Consideration when applying for a Secured Credit Card

Before getting a secured credit card (SCC) it is necessary to know if the prospective issuer is legitimate and recognized. One must also check out the amount of deposit required, the credit limit offered on the card, the annual percentage rate (penalty charges applicable in case of late payment) and the applicable finance charges.
You must also check if it is possible to convert the secured credit card to unsecured type in future. The card issuers must share your credit records with credit bureaus, as it affects your credit history.

Some of the banks also provide a grace period on their secured credit cards, if the cardholder makes payments regularly on time. In case there is no grace period, you must ensure that the dues are paid timely; else, interest on your borrowings would accrue immediately. At times, the issuing bank may even increase the credit limit if the cardholder makes consistent payments over a period.

As you acquire a secured credit card against a bank deposit, it is relevant to ask if the deposit earns any interest. It generally depends on the lending policy of the institution and varies from bank to bank.