Choosing the Right Secured Credit Card

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It seems that everyone wants you to provide them with a credit card including hotels and airlines, even if you are able to pay cash. A debit card will suffice in some circumstances, but you may have a hold on funds or will need to pay a hefty deposit.

It can be difficult to get approved for a credit card with no credit or a poor credit history is difficult. A secured credit card could be the only way that you are able to start your credit or to improve on your credit history.

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Secured credit cards are good alternatives to regular credit cards. The difference is that you will need to put down a deposit that will act as your credit limit.

This security deposit is usually returned when the account is closed. Here is how you can choose a secured credit card.

The Fees

A secured credit card may have application fees, processing fees and annual fees from using payment solutions in South Africa. The fees for a secured credit card are described in the credit card offer and in the terms and conditions. You will need to look at these fees and understand them before you apply. If the secured credit card appears too expensive then rather find another.

Minimum Security Deposit

A secured credit card is secured through a deposit that is kept in a savings account and is only used if you default on your payments. You will have a minimum and maximum deposit limit.

A secured card that has a low minimum condition will be easier to get.

Credit Card Limit

The credit limit that you get on your secured credit card will be equal to your deposit.


The APR is the interest rate that is applied to balances that have been carried beyond the grace period. The finance charge will be higher if your interest rate is high.

Secured credit cards will usually have a higher interest rate but you can avoid paying interest as long as you pay your balance in full.

Timely Payments

If you want to re-build your credit then the credit card issuer will need to report to the credit bureaus. A secured credit card that does not report to the bureaus will not help with your credit rating.

Convert to an Unsecured Credit Card

The best-secured credit card is one that is able to convert into an unsecured credit card after a period of timely payments. Unsecured cards will have lower fees and a lower interest.