Baltimore HUD Homes Blog

If you have less than perfect credit, you may have seen ads
promising you a credit card regardless of your credit history
or job status. Most of these ads are actually for a secured
credit card, which can be a great way to rebuild your credit.
Your credit may need rebuilding if you have a history of
unpaid credit card bills, bankruptcy, repossession, or divorce.
However, you need to be aware that there are scams out there
promising a credit card for people with bad credit but not
delivering.

A Secured Credit Card

Many people do not know the difference between a secured credit
card and an unsecured card. The main difference lies in where
the money comes from when you make purchases. An unsecured
credit card is the standard card issued by most lenders. You
borrow money to pay for your products and services and then
you are allowed to pay the lender back with interest via
credit card bills. A secured credit card for people with bad
credit requires an initial deposit to set you. You deposit
anywhere from two hundred to two thousand dollars into an
account before making any purchases. What you buy is paid
for using the money in your account. So you have control of
your credit limit with how much cash you put up front.

Unfortunately, in order to open an account for a secured credit
card you must have the hundreds, or even thousands of dollars,
it takes to secure the credit. This up-front cost makes it a
prohibitive credit card for people with bad credit, who are
usually on a very strict budget as their debt takes up most
of their extra income. Along with the initial deposit, you
might have to pay application or set-up fees, and you could
be charged a fee when you make future deposits to your account
in order to raise your credit limit. These fees show up on
your credit card bills.

Credit Card Scams

There are legitimate promotions for a secured credit card out
there and you may find several on the internet if you search
reputable banking institutions for their offers. However,
some companies try to lure consumers into calling a false
number. The phone number listed in the ad is not toll- free,
but is a 900 number that you will be billed for using. The
scammers might lead you to believe that you can get the secured
credit card as soon as you call the listed number. In these
false ads, there is usually no mention of set-up fees, initial
deposit amounts, eligibility requirements, or credit card
bills, which will be larger than normal due to annual fees
and high interest.

How To Spot A Scam

If someone offers you easy credit with no qualifications to get
a credit card, this person or company is probably not telling
you the whole truth. Any reputable lender must check your
credit report before offering you a line of credit. This
precaution is especially true when providing a credit card
for people with bad credit. Also beware of calling 900 numbers.
These numbers are not set up to provide you with a service.
They are set up to make the company a profit and your phone
bill could show a charge up to $50 for a few minutes.

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