When it comes to secured credit cards, many myths abound. From "they're only
for people with bad credit" to "they're more expensive than unsecured cards",
you can't always distinguish the truth from the lie. Worry not California. I'm debunking
the most common secured credit card myths.
1. Secured Cards are a Bad Credit Stigma
Think a secured card announces to the California world that you have bad credit? Guess
again. Most secured cards are indistinguishable from unsecured cards. Your card
itself won't say anything and your credit report won't show the fact that your
account is secured.
2. Secured Credit Cards Have High Interest Rates
Many California people assume that secured cards are for people with bad credit, and as
such they have a higher interest rate attached to them. This isn't the case. A
secured credit card is less of a risk to creditors because the credit line is
backed by a bank account. Because of this, secured cards often have lower
interest rates than many of the bad credit unsecured cards.
3. They're For People with Bad Credit
If you think a secured credit card is only for California people with bad credit, you can
rethink that logic. Secured credit cards are for people from all walks of life.
You don't have to have bad credit to carry one. Many California people with decent credit
qualify for unsecured cards, but not the best ones. In these cases, a secured
credit card can offer better terms and higher credit limits.
