Do you need a secured credit card? – A secured credit card is often touted as a way to get yourself out of the bad books and in better state with your credit score and access again to regular credit cards, so if you have messed up do you need a secured credit card?
Do you need a secured credit card?
So the general set up with a secured card is that you put some cash forward, that becomes your line of credit (or at least collateral on the credit line) and after a period of good payment you may be able to add more collateral or they may give a good faith increase so you actually get some credit.
In general these cards have higher interest and almost always have yearly fees. They are not a good deal and may only really be useful for those trying to prove they are now going to be better with credit!
In general I believe the answer is no, you do not need a secured credit card. If you really screwed up your credit maybe you are not the kind of person who needs access to it ever again but of course that is easy for me to say!
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Many secured credit cards are offered by companies preying on people in bad positions and you could end up in a situation where you actually end up more in debt, especially if you end up carrying a balance month after month, a definite no no with this kind of card!
In short don’t do it unless there really is no other choice and that is really rare! Of course you may not agree with my opinion so please let me know your thoughts below in the comments.
Related: Debt consolidation: pros and cons
Thanks for reading.