Researching secured credit card? Duane here with hHow To Build Credit TV and in
this video I'm gonna expose 5 things you need to know when considering a secured credit card
but before we get started I have a quick message
once again my name is Duane with how to build credit TV this channel offers
100% free information about how to build credit, how to get cash back actual cash
money from using credit cards as well as credit card reviews. So this sounds like
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notification bell so you don't miss a thing. Alright let's get started. Alright
so as you can see right now I'm holding three credit cards. Actually these 3
cards are secured credit cards two of which I use currently I do not use the
capital one at the moment. But by looking at it you would have no idea that this
is a secured credit card so with that being said everything that I talk about
in this video is actually from my own experiences in regards to secured credit
cards. The first thing you need to know when considering a secured credit card
is what is a secured credit card and does it help your credit score? A secured
credit card is when you actually have to put collateral up front and give to the
bank in order to get your credit card. In most cases it works this way
whatever you deposit will be your credit limit so most cards start around $200
and goes up to $10,000. But in most cases it's from $200 to $2,500. So that means
if you wanted a $1,000 credit limit you would give the bank one
$1,000 and your credit limit will be $1,000. Now they
hold onto that money for a period of time depending on who you get the credit
card with it's anywhere from 8 months to 18 months with Discover
Card if you get their secured card it's actually 8 months and after 8
months they review your account and if you're counseling Good Standing then you
graduate to the unsecured card. Speaking of graduation to the unsecured card, not
all secured card has that type of deal. For example Wells Fargo you can have a
Wells Fargo card for a year and still not be graduated to an unsecured credit
card. As a matter of fact when you have the Wells Fargo secured card when it's
time to graduate to the next card you actually have to close your secure card
account and open another account. And that's not good actually because you're
going to be losing all that credit history
that you already established with Wells Fargo for that entire year. That's why
it's important to choose your secured credit card wisely now as far as does a
secured credit card help you build credit. Absolutely a secured credit card
reports to the three major credit bureaus just like any other credit card
and if you continue to pay your bills on time and continue to you know follow
what you need to do as far as being in control of your credit card you'll be
fine and you'll be building credit so it absolutely will help build your
credit score. The second thing you need to know when considering a secured
credit card is is there an annual fee. Now some secured credit cards you can
absolutely get for free for example the Discover secured card is free there is
no annual fee I actually like that one a lot because it actually offers the
ability to earn rewards and not all secured cards you can earn cashback. So
that one is my favorite personally it's been really good to me.
Some other secured credit cards such as Wells Fargo there is an annual fee I
think Wells Fargo's annual fee is $25 buck. The Citibank secured credit card
that's absolutely free no annual fees at all but it does not offer any kind of
rewards or cash back. Which is not a deal-breaker I mean the purpose of
getting the secured card is just to kind of build up your credit but the way I
use them I actually use the secured cards as if they're real credit cards.
For example my Discover card my credit limit on that card is $2,500. So
initially when I started off I deposited I think it was $1,200 and after a couple
of billing cycles you can actually increase your credit limit by increments
of $100 and so what I did was I started at $1,200 and then I just went ahead and
maxed it out at $2,500 with the Discover card because that's the max limit that I
can deposit in order to get my limit to $2,500. So I actually just used my
Discover Card like a regular card and that's actually my favorite secured card
because it offers major benefits in regards to cash back. The third thing you
need to consider in regards to a secured credit card is does it have
kind of graduation or promotion to the unsecured credit card. So I alluded to
this earlier the Discover card absolutely has a graduation, the Citibank
card does the Citibank card actually I'm not sure what the all the details are
about that one but I know that they could actually hold your money for up to
18 months as collateral. So the reason why they want to hold your money is
number one the bank doesn't trust you and so if you default on paying your
credit card bills they could just use your collateral to take care of your
bill. So it's actually kind of weird that you would do that because you're paying
them money up front to get the credit card and so you would think that you'd
be responsible but there are some people out there that just don't get it and so
that's why they hold on to your money. So it's important for you to do all your
research upfront before you decide to get involved with a particular secured
credit card. Make sure you do all the reading that is out there on that
particular card call them if you need to and ask questions if you know you're not
sure. As a matter of fact if you have questions you can leave them in a
comment below and I'll get back to you as soon as I can because I'm pretty
well-versed as far as secured credit cards are concerned. They've helped me a
lot in my journey to rebuild my credit score. The fourth thing to consider in
regards to a secured credit card is customer service. How is their customer
service and what's their reputation? For example, we all know names like Capital
One, we know names like Discover Card those are easy we know Bank of America
we know Wells Fargo. All these banks offer secured credit card and to some
extent if you watch television or if you've been alive for a while we're sort
of familiar with these brands and we kind of know what they're about so
customer service is very important you definitely don't want to get involved
with a bank that you don't know or that may not have commercials on TV. That's
probably not the best way to judge but at the same time if the bank that you're
getting involved with for a secured credit card has no commercials on TV it's
some Bank you've never heard of chances are the customer service may not
be as good as you want it to be. So customer service is very
in regards to a secured credit card because you want to pick up the phone
and make sure you can get answers regarding any questions that you may
have about your credit card account. And the 5th and last thing to consider in
regard to a secured credit card is. Does it offer any kind of reward and when I
say reward I mean is there a cash back is there something that you can redeem
for using that credit card. Now that's not necessarily a deal-breaker but for
me personally the nerd in me wants to make sure that I get a card that kind of
you know benefits me. Not just that the fact that it's a secured card but
there's also some benefits to it. So I know personally because I feel like this
whole video is a plug for Discover card but the Discover card has been really
good to me I mean their cash back is pretty awesome for the secure card it's
2% on gas and dining and 1% on everything else. But my own personal
story in regard to the Discover card. I got that card and I think October
September of 2017 and I saw their match their cashback
match program the commercials on TV and I thought that I had that exact card you
know I was like okay cool I'm gonna get 5% back on this category and at the time
I was thinking about Amazon and Target. Because the last quarter of 2017 was 5%
back on Amazon purchases and target purchases. So man I racked up a lot of
purchases with Amazon and Target thinking that I'm gonna get 5% back and
so sure enough I contacted customer service and when I contacted them they
said actually sir the card that you have is 2% on gas and dining and 1% on
everything else. Man I was upset I was like well I really
thought I had the card that I saw on the TV because I was doing all these
purchases with Amazon and Target thinking that I was going to get 5% cash
back. And this is where customer service comes in would you believe it that they
actually honored all my purchases with Target and Amazon. They act actually
switched my card from what it was to the 5 % cash back which I didn't
even know that there was a difference. But they
it's the card and they actually credited my account I think it was like $60 worth
of cash back for that particular period which was the last quarter in 2017. So
customer service is very important and Discover Card is really good in that
regard. So just a quick recap when considering a secured credit card a
couple of things you need to think about is, do they have an annual fee. Does that
particular card have an annual fee. The next thing that you need to think about
is does that card have a graduation or promotion time period. In other words
when you can step up to the unsecured credit card and then another thing to
think about is the customer service. How is the customer service? So these are
things that you should think about in regards to a secured credit card. Thank
you for watching this video please comment, subscribe and like this video
and as always Knowledge is Power, so do your research until next time take care
and be blessed peace!