Secured Credit Card with No Annual Fee

Secured credit cards are viable options for individuals with poor credit because they allow for easy approval, regardless of your past credit history. This is because the credit account is secured by a cash deposit that is used as collateral in the event that you default on your monthly credit card repayments. A secured credit card will usually have a credit limit that is equal to the amount of the cash deposit, however many banks limit the credit limits of secured credit cards to about $500-$1000. It is important to note that the cash deposit is not used for transactions, but is instead set aside as a backup source of funding in case the cardholder is unable to make their monthly repayments. This is the primary difference between a debit card and a secured credit card, as debit cards use the funds of the account holder fund transactions, while secured credit cards operate similarly to conventional credit cards, with the only difference being that there is a cash deposit held by the bank that can be used to fund repayments in the case of default.

The Pros and Cons of a Secured Credit Card with No Annual Fee
A secured credit card can give you all of the advantages of a conventional credit card, without the worries of default. Secured credit cards are accepted everywhere that conventional debit cards and credit cards are, and carry interest rates that are similar to their conventional counterparts. Some secured credit cards can also be used to rebuild the credit score, so long as the issuing bank files a report pertaining to the secured card to one of the three main credit reporting agencies (Experian, Equifax, or Transunion). It should be noted that a lot of secured credit cards are useless for rebuilding credit because their account history is not filed on your credit report, so it’s important to inquire about this feature before applying if you are intending to use the card to rebuild credit.

How Much Money Can You Save by Applying for a Secured Credit Card with No Annual Fee?
Most annual credit card fees range from $30-$200, depending on the interest rates, credit limit, and rewards programs offered with the card. Most secured credit cards have lower credit limits and typically carry annual fees of about $50, while business credit cards with extensive benefits may carry annual fees of several hundred dollars. Although this may not seem like much, considering the fact that many cardholders do not repay their balance in full each month, an annual fee can be equal to an entire month’s repayments. Thus, a secured credit card with no annual fee can give you the boost needed to reduce the stress of repaying your monthly credit card repayment for one month out of the year.

How to Find a Secured Credit Card with No Annual Fee
The easiest way to find a secured credit card with no annual fee is to utilize one of the many credit card comparison websites online, which allow you to compare credit card features from multiple card issuers within a centralized interface. It may also be possible to have the annual fee of your secured credit card canceled by simply calling the bank and requesting that the fee be waived. In fact, as long as you make your monthly repayments on time and have a good history with the issuing bank there is a very good chance that the fee will be waived upon request. If your bank refuses to waive the fee, you may want to begin searching for another secured credit card no annual fee.