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View Full Version : Will a secured credit card build credit as well as an unsecured one


Wesley Clark
10-03-2005, 10:17 PM
I only have some credit, but what I have is reasonably good (no late bills, paid of credit cards, etc). So I want to get a couple of cards and pay them off each month to establish more credit.

Is getting and using an unsecured card going to have the same effects on my credit rating as a secured card?

cat39645
10-03-2005, 11:44 PM
I was wondering the same thing because I have a secured card. Dou you build more credit with a secured or non secured? It also says on my card that it expires in a year...what am I supposed to do then? Do I apply for another or am I supposed to keep this secured?

snailboy
10-03-2005, 11:50 PM
What's the difference between a secured and unsecured credit card?

Wesley Clark
10-04-2005, 12:10 AM
What's the difference between a secured and unsecured credit card?

Secured cards are for people with no/bad credit. You'll get a credit card with maybe a $500 limit but before you get the card you have to give the company a security deposit of $500. In case you default on your credit card bills or declare bankruptcy the company just takes your $500 and runs.

An unsecured card doesn't have any kind of deposit. So if you get an unsecured card with a $10,000 limit and spend all $10,000, then declare bankruptcy the credit card company is out of luck. With secured cards the company has little risk because they.

What stinks is some secured credit cards are total rip offs. They have various annual fees, no rewards programs and APRs in the 20% ranges. All for what is technically a risk free moneylending venture since they have access to your security deposit.

Wesley Clark
10-04-2005, 12:14 AM
An unsecured card doesn't have any kind of deposit. So if you get an unsecured card with a $10,000 limit and spend all $10,000, then declare bankruptcy the credit card company is out of luck. With secured cards the company has little risk because they.



Damn lack of proofreading.

With secured cards the company has little risk because they can always take money out of the security deposit in case you default on your credit card.

Mr2001
10-04-2005, 03:43 AM
Is getting and using an unsecured card going to have the same effects on my credit rating as a secured card?
My first CC was a secured card, and I believe it did help build my credit rating. I don't know if it'll have the same effect as an unsecured card, but I wouldn't be surprised. They're looking at whether you can be trusted to pay your bills on time and not use all your credit at once.

It also says on my card that it expires in a year...what am I supposed to do then? Do I apply for another or am I supposed to keep this secured?
They'll probably just send you a new card the month before that one expires. If your credit is in better shape by then, you might be able to convert it to an unsecured card, or just close it and get an unsecured card from someone else. Don't keep the secured card longer than you have to - the only reason to use one instead of a debit card, AFAICT, is to build your credit rating.

Ottoerotic
10-04-2005, 02:48 PM
If a secured card helps you get an unsecured card, then yes it helps you build credit. But eventually you're going to need to get a loan without having the cash to secure it, and it looks better if you've had unsecured credit in the past.

I don't think it effects your credit score, but I look at credit reports all day long, and I prefer seeing unsecured credit over anything else (except perhaps a mortgage). You could go and get gas cards and clothing store cards, but that doesn't really tell us much about your credit worthiness because if you can fog a mirror you can get one of those.

So get whatever unsecured credit card you can, even if the interest rate is 25%. Use it once a year and pay it, and it will open the door to unsecured cards with better interest rates.

Let me know if you want specific names of card issuers or other strategies for getting the unsecured credit.

diku
10-04-2005, 04:13 PM
When my credit was way less than perfect, I started with a $250 secured card. Kept it paid every month, and they extended my unsecured credit on top of the $250 amount.

Really helped to rebuild my credit.

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