Secured Credit Card Application and Use

From paying for a vacation to concluding business-to-business deals, credit cards are fast becoming the #1 way to pay for goods and services around the world. The use of them in today's society is greater than at any time in our past - a fact borne out by the £34 billion of debt currently accrued on credit cards…and that's just in the UK! In fact, so extensive is our use of credit cards in this day and age that not having any can severely disadvantage us when we're out and about.

Take paying for fuel at a petrol station for instance. Unless you carry the right amount of cash in your back pocket or you've remembered to take your chequebook, not having credit cards could seriously inconvenience you! As for shopping online - well, what can you say! Credit cards are the dominant form of payment on the Internet. Some businesses in fact will only accept payment by credit cards, leaving you in the lurch if you don't have any cards in your name.

Joining the credit cards revolution though can be a problem for people with an adverse credit history. Mainstream credit cards companies often shun credit cards applications from people who they consider to fall below their credit cards lending criteria. Excluded by the credit cards companies are applicants who are deemed to be 'high risk'. Card applicants with CCJs, mortgage arrears or defaulted payments on other credit cards fall into this category. Many companies also refuse to grant standard cards to people who simply have no verifiable credit history at all.

But, it's not all doom and gloom. Fortunately, there are now credit card companies who specialise in offering these to people who have a poor credit history.

Information on secure credit cards

Secure cards are designed for people with a poor credit rating. Similar in appearance and function to mainstream credit cards, secure credit cards require users to place a security deposit on their account to activate them. Deposits typically range between £50 and £250. The actual amount of deposit to be placed on the secure credit cards is dependent upon the assessment by the company of the applicant's credit history and ability to pay.

Once they are activated, they can be used just like ordinary credit cards. The only differences tend to be that the credit limit on secure credit cards is lower, and the APR on monthly balances carried forward are higher. Credit cards users can even withdraw cash from ATMs with their secure cards.

Secure credit cards and the road back to a good credit rating

Secure credit cards, if used wisely, can help repair an applicant's credit history. If consumers can put a faultless run of on-time repayments together for the card company, within a year or two secure credit cards users could be back to the point where they are considered 'mainstream' again by other credit cards companies. Of course, much depends on the current credit position of those who use secure credit cards. The worse the starting point is for holders of secure credit cards then the longer it takes for them to see the repair benefits. Sometimes, it is a long road back.