The Secured Visa credit card has been established to meet the needs of those clients that have a bad credit history. This essentially is used to help the clients to improve on their credit status in order to have a good performance. The first thing that is required before one can be handed over his/her card, he/she has to first have the cash as the collateral. With time, the Secured Visa credit card will be transferred into an unsecured card provided that good performance has been reported.
In general, this credit card is used in restoring the credit of a customer from a bad history to a good one. This article will highlight the conditions that are to be met before one can be given the Secured Visa credit card.
Conditions for the Secured Visa credit card
Once one has opened an account for the Secured Visa credit card, he/she is demanded to ensure that he/she makes a cash deposit. With the help of the issuer, the cash will be deposited into the savings account in one’s name. This is done in order to restrict the cardholder from accessing the funds in the savings account. These funds can only be accessed the moment the card has been closed. The amount of cash that is deposited into the savings account must either be equal or exceed the line amount of the credit card.
The good thing with the Secured Visa credit card is that lower interest rates are charged as opposed to the unsecured card. The savings accounts are used in paying nominal interests and this can be used in settling the debt.
The steps on how to apply for the card
The first thing that has to be done is to visit the local bank and seek the help of the account representative. This can be a guideline on how to connect the Secured Visa credit card with the savings account that one has already opened. It is advisable to always go through the terms and conditions before going ahead to apply for this visa credit card. In order to open this card, one has to make a cash deposit that has to be either equal or exceeds the line amount of the credit card. This is because the more money on deposits into his/her savings account, the more credit can be charged.
It is advisable for one to apply for a secured credit card that does not demand for further application, such as credit insurance policy.
Where and when to use the card
The Secured Visa credit card can be used for any legal purposes, such as the online payments, over-the-phone payments and much more. There are limits on the purchases that one makes using the card, but once this happens there is a penalty fee charged. In addition to the penalty fee, one also has to pay a higher interest rate. The last thing to keep in mind is that one should not keep this card for so long in that one has to develop it into an unsecured credit card.