Secured Credit Card Application

The certificate of deposit with your funds in it usually lasts 12 to 18 months, also depending on the credit card issuer. During the time while the money is in the certificate of deposit, you'll be earning simple interest on that money. Say you do in fact put $500 up as collateral and your interest rate on that $500 is 4.00%, you'd earn approximately $20 in a 12 month period. Not a lot, but it could buy you some fast food.

What happens if I decide to close the account after 6 months and the term is 12 months? If you choose to close the credit card account earlier than the term of your certificate of deposit, you may be charged penalties. Some banks charge as much as 1 months interest on your certificate of deposit, others may charge more or less. Before completing a secured credit card application, you'll want to know all the details of both the credit card and certificate of deposit. Check the rate of interest on the certificate of deposit, your account closure penalties, and specifically how you get the money back once the term is completed.

How will I get my money back? When the term of your certificate of deposit is completed, you have some options. Your credit card issuer may choose to change your account to an unsecured credit card, if the account history was excellent, therefore returning your collateral plus interest. A second possibility is that the account may not qualify to become unsecured. In that situation, you will have the option to close the account and receive the collateral back, or leave the funds in the certificate of deposit and continue with the credit card account secured.

When a secured credit card is canceled or the CD expires, your collateral will in most cases be applied to your credit card balance, if you have a balance at the time. If you have no balance, the CD may create a credit balance on the credit card, in which case a refund check can be requested by you. And there you have, all the basic information you need about secured credit cards. Find the secured credit card applications that are available for you through HSBC Bank NA, New Millenium Bank, Applied Bank, and more.

I was 18 when I got my first credit card and it was a secured credit card. It helped me to build my credit since I had none at the time. I hope one of these secured credit cards can do the same for you!