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What is a Secured Credit Card?
We will all need a credit card at some point in our lives. We need them to make hotel reservations; and we need them if we want to rent a car. A secure credit card is a credit card that requires a collateral deposit, which will become the credit line for that account.
That account is frozen for when you have a credit card; if you can’t pay your monthly fee, then the money that you owe the company will be taken out of that account. You can, if you wish, add more to that amount, so that you can feel a bit more free when using your credit card to make purchases; however, not as many people will have a secured credit card because they do sometimes charge an application fee. And they all charge an annual fee, which vary dramatically, so remember to shop around to find the best deal for you.
Most secure credit card companies will give you a credit line equal to the amount you deposited; however, some will only give you a certain percentage of your deposit, but then others will offer you double what you deposited, so always ask your issuer about their policies. The deposit you make will usually have to be around $100 to $500.
Some companies will increase your credit line without your paying another deposit, but only if you have paid them their monthly amount, correct and on time for several months; this can be seen as a bonus for keeping within the rules that you signed up for. But be cautious. Some companies will even charge you a fee when they increase your account. If you don't read the fine print, you may miss this agreement.
Secured credit cards are a more safe way to shop, knowing that your deposit is at risk if you overspend; it makes you feel more inclined to spend less and stick to your budget.
| 2010 EDITOR'S CHOICE - TOP 5 STUDENT CREDIT CARDS
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RANK |
CARD |
CATEGORY |
RATING |
APPLY |
| 1 |
 |
| Best OVERALL Student Credit Card |
| Discover Student Card |
| No Annual Fee. Unlimited Cash Rewards. Up to 20% Cashback Bonus When You Shop Online. Customer Service in Less than a Minute, Anytime. |
|
97 |
|
| 2 |
 |
| Best Rewards Program Student Credit Card |
| Citibank mtvU Platinum Select Student Visa Card |
| Through the reward program, cardholders earn one point for general purchases and five points for every dollar spent at restaurants, bookstores, record stores, movie theaters, and video rentals. |
|
95 |
|
| 3 |
 |
| Best PERSONALIZED Student Credit Card |
| Discover Student Card - Monogram Collection |
| No Annual Fee. Unlimited Cash Rewards. Personalized Card Deisgn with your initials on the Card. Customer Service in Less than a Minute, Anytime. |
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92 |
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| 4 |
 |
| Best ON-TIME PAYMENT Student Credit Card |
| Citibank Forward Card for College Students |
| Students who use this card correctly by staying within their credit limit and paying on time will receive 100 bonus points per billing period and a potential reduction of their interest rate. |
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91 |
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| 5 |
 |
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88 |
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