Credit cards are convenient. Checking into a hotel or booking an airline ticket is a more straightforward process with one. However, not everyone can get a credit card. That’s where guaranteed credit cards come in.
A guaranteed credit card offers guaranteed and near-instant approval. This is because they often have few requirements. Also, as a condition of approval, all you may need to do is put down a security deposit as low as $50.
Most credit cards require good to excellent credit. However, a guaranteed credit card doesn’t focus on your credit score. So, with a guaranteed credit card, Canadians without good credit can enjoy the benefits of having a credit card.
While they may not have the glitz and glamour of other credit cards, guaranteed credit cards have unique perks. For instance, they can help you rebuild your credit score.
Like a regular credit card, a guaranteed credit card requires you to apply with a credit card provider. You may have to put down a security deposit if your credit is not ideal. However, you may not need to if you have decent credit.
After you post the deposit, the credit card company will issue your guaranteed credit card. You can then use it like a regular credit card.
While guaranteed credit cards differ from one credit card provider to another, they have some common advantages and benefits.
Finding the ideal guaranteed credit card for you is simple. Consider the following pointers.
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A guaranteed credit card is similar to a secured card in some ways. The primary difference between the two comes down to the security deposit. With a guaranteed credit card, it’s optional to put down a deposit, whereas, with a secured card, it’s always required.
Also, you often don’t have to match the security deposit with the credit line of your guaranteed credit card. With a secured card, your security deposit must equal the credit line.
Anyone who has poor or non-existent credit. A guaranteed credit card offers a chance to build your credit, with near-instant approval available for all applicants. You can then enjoy all the conveniences of owning a credit card.
Yes, it can. As long as you use your card responsibly and make payments on time, your credit score will improve. Your credit card provider will report your payment history to the credit bureaus every month.
Your credit card provider will store your security deposit in a separate collateral account. Depending on the company, they may pay a small amount of interest on your security deposit. This interest earned is often credited to your account.