An 18-year-old asks if a secured card is an option under the Credit CARD Act rules.- Bankrate.com via Yahoo! Finance
A secured credit card is a card that you deposit money to before using it. In essence, it’s not a credit card but more like a debit card. However, because of it’s affiliation to the credit card companies it could be the best option for those who have destroyed their credit card score.
Most companies offer high interest rates for these cards (yes, interest still applies) and a waiver on the application fee, but be sure to inspect the terms of agreement closely. If used properly, people can re-establish their credit scores. Buy little items and make sure to pay them back at the end of the month. But they shouldn’t be used longer than necessary.
Be wary of the secured credit card plans that insist you purchase insurance.