Three Myths Related to Secured Credit Cards Ought to Dispel
There arise certain cases in which you may or may not qualify for a regular credit card. You may already know how important your credit card history is and how a bad credit rating does affect many of your financial procedures. However, adding to that, in case you have a bad credit rating, ultimately, you are not eligible for a traditional credit card, since you have to improve the credit rating first, anyhow.
Another situation in which you may not qualify for a traditional credit card is- you are a fresher. Freshers are those people who’ve never had a credit. Therefore, reaching out this blog clearly lists you in one of these. Because, in that case a secured credit card is a worth-it alternative you are left with.
Notably, even though, a secured credit card may be the only way to establish or re-establish credit, there are a bunch of myths ought to dispel-
Myth #1: There is No Difference between Prepaid Cards and Secured Credit Cards
Most of the people confuse them to be the same. While a prepaid card needs money to be added on to it, then spending it as you may need, followed by reloading it once you are done spending the money, on the other hand, a secured credit card requires a deposit. The deposit works as a collateral in an event you may not be able to make your payments. Therefore, prepaid cards make you spend the money that you actually possess, but a secured credit card makes you use credit to make purchases.
Myth #2 Secured Credit Cards Do Not Actually Help in Increasing Your Credit Worthiness
Factually, secured credit cards are one of the best alternatives when you are willing to improve your credit ratings or build a credit history. For a fact, secured credit cards require a deposit. Therefore, if you have one, it makes it excessively easier to get a secured credit card. Nevertheless, you hold equal responsibility as you hold to the traditional one.
Myth #3 Secured Credit Cards are Not Offered by Reputable Lenders
A myth. As mentioned earlier, a secured credit card needs an equal attention and responsibility as the traditional credit card needs. So, why would no reputable lender such as a big name bank or a credit card company would not offer a secured credit card? It’s just that secured credit cards are another form of credit, a financial tool. If any big name bank or a company is not offering such cards, there is no apparent reason or hidden reason. It completely depends upon their choice.
Do not forget that no secured credit card is meant to have high interest rates. Neither having a secured card makes it a trouble for you to have a traditional one. However, secured credit cards are not meant only for people with bad credit rating, these are actually a great way to improve it. Always choose wisely!