Life in todays world with out a credit card can be challenging. Without a simple piece of plastic you cannot rent a car, hotel room or safely shop online. For most people getting a charge card is very easy, but for borrowers with low FICO scores or a troubled financial past getting a card can be difficult. For these borrowers the only option is a secured credit card.

What Is a Secured Credit Card

A secured credit card is backed by the consumers own money that is held in an account, the normal amount for a new card is $300-$500 dollars. What this does is gives the lender a source of funds that will cover any charges on the card that the consumer does not pay. Because the card is backed up by funds the approval is almost guaranteed.

How Will A Secured Credit Card Help Me Boost My Score

These types of cards report to the agencies just the same as a standard account does. The best part is your credit report does not list the account on your report as a any differently, so no one will know the difference. It will basically give you the same FICO score boosting power as a normal card.

How Much Will a Secured Credit Card Boost My Credit Score

How much the secured card will boost your credit score varies from person to person. The main concern you should have is paying it on time, never pay late and not carrying a balance on the card of more then 45% of the limit. Maxing out your account will actually reduce your score as it makes you look like a risky borrower.

After a period of time the bank may offer to change your card to a normal account. At this point you can apply for one or two more new accounts to boost your score a little more. Just remember to use restraint and common sense and your FICO score should increase nicely.