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