Even though credit card companies make money on consumers who use them poorly, a consumer with poor credit will have a very hard time getting approved for an unsecured line of credit. One of the few ways someone with a bad credit history can improve their credit score is by signing up for a secured credit card. A secured credit card is similar to an unsecured credit card except for one key fact. Secured cards require an initial deposit. If a cardholder doesn’t make payments, the credit card issuer can simply draw from the deposit.
Unfortunately, many secured credit card include high fees and unfavorable card terms. As a result, finding a quality secured card can be difficult. This is a short list of the best secured credit cards available for consumers today from our list of credit card offers for 2012.Fees, rewards and overall usability were taken into account when organizing this list. All of the cards listed here report to the three major credit bureaus, so if used wisely they will be helpful in building or repairing your credit.
Editor’s choice
Platinum Zero® Secured Visa® Credit Card from Applied Bank®. One of the best benefits of this card is that card holders can make all purchases without paying interest. In exchange for this benefit, Applied Bank makes up for the 0% APR with a $9.95 monthly maintenance fee. The credit line on the Platinum Zero® Secured Visa® Credit Card from Applied Bank® can be anywhere between $500 and $5,000. If you need to make a cash advance, which should be avoided if at all possible with any secured credit card, the cash advance APR is 9.99% variable.
Citi® Secured MasterCard®. The Citi® Secured MasterCard® holds more brand power than any other card on this list. The card carries a low annual fee of $29. The purchase APR is high at 18.24%. For those looking for convenience, there is a snag with this card. The application cannot be completed online. It must be mailed to the company. If that doesn’t stop you from applying, the Citi® Secured MasterCard® offers the option to upgrade to an unsecured line of credit after you have established a good history with Citi’s secured credit card.
Applied Bank® Secured Visa® Gold Credit Card. The Applied Bank® Secured Visa® Gold Credit Card does not change an account set up fee or a monthly maintenance fee however they charge consumers a $50 annual fee. There is no grace period for purchases, so the interest rate will be charged the day following all purchases. This card comes with a fixed 9.99% APR and the credit limit can be between $200 and $5,000.
Capital One® Secured MasterCard® Credit Card. Similar in structure to the Citi Secured MasterCard, the Capital One® Secured MasterCard® Credit Card offers a low annual fee of $29 and a high purchase APR of 22.9% annually. Also similar is the opportunity to convert this secured card to an unsecured card after a long history of good standing with Capital One. The card allows customers to change the deposit amount or credit limit regularly.
For someone building or fixing their credit — an important factor when you need to acquire a loan or mortgage within a year or two — secured credit cards are good options when unsecured cards are unavailable for any number of reasons. The fees or high interest rates, as listed above, do not make these cards great options for everyday spending. Those who do need a secured credit cards should think about moving to unsecured credit as soon as possible, and as listed above, some of these cards make that transition process simple.
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