Secured credit cards such as MasterCard or Visa are excellent for building credit. The key is making sure the credit card company reports credit information to all three major credit bureaus---Equifax, TransUnion and Experian. Virtually all full-featured bank credit cards report to the agencies, but you should confirm this before investing in a secured card.
Customer Service
Contact customer service departments for several secured credit cards before opening an account. Or contact the banks directly. Ask all of the companies if they report to the major credit bureaus, and also ask about annual fees, interest rates and provisions for upgrading the card to unsecured status. Choose the secured card that suits you best based on your research. Also confirm that the card you are applying for us a full-featured bank credit card---and not a prepaid credit card. The prepaid cards are really debit cards and cannot help you build a credit history.
Savings Deposit
Secured cards require a deposit into a savings account with the money held as collateral. The amount on deposit becomes your security line, and you are not allowed to withdraw the money while the account is open. That changes if the account is upgraded to unsecured status after you establish a good payment history.
No Difference
Secured credit cards are used the same as other credit cards and no one will know that the card is secured. Your usage of the card is reported to the credit bureaus each month, making it extremely important that you never miss a payment. People with secured cards are usually trying to improve their credit scores, and consistently paying on time while keeping balances low helps.
Multiple Accounts
Open more than one secured account to build your credit even faster. Make sure the card reports to the major credit bureaus and keep balances low. After 12 to 24 months of responsible use, you may qualify for other unsecured bank cards.
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