get interest rates as favorable as those with the best credit, neither should it approach 30%. Look for interest rates under 18% and minimize the effects of this by always paying off your balance in full every month.

Report To The Credit Bureaus

This next bit should really be obvious: your credit card company should report your payment history to all three credit bureaus. The only reason, aside from being able to have a credit card at all, for you to get a secured card is to build or rebuild your credit history. If the credit card company does not report to the three bureaus, then it won’t help your credit at all.

As you can see, you still have choices even when you are applying for secured Credit Cards with a low credit score. Make wise choices and within a year or two, your credit score should increase to the point where you will be paying less for your credit,whether it is on other Credit Cards or an auto loan.

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