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Secured credit cards: Get beyond these Top 5 myths

Often derided as tools for consumers with horrible credit, secured credit cards can be a great credit-building tool. Here are five myths debunked to help you understand how to use secured credit cards to maximum advantage. 

5. Myth: Once a secured cardholder, always a secured cardholder

Jochen Krause/AP/File
A pile of MasterCard and Visa credit cards are displayed in Frankfurt, Germany. Using your secured credit card wisely, you can build your credit to the point where credit card companies will offer you unsecured cards.

  • By Daniel I. Tulbovich Contributor

Just because you start out with a secured card doesn’t mean all the credit cards you get in the future have to be secured. Using your secured card responsibly, paying your bill on time consistently, and keeping your debt ratio low (ensuring that you never charge or carry a balance that is more than 30 percent of your credit line) are great ways to build trust with creditors and strengthen your credit. In turn, this could lead to offers of unsecured credit cards in the mail from respectable lenders.

 

– Daniel Tulbovich is a co-founder of Credit-Land.com. He writes about credit card topics frequently.

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