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Most people end up with a damaged credit when they

experience a financial difficulty. Having a damaged

credit can make it hard for you to obtain a new one.

Those credit mistakes you made in the past can be

nearly impossible to live with, especially when your

new creditors and lenders are reluctant to provide you

with a second chance. And so, in order to reestablish

your credit, but cannot obtain a credit card, you only

need to get a secured credit card.

The Secured Credit Card

The secured credit card is not that different from the

regular credit card. It operates just like the usual

credit card but it requires you, the cardholder, to

make a deposit against the credit limit of the

account. The deposit is utilized by the creditor as a

security in case you default on your payments.

Usually, secured credit cards have a credit limit of

50% to 100% of the deposit you make. For instance, if

you make a $1000 deposit for the secured credit card,

the credit limit will be between $500 and $1000.

More so, these kinds of credit cards normally have

fees that regular credit cards do not have. These fees

will include processing fees, application fees, and

annual fees. However, always be on the lookout for

those cards with high fees since they can

significantly decrease your deposit and eventually

your credit limit.

Taking Advantage of the Secured Credit

Damaged credit is the effect of having poor payment

habits, most of the time. If you cannot obtain credit

through traditional methods, secured credit can

greatly help you demonstrate improved habits in your

payments. Since you cannot prove a renewed capability

to make payments on time until obtaining a new credit

card, having a secured credit card is a big help.

However, before applying for one, you must guarantee

that the creditor reports to all the three major

bureaus for credit. Otherwise, the card would not be

beneficial in the issue of reestablishing your credit

for the reason that future creditors would not have a

process of looking at the history of your payment.

Additionally, it would not be incorporated in your

credit score or in your credit report.

If your application gets approved, always keep in mind

that your sole purpose for the card is to rebuild your

damaged credit and eventually create a positive credit

history. It is important not to use the card to incur

debt and instead, use the card to buy small things

that you can actually pay full in a month. Moreover,

it is important not to charge any item that you cannot

afford to pay on the card.

Managing your secured credit card and developing good

habits in payment can help you move into an unsecured

credit card. There are several credit card companies

that allow a consumer to convert to an unsecured

credit card after the course of one to two years of

timely payments. Even though you cannot change your

secured credit card, you can still submit an

application for an unsecured one with another company.

Remember not to repeatedly apply for credit cards

after you have been denied of an application; this

would only make you look desperate. What you can do

instead is to continue to make your payments on time

on your secured credit card and apply again after the

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