You can get a secured credit card by going to your bank or credit union and asking for an application, or by applying for a secured card online. Not all banks and credit unions offer secured credit cards, so it’s best to take a look at the secured card offerings that are available online. That way, you can compare cards and apply for one that’s right for your situation. Annual fees, deposit amounts, rewards and interest rates vary from card to card, so it’s important to shop around to get the best deal.
Here’s how to get a secured credit card:
Compare secured credit cards to find the right card for you. Lots of people focus on the minimum deposit amount when it comes to secured cards, but the deposit is refundable. It’s smart to consider annual fees, which aren’t refundable. Look for the handful of secured cards that have no annual fee.
Fill out an application. You need to be at least 18 years old and have a Social Security number, an ITIN or a passport, along with a non-P.O. Box U.S. address. In addition, most secured credit card applications require you to choose your deposit amount, which will usually become your credit line. How and when you pay your deposit will depend on the card issuer. When you apply, you should be prepared to provide your bank account information or open a savings account with the card issuer to pay the deposit, but some card issuers let you pay the deposit later.
Wait for a decision. Credit card applications are often processed instantly. But if not, many card issuers have a website or phone number to check your application status.
Wait for your credit card in the mail. After you pay your deposit, your card will be mailed to you. This could take anywhere from a few days to a few weeks.
When applying for any credit card, there can be some worry that your application will be denied. Because secured credit cards are designed for people with bad or no credit history, secured card applicants have the least to worry about in this regard. That doesn’t mean there are no requirements, however.
In addition to placing a security deposit of $49-$300, secured credit card applicants are required by law to submit certain information for identity and income verification purposes. Many individual issuers have instituted their own secured credit card requirements as well.
Altogether, three types of information may be evaluated after you apply:
Basic Information: All issuers require applicants to provide their name, contact info (including a non-P.O. Box U.S. address), Social Security number, and all other basic information requested on the account application.
Income Information: All issuers require applicants to list their income in order to determine whether or not they can afford minimum payments on a new credit card.
Credit Data: Certain issuers will not approve applicants who are delinquent on other credit card and loan accounts and/or applicants who have recent bankruptcies on their credit reports.
Overall, it’s much easier to get a secured credit card than an unsecured one. Due to the required security deposit, the card issuer’s risk is little to none, so many people with damaged or no credit can get a secured card. And they report to credit bureaus just like an unsecured card does, so you build credit in the process. If you use the card responsibly by paying your bill on time and maintaining low credit utilization, your credit standing will gradually go up, along with your chances of getting approved for an unsecured credit card.
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