Should You Have More Than One Credit Card?

If you only have one credit card, you’re missing out on a ton of benefits. For some people, one credit card really is better. But if you know how to use them properly and pay them off each month, multiple credit cards can actually help you master your money.  It really just depends on what you want from your credit cards and what your financial goals are. Sure, one credit card is fine. Especially if you don’t plan to use it often. But you’re leaving free money on the table. If you want to maximize your income and keep building […]

What is a Secured Credit Card and Who Needs One?

Many people can't qualify for a traditional credit card. If you don’t have a credit history in Canada, or if you have a negative credit history from past mistakes, it may be hard to qualify for an unsecured credit card. This is due to lenders seeing you as more risky than someone with years of using credit effectively. Thankfully, if your credit is poor or non-existent, that doesn’t mean you can’t get access to credit. You may need to instead opt for a secured credit card, which will help you make those same emergency, online or in-store purchases. Keep reading to learn all you need to know about secured credit cards, and how they work.

What is a secured credit card?A secured credit card is similar to any other credit card except that the lender requires that the cardholder deposit money in advance. The amount can vary, but is generally anywhere between one to two times the credit limit. So if you want a limit of $1500, you will have to pay them somewhere between $1500 and $3000 in most cases.

The lender will keep this as collateral and then provide you with a secured credit card. Your deposit simply protects them in case you cannot pay off the balance. If you can’t or don’t pay, they will simply keep the deposit or at least a part of it, so they aren’t out any money. Because this lowers the risk for lenders, these cards are much easier to get for almost anyone, even if you haven’t been the best with credit in the past.

How does a secured credit card work?Now that you know a little about what they are, it is a good idea to familiarize yourself with how they work. The good news is that once your deposit is paid to the lender and you have received the card, it will work nearly identically to a normal unsecured credit card. You can use them anywhere that credit cards are accepted, and if you carry a balance you will still be required to pay interest.