Questions answered on Canadian Secured Credit Cards
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Secured credit cards in Canada were originally designed to help those people who wanted to start building their credit record, or for those you wanted to re-establish their credit after making some mistakes. And those bad credit mistakes are easy to make. So we need to be wary of our credit spending, and stay in control at all times.
However, if we haven't done a very good job of that in the past, if we've run up a large load of credit debt, then it's never too late to get a fresh start. And that's where secured credit cards come in.
If you've been in a situation where you've been denied credit, then you probably know why. Of course, there's always the possibility that you've been the victim of identity theft and it's not your fault. In any case, your credit debt has got out of control, and you need to start again.
So you save up some money and send it to the secured credit card company. You can pretty well choose your own limit, but most people start low, like $300. You can use your credit card to buy merchandise and services up to $300. When that's spent, you need to send more money, perhaps $500 this time.
As you regularly make your payments, and increase your limit, then you re-establish your solid credit record by proving that you can be financially responsible. Now the secured credit card has served its purpose and you're ready to move on to an unsecured credit card. But always remember what got you there in the first place – don't go overboard with your spending, just because you don't have to pay for it today. You eventually do have to pay for it, sooner or later!
So to recap, if you want to build your credit from scratch, or if you want to re-establish your credit, check out all the secured credit cards available. If you do a little checking on the Internet, you'll find all the reviews and ratings you need to compare what's out there, and to make an informed decision in getting the best rated secured credit cards for your situation. All the top credit card companies, including Visa, MasterCard, American Express and Discover want to help you build your credit. So check out their guaranteed credit card offers and you're on your way to building a solid credit rating.
There are other kinds of secured cards, too
Credit card companies are becoming very diverse these days, partly in competition with each other for your business, partly because they see an opportunity to make more profit. The more products they can offer you, the more chance they have of earning money. So they've introduced more types of secured credit cards.
A very useful type of secured credit card is the partially secured credit card. And it's exactly what it sounds like. Since it's not fully-secured, it's a step up from a totally-secured credit card. And that's a step in the right direction to establishing your credit.
Probably one of the most efficient uses of a credit card is business secured credit cards. These are great business tools which benefit everyone from the salesperson to the accountant. Accountants especially like them – they do half their work for them! The difference between business secured credit cards and personal secured credit cards is that the business card is issued using the company's credit rating, not the individual's. And usually, the balance is paid by direct bank payment every month, so there's no interest.
The list of advantages of the business secured credit card is indicated by the smiles on the accountants' faces. The company saves the cost of writing checks and making bank transfers. And when the monthly statements come in, the expenses are nicely itemized for their allocation purposes. Budgeting becomes much easier when all the expenses are right there in front of you. And the salespeople and business travelers like the idea of business secured credit cards, too, because they don't have to pay for their expenses out of their own pockets, and then submit expense reports and wait for a reimbursement check. It's a lot easier just to use the company's credit card.
Business secured credit cards also open up many opportunities to make purchases online, by phone, or by mail, which saves a lot of time for everyone in the company. So no matter what size your company is, or where you work in it, a business secured credit card is a useful financial tool.
Students are another group that's targeted by credit companies for secured credit cards. Because they haven't had a chance yet to establish themselves in the credit world, they're issued secured credit cards and given an opportunity to prove themselves. You have to start somewhere, and while you're learning in school, you may as well learn financial responsibility as well. Think of the alternative – finishing college with a huge debt load, seeking a student loan consolidation. Not a good way to start your business life.
Secured credit cards are diverse, versatile and convenient
If you've checked out the comparisons between the credit card companies, you'll see that secured credit cards are an important part of their financial packages. They offer them with all kinds of special deals, like low interest, just to get you started on the right foot.
So no matter where you live, whether it be Canada, the US, the UK, Australia, or anywhere else in the world, you can either establish, or re-establish, your credit rating, using this great financial tool – the secured credit card.