Getting a secured credit card with bad credit is easy, because this is exactly why secured credit cards exist. If you have no or poor credit you can still quality for a secured credit card and credit cards are one of the best ways to build your credit back up. However, there are some things to consider when choosing a secured credit card company. We’ll go over some ways that you can protect yourself when getting a secured credit card, as well as how the whole process exactly works and how much you should put down as a deposit for them. Also, there are a few fees involved and we’ll go over which ones are common and which are too much.

When applying for a secured credit card bad credit is rarely a factor. You’ll be depositing money with the company issuing the card so they have a guarantee against nonpayment. A more common factor that they look at is your income. Can your income support credit card payments, even with interest and possible penalties? If you have a decent income then you’ll likely have more success. However, some companies have no restrictions on who they give the car to whatsoever. In essence, they will issue a card to anyone that puts down the deposit.

A secured credit card for bad credit can do wonders for your credit score. But you’ll want to make sure that you choose a company that is reporting as a regular credit card. If you make regular payments but the card reports to the bureaus as a secured credit card, this is not very impressive to future creditors. If you have money at stake then you really have an incentive to pay. A company that reports as a regular credit card will do much more to improve your credit score and get your approval for future credit then one that is obviously a secured card.

Another thing to consider is how many credit bureaus that they report to. You’ll want to try to find one that reports to all three but this may be difficult. Many only report to one or two. This is okay, but keep in mind that if you apply for credit in a few months and they pull from a bureau that the secured card was not reported to, then the good payments you made will not factor into their decision. Also, try to find a company that reports monthly so that you can improve your credit score as soon as possible. Some report every three months and this is alright as well, but reporting annually won’t help you until a year has passed.

Many secured credit card companies charge fees, and some are just outrageous. Paying a fee of around fifty dollars is perfectly okay, often called a program fee or enrollment fee, but having to pay several hundred dollars to get into their “program” is simply not worth it. Also, there may be an annual fee of around the same amount. This is also fine, as it is a common practice even in the regular credit card industry. Just make sure that these fees aren’t ridiculous and that there aren’t any hidden costs or surprises. Read the application and agreement carefully.

I have a lot of personal experience with secured cards and wanted to give some advice. There are some freaking terrible secured cards out there in fact a few of them have insane fees. I personally used one that had crazy fees and honestly it wasn’t worth it. I also used a really great one that I would recommend to anyone. That card was a crucial step in improving my credit score from under 500 to 770.

The Winner

The best secured credit card I used was the Orchard Bank Secured Mastercard. It was the best deal I found and they were pretty cool to work with. Here are some of the details of the card:

• $200 Security Deposit
• No Annual Fee For The First Year ($35 per year after that)
• Reasonable Fees ($35 over-limit fee, etc.)

If you compare that to some of the other cards I’ve used it’s simply amazing. One of the cards I used had a $48 annual fee, a $97 processing fee, a minimum deposit of $300, and a $8 per month participation fee.