Do secured credit cards actually help your credit history?

Question

Since you are putting the money in an account prior to charging anything on the card, how does this build credit? It's basically a no interest savings account with a debit card.

Answer 1

YES... a secured credit card will help build your credit history. Of course, you have to use it responsibly and make regular, on-time payments. Even though you're basically spending your own money, all the activity is reported to the credit bureaus as if it was a standard credit card.

Here's a list of several secured credit cards you can choose from: http://www.asapcreditcard.com/secured-of...

Hope this helps. GOOD LUCK!

Answer 2

If you have bad credit or no credit history, a secured credit card may be all that financial institutions are willing to offer you.  Yes, it is essentially a savings account with a debit card, but you repay it like a credit card.  If you use it and "pay it off" regularly, the issuer in many cases will extend a larger line of credit, and based on the terms of your card, will eventually convert your initial secured payment into a direct payment onto the credit card, or a check which refunds your money to you.

Think of it like credit card "training wheels," where you demonstrate that you can responsibly use a line of credit, one that has a safety net designed to protect the card issuer.

Answer 3

Yes, but you most make sure your payments are being reported to the credit bureaus. After you have had the card for three months, check your credit report to make sure. There are some secured credit cards offered at the site below and I'm sure at least one states it reports to all 3 credit bureaus. Good luck