Secured Credit Card FAQs

The concept of secured credit card is to win the trust or faith of bank and other lender. If you are new to USA or just starting out your employment in USA, it is most likely that you don’t have established the credit with any bank or lender. Bank or lender is not a charity organization who can provide a credit card to any person, and let that person abuses it by spending the money on credit card. Newcomer to USA do not like the concept of a secured credit card because it requires that you put down certain deposit to the bank, and amount of your deposit usually becomes the maximum amount that you can spend on the credit card, also known as credit card limit. Here is the list of frequently asked questions

I just arrived from India, and I have the Credit Card issued from India with 2 Lakh Rupees of credit, can’t I just use that ?

Ofcourse, you can. However, if you are planning to leave/study/work in USA. It is important that you start winning the trust of the American banks and establish your credit on American soil rather than keep paying your overseas credit card bills.

I have a really good credit overseas. Why bank is not issuing the credit card to me ?

In USA , your trusty worthiness is measured in form of credit history. Read this article to know more about the credit history. Even if you are a son or daughter of US President no one is spared here, if you don’t have a credit history , one just cannot get the credit card.

What’s the difference between secured and unsecured credit card ?

How much interest will my deposit earn, and what kind of account does the deposit have to be in?

Generally, you’ll be getting about what you’d get if you opened a savings account at your own bank. The deposit options for credit card include a savings account, money market or certificate of deposit. Also, ask the credit card issuing bank about how long the money has to stay on deposit after the account is closed. Some banks will want to keep the deposit for a couple of billing cycles to cover any stray charges that arrive.

How do I obtain the unsecured credit card ? And how long does it take to qualify for an unsecured card?

The secured credit card issuer should want to keep you as a customer, so most will qualify you for an unsecured card after a period of making all your payments on time. The average is about a year. Also, as soon as you receive your secured credit card and made monthly payment on-time for 6-7 months you will start receiving “unsecured” credit card offers of all kind. Please note that applying for too many credit cards would affect your credit score because for lender your profile would be deemed as someone who is really looking for a way to spend money by applying for many credit cards at once.

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