| Many consumers have a bit of confusion when it | | | | -credit. When you make a purchase or withdraw cash |
| comes to distinguishing a secured credit card from an | | | | (usually called a cash advance), funds are drawn from |
| unsecured credit card. They both carry a brand logo | | | | your "line of credit." You pay back the amount you |
| from one of the major credit card companies and they | | | | borrowed or "charged" each month, or carry over to |
| both can be used anywhere that major credit cards | | | | the next month (revolve) a certain amount that was |
| are accepted. It is the behind the scene financial | | | | borrowed and you are assessed an interest |
| activity that determines the difference between a | | | | charge.You are then responsible to pay the interest |
| secured and an unsecured credit card.A secured | | | | charge as well. Credit cards carry a brand logo (e.g., |
| credit card is a guaranteed VISA or MasterCard that | | | | Visa, MasterCard, American Express, etc.) and are |
| has been secured by a deposit to the issuer's bank. | | | | accepted by participating merchants. When you use |
| Generally, you must deposit an amount, ranging from | | | | your credit card, the transaction requires a |
| $300 to $5000, in a low-interest saving account or CD | | | | signature.Determining what type of credit card is best |
| to secure the credit card.You then receive a credit line | | | | for you will depend on your personal budgeting and |
| for up to 100 percent of your account balance. Each | | | | spending habits as well as the status of your credit |
| creditor has its own requirements for how much you | | | | score. People with low credit scores usually have a |
| can deposit for your credit line. The creditor issues you | | | | better chance at obtaining a secured credit card over |
| a credit card by using your deposit as security.On the | | | | an unsecured credit card. |
| other hand, an unsecured credit cards offer just that | | | | |