2 Easy Steps To Managing Secured Credit Card Accounts

A secured credit card account may be required of an individual with bad credit. A secured card is a card that requires the cardholder to place a deposit equal to the amount of credit that the card’s issuer requires. The debt accrued on the card needs to be paid on a periodic, monthly basis in order to prevent default or late payment fees and penalties. If an individual needs a credit card and only qualifies for a secured account, there are a few steps that can be taken to manage the account.

Apply for a Low Limit Card

One way that a secured credit card account can be managed is by setting a low credit limit for the account. Setting a low credit limit allows the cardholder to limit the amount of credit available for spending and reducing the chance of late payment fees due to exceeding the available credit amount. As the cardholder establishes a consistent history of paying their credit card bill on time, the limit on the card can be increased to meet their new level of responsibility.

Set a Spending Limit

An individual with a secured account should set a monthly spending limit amount for the account. Spending limits helps the cardholder manage their account by limiting the amount that can be spent on a periodic basis (i.e. monthly, quarterly, etc.) and making sure that the amount of spending does not exceed what the individual cardholder can afford. This limit helps the cardholder manage their spending and improve their credit over time.