Credit Card Debt Relief Secrets

Secured Credit Card Secrets

If you're suffering from bad credit, a secured credit card may be the very best way out of your predicament.

But as always here are some secrets to help you rebuild your credit quickly and easily through the use of a secured credit card.
The first thing you must know is that whenever there are desperate people who need help, you will always have scam artists that take advantage of their eagerness.
Secret #1:
You see an attractive infomercial on TV. The guy promises that anyone who calls their special phone number is guaranteed to receive a major credit card - even people with bad credit!

Problem is - the phone number they flash on the screen is a 900 number. When you call a charge is automatically added to your phone bill. That fee could be anywhere from $50 to over $500!
Then once you've gotten through they demand that you fill out a long list of forms before they will issue your card. You quickly realize that they lied to you and you're left with that charge on your phone bill.

Secret #2:
Another scam involves offering you a non-secured major credit card. Again your bad credit rating is not a problem. Your new card has a very low credit limit - say $300. They charge you several fees including an application fee, a membership fee, an annual fee and several other processing fees. When you get your first bill you're shocked to discover that your balance is a whopping $273! The card is worthless until you've paid off all those fees (and the interest they will charge you on them).
Secret #3:
One firm offers a very attractive secured credit card but buried in the tiny print on their agreement is language that says that your $150 application fee is entirely non-refundable. You apply. You pay the up-front application fee and are then rejected. They keep your money. It's a sweet deal for them and a very bad one for you.
Secret #4:
Here are the questions to ask before you apply for a secured credit card:

1. Do you report my credit card activity to all three of the major credit reporting firms? (If not, find a different credit card)
2. What is the application fee and is it refundable? (If not, keep looking)
3. What is the interest rate on the outstanding balance? (Get as low a rate as you can find)
4. Is there an annual fee? If so how much is it. (Sadly most secured credit card firms charge an annual fee - find the lowest one you can find)
5. Is a credit check required? (If your credit rating isn't all that bad you might now care but if you suffer from bad credit you'll need to find a card that doesn't check)
6. Does my deposit earn interest? What is the interest rate? (Get the highest rate possible)
7. Are there any other fees of any kind? (If they charge strange fees - search elsewhere)
8. Do they offer toll-free 800 line customer support (Many secured credit card firms reduce customer service by having a long distance number which makes calling very expensive and difficult)
9. What is their grace period? Some cards don't even have a grace period. That means you start paying interest the moment you make a purchase! (Get the longest grace period you can)
10. Some first will require you to fill out several of their forms only to require that you come up with a co-signor before they will issue you a card. This is a bad deal. If you can't pay you will destroy a relationship that might be important to you. (Keep looking)

Secret #5:
Here's how to use your new secured credit card for maximum effect:

1. When you get your card, call their customer support number and check your credit line to be sure it's what they promised.
2. Quickly use your card to make some purchases. Don't go hog-wild, just make some buys. Run the outstanding balance up to around half to two-thirds of the maximum. Call the customer service number before each purchase. At this stage you'll want to be very careful to avoid going over your preset credit limit.
3. Make your payments as soon as you receive the bill. Be very careful to avoid making ANY late payments. Be punctual and reliable.
4. If your secured credit card is either a MasterCard or Visa - you can use it for any normal credit card purchase. But there is one exception. Some car rental firms will not allow you to rent cars from them using a secured credit card. Since a secured card is much easier to obtain (almost anyone with the deposit can get one) than a normal unsecured credit card - they're afraid you might vanish with their car.

If you follow all the advice above and make your payments on time, in six months or so you should start receiving offers for high interest rate unsecured credit cards through the mail.
Wait a month or so, review the offers your receive (one of them will probably come from your secured credit card firm) and pick the best one.
Do not submit several applications! That will damage your credit rating. Instead choose the single best offer and only apply for it.
As you make payments on time your credit rating will improve. And the new credit card offers you receive will be for lower and lower interest rates.
Congratulations - you have a good credit rating!
Anyone can use secured credit cards to rebuild their credit rating. Even those who have recently gone bankrupt can use such a card. If you have other debts, you'll have to keep their payments up also as any late payments will damage your future credit rating.

Back