After going through a shaky period with your personal finances, there will be some things that will make you want to pull you hair out. One of them is being rejected for a credit card because your credit rating and history are simply not good enough. Fortunately, there is a dual pronged solution that will not only give you access to a credit card but also help repair your damaged credit rating: Consider a secured credit card.
Secured credit cards are something most banks offer because the bank assumes a marginal financial risk because you back the original credit limit set by the bank with a deposit to match it. For example, if you set a credit limit of $500, then you need to place a deposit of $500. This is far better than actually taking out an unsecured credit card, which can high very high interest rates that can do routinely exceed 30% as the bank assumes a higher risk due to your poor credit history.
A secured credit card thus works to everyone benefit: Consumers get a credit card that the can use to rebuild their credit rating, and the bank gets to welcome new customers without shouldering excess financial risks. Even if the bank charges a monthly, annual or per transaction fee, the consumer can still take advantage of the card to rebuild their credit, an opportunity that they would otherwise not receive.
It is true that many people will view the bank as their archenemy during an economic slowdown or in any economically challenging situation. But the bank can also be a friend and ally, by providing secured credit cards that gives customers the opportunity to build (or maintain) a good credit reputation and right their foundering financial standing.
This particular type of credit card allows customers to walk into a bank without feeling embarrassed about their poor credit rating and can form the foundation for an excellent long-term relationship, where customers view the bank as an ally and friend, not an enemy. The bank benefits through the long relationship, gaining a lifetime of business from the customer. Eventually, the customer’s foundering ship will eventually begin to sail on course and that is when both bank and customer can benefit yet again. The former makes money by now being able to offer additional services such as loans and mortgages. The customer gains because they have access to more services from the bank that helped them, including a traditional unsecured credit card.
