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Secured credit cards the next Dinosaur?

Posted by Tracy Becker in Increasing Scores on March 16, 2009 | no responses

 

Now we are seeing less and less secured credit card offers out there. Chase, merging credit cards with Wamu, decided to leave the secured credit card business behind.

Just like the banks the credit card companies are holding back on secured and unsecured credit card offers. They are decreasing offers for high risk credit or subprime cards and reducing limits if not closing cards completely.

Secured credit cards have been used by consumers to establish credit for a variety of reasons. Secured credit cards are backed by a deposit made by the consumer, mostly equal to the credit limit of the card. They usually must deposit no less then amounts of $200 or $300 that sit in a savings account. These funds are not used unless the cardholder defaults. Because these cards pose little risk to banks, they have been easier to obtain and can help people who can’t qualify for unsecured cards to build a good credit history.

Consumers who have had bankruptcy, foreigners trying to establish credit history, and the young first starting out in the credit card environment would get the most benefit from them. My prediction is they will slowly trickle away until there are none being offered at all.

The new credit card rules going into effect in 2010 are an indication of days a head (read previous articles to see new Credit Card rules 2010).

If you would like more info on the variety and ratings of credit cards go to www.credit-card-perks.com. This is an excellent site for information.



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