Quote:
Originally Posted by Inedible
With a secured credit card for say $500 you start out with a balance of $500 due. As you pay on it, it turns into available credit. When it is paid off - they have $500 of your money to use as a security deposit - you may still have fees to pay based on the terms of your card. It really is a good way to get something positive on your credit history.
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Hmmm I think you have to deposit the $500 in the beginning and in return they give you a credit card for that amount, it's "secured" because they are guaranteed to get their $500 back because you've already deposited that amount and they can take it if you don't pay. From what I understand, the good secured cards, after 12 - 18 months of good payments, you'll be offered an unsecured card.
I plan to try to get a $300 or so card and buy small things, ($50 or so) at a time, paying it off at the end of each month entirely keeping it in good standing.
one thing I've read, is that some people will say charge something and make the minimum payment each month. I've heard that's not the way to build credit either. Paying the balance off every month is the way to go. not sure why I added this but just had me thinking...