Some Common Terms in Secured Credit Cards
Terms used in the credit card industry can be confusing, puzzling or even difficult for some to understand especially if you are not used to them. If you wish to apply for a secured credit card, it is always important to familiarise yourself with some of the most common terms used and applied throughout the period of usage because some of these terms would tell you what you are getting yourself into.
APR - One of the first things you should look out for is the APR. A shortform for the word “Annual Percentage Rate“, the APR is the rate of interests applied to your unpaid balance at the end of each month. If you pay the statement balance in full, you will escape having to pay interests based on the APR.
Credit Checks - Almost all credit companies will conduct a credit check on your when dealing with your credit card application. This is by way of checking against your credit report and determining your credit score and whether you have an adverse credit history. Secured credit cards however usually do not require such a credit check because they require you to place a sum of money as deposit (and thus the word secured is used) to show that you are credit worthy.
Credit Bureau Reporting - Applying for a secured credit card can help you to re-establish your battered credit. When your secured credit card company reports to all of the bureaus upon your application, you might be able to build your credit and thus, improve your credit position.
Credit Limit - Get to know your credit limit i.e. the maximum money you can spend on the card. It is pretty simple. If your credit card comes with a credit limit of $5,000, the maximum you can spend on that card would be $5,000. You will need to repay and reduce the amount outstanding before you can spend further.
Annual Fee - Most, if not all, secured credit cards charge an annual fee. Annual fee ranges from company to company and it would be advisable that you shop and compare for the lowest annual fee around, based on all things equal.
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