Secured – Credit Cards
Secured Credit Cards
First Financial is proud to provide a path for students and others with poor or no credit history to build their credit scores. Backed by the “security” or money the cardholder places in an account, the secured credit card reports regular payments to the credit bureaus, building a track record of responsible behavior. Apply here to take charge of your financial future!
Rebuild Credit & Live Better with the First Financial Secured Credit Card
A full one-third or tens of millions of Americans have “bad credit” or scores under 601.[i] The economic turmoil of the last decade coupled with the avalanche of credit offers that come in the mail set many up for borrowing more than they can afford.
It doesn’t take long to learn that many of life’s perks (home ownership, preferred employment and housing, low-interest auto loans) don’t go to those with low credit scores. Upon learning of their precarious credit situation, the boldest determine to change how lenders view them.
The secured credit card is a first step in proving your trustworthiness with money. Chances are, you landed on this page because you no longer qualify for an “unsecured” credit card. Lenders won’t pay for your purchases up front. The secured credit card, with a deposit you turn over, acts as a credit card that tracks your on-time payments and balances every month.
The secured credit card’s deposit also acts as a spending control. Banks report that when users know they risk losing their deposit if they don’t make payments, they are far more motivated to pay in full and on time.
Perks of the First Financial Secured Credit Card
Better credit is just the beginning of the benefits the secured credit card provides. With responsible card habits, users also enjoy:
- No annual fee
- 24/7 online access to the account, by phone or mobile app
- use at all vendors that accept major credit cards
- no interest charges when balance paid in full each month
- interest payments from deposit placed in interest-bearing savings account
- complementary auto insurance on car rentals put on the secured credit card
- complementary phone insurance for units charged on card
- zero-liability fraud protection
- flexibility to increase credit limit without additional deposits given responsible card use.
Did you know, too, that employers and landlords check credit history before hiring and leasing? Make sure your credit reflects you in the best way.
First Financial’s secured credit card provides the advantages that reinforce good credit habits.
How Secured Credit Cards Work
With a poor or absent track record of a consumer’s debt payment habits, banks need some incentive to extend credit. This incentive is the deposit the cardholder puts into a special savings account.
Depending on your situation, you will be asked to put a deposit amount anywhere from 20% up to 200% of the limit you want to spend. If you want a $500 limit, the bank can demand anywhere from $100 to $1,000, which remains unavailable to you. That this money is not available to spend can confuse users, but it’s the only aspect that makes the credit card possible. This deposit is the bank’s insurance. The amount remains static throughout the life of the unsecured card. It does not go up and down as the card user buys and pays it off. Instead, the user borrows the money from the bank to buy items.
This can get confusing. Card users who prefer to spend their own money (just with the convenience and safety of plastic) select prepaid debit cards LINK to that page. The user loads up the prepaid card with his or her own cash. When that balance is spent, the card is unusable until more money is loaded on.
While this option may appeal, know that those needing to build credit will get nothing from the prepaid card because the issuer does not report to the credit agency. The user is only spending down money he or she has uploaded. Credit, or buy now pay later, remains out of the transaction. Instead, when a consumer uses the prepaid card, he or she just hands over cash.
The secured card, on the other hand, works more like a traditional credit card, reporting your usage and payments to Experian, TransUnion and Equifax each month. Despite the security of the $500 or $1,000, the bank expects the cardholder to make payments on the purchases made that month. The deposit remains with the issuer in case the cardholder defaults.
Depending on which secured card you qualify for, the issuer will return your deposit after a few months or upon close of the account. Make no mistake: the ultimate goal is to close the account and move on to an unsecured or “regular” credit card. Your deposit does more work for you invested!
Steps after Your Credit Score Rises
It takes only several months to a year to improve a credit score enough and qualify for an unsecured card. As the credit score continues to improve, users get lower and lower interest rates. Given sufficient time and on-time payments, some issuers will let users transfer the secured line of credit to an unsecured one. “Converting” the style of card is better for the credit score because it doesn’t require the opening of a new account, which requires a credit check and eventual ding to the credit score.
Ideally, you’ll improve your credit enough to move to an unsecured card, at which time you can close the secured account or convert it to unsecured, and the issuer will give you back your deposit. The unsecured card may still be in the bad credit credit card classification, however. LINK to that page If so, your next step is to continually watch lower and lower interest cards with more perks. Always, transfer balances according to the best deal and your needs.
Get the Best Secured Credit Cards with First Financial!
Make the secured credit card your first step on your journey to excellent credit. It takes two minutes to apply and get the secured card on its way to you. A little attention and some dedication will soon win you the lowest interest rates on cars, homes, furniture and more.
Get your secured credit card here: