Secured credit cards: Get beyond these Top 5 myths

They are often derided as tools for consumers with horrible credit who get them at high interest rates from predatory lenders. But in the majority of cases, secured credit cards can be a great credit-building tool. The trick is to separate fact from fiction. Here we debunk five myths to help you understand how to use secured credit cards to your advantage. 

1. Myth: Secured cards are for consumers with bad credit

Mark Lennihan/AP/File
Signs for American Express, Master Card and Visa credit cards are shown on a New York store's door. Secured credit cards are not reported any differently than regular credit cards, making them an important tool for people building or rebuilding their credit.

As the name implies, the cards are guaranteed. You secure them by putting down a deposit with the lender that is equal to the credit card’s limit.  This arrangement greatly lessens the risk for lenders because, if you default, they have your deposit. So even if your credit is horrible, you can usually get a card. Secured cards are actually for all kinds of people, including those who are getting their first credit card and building credit history, as well as those who may have gone through a personal bankruptcy and are now rebuilding their credit. With the right kind of secured card you can build or rebuild your credit just as easily as you can with a traditional credit card. In fact, secured cards are not reported any differently on your credit history than regular credit cards. Creditors have no way of knowing that the card on your report is secured.

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Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

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