What is a Secured Credit Card?

14 Oct What is a Secured Credit Card?

It is a credit card that you have pledged collateral against in the event you do not repay the debt. Most credit card obligations are unsecured meaning you have not put up any property or funds that the creditor can take for repayment of the debt. Some credit card issuers have programs where the credit card debt is secured by a deposit account (bank account). The risk to the credit card issuer is reduced because the debt is fully secured by the deposit account. Many people use secured credit cards to help in rebuilding their credit after a bankruptcy. However, you need to thoroughly investigate the program use choose and compare it to other programs.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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