Secured credit cards: Get beyond these Top 5 myths

Often derided as tools for consumers with horrible credit, secured credit cards can be a great credit-building tool. Here are five myths debunked to help you understand how to use secured credit cards to maximum advantage. 

3. Myth: They are issued by predatory lenders

Stelios Varias/Reuters/File
Credit cards are pictured in a wallet in Washington. Secured credit cards typically offer reasonable annual fees and interest rates.

Like unsecured cards, most secured cards are not issued by predatory lenders – and you can typically expect a reasonable annual fee and interest rate. For example, the United Services Automobile Association (USAA) secured card offers a 9.9 percent rate and only a $35 annual fee. The First Progress Platinum Elite Secured Credit Card has no annual fee and a 19.99 percent interest rate. If you don’t plan to carry a balance, then you can avoid annual fees with the latter. If you are going to carry a balance, choose the card with the lower interest rate.

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