One of the credit building products Justine PETERSEN most frequently recommends for clients who complete Save 2 Build loans are secured credit cards.
Secured credit cards are credit cards offered by a bank that require the client to make a cash deposit before the credit card account is opened. The cash deposit is equal to the credit limit of the card and is held as collateral by the bank. If the client uses the credit card but doesn’t make the required payments, then the bank can keep the cash deposit. This allows banks to be less selective in the application process, making it easier for clients to establish a line of credit. If the client makes on-time payments, then the bank can report those payments to the credit bureaus, strengthening the client’s credit history. After a specified period of time in which on-time payments are made, then the bank may return the deposit to the client and allow the card to become unsecured.