Roughly one out of every three people has a below-average credit score. Not only do one’s monthly expenses rise as their credit score falls, but access to credit declines dramatically as well. This represents something of a Catch-22 for newcomers and those working to rebuild their standing, since a monthly influx of positive information from a responsibly managed loan or line of credit is the only way to either build a solid score from scratch or devalue negative credit report listings.
That’s why a secured card can be such an important tool. No matter how slim approval rates get for unsecured credit cards, or how much issuer competition exists, you can pretty much be assured of getting a secured card as long as you have at least $200 for the refundable security deposit. And since this deposit doubles as your spending limit, thereby preventing overspending and minimizing risk, issuers don’t need to charge much in the way of fees.