Secured credit cards can help repair your credit

Trying to money without a good credit history, consumers can borrow leave caught in a vicious circle: good credit are often required to obtain loan approval, but good credit can only be achieved by - and - credit responsibility from time to time.
Enter a secured credit card. Card products offer borrowers access to credit, even if their debtors, not a good credit rating. Lenders are willing to extend loans to borrowers such as credit lines "secured" are a contribution in cash (the consumer) that the bank will be repaid even if the cardholder is guaranteed trouble. As a result, the card is guaranteed loans to borrowers who could give was rejected for a loan in the past, while simulatneously them build credit history, so it can get approved for unsecured loans in the future.
Consumer advocates say the product can be a useful tool for certain borrowers. Secured cards are a good choice for those who have trouble opening a traditional credit line, "said Gail Cunningham, vice president of public relations for the National Foundation of Credit Counseling. "Examples of secured cards for those who build credit for the first time or trying to build their credit again," he said.
Borrowers can secure the payments with a card, as it with a traditional unsecured credit card. To ensure that they build a credit history, however, must verify the borrower that they secured card issuers to all loan activity to be reported to credit bureaus. If not, use the cards and payments will not help build the credit card holder.
If get the card reported guarantees, the borrower can build a positive credit rating with the plastic with caution. What makes this option attractive secured cards. "The advantage is that you have the convenience of credit cards and create a positive credit file if you handle your duties responsibly," said Cunningham. After some time, publishers can also convert the account to an unsecured account with a higher limit secured.
This does not mean that consumers who use the card is guaranteed to meet not only to financial challenges, however. "The disadvantage is that the card sets the fees, and lines of credit may be small, because the amount of money to use, limited to open an account," says NFCC's Cunningham.
Despite these costs and small credit line secured card offers a way for consumers with bad credit or no credit score, to break the vicious circle. "Secured card is a useful tool for many people," Therefore, the said Cunningham.