credit cards

Secured credit cards: What to know

Check the APR
Check the APR

Because cardholders may not pay their bill in full or on time every month, the first thing they'll want to know is the annual percentage rate, or APR. The issuer is required by law to disclose the APR, which is typically a little higher than unsecured rates, despite the fact that the issuer is taking on less risk because of the deposit.

Currently, the average rate on secured credit cards runs around 22.9 percent.

But while consumers should shop for a good rate, too much emphasis on the APR misses the point, says Kim McGrigg, director of communications for Junior Achievement-Rocky Mountain Inc., a student financial literacy initiative in Denver.

"Remember that the main purpose of obtaining a secured credit card should be to establish or re-establish a positive credit history," says McGrigg. "You can do this by paying the balance in full every month, (and if) you do, the interest rate won't impact you."

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Balance Transfer Cards 15.67% --0.00 15.67%
Cash Back Cards 16.36%  0.01 16.35%
Low Interest Cards 10.87% --0.00 10.87%
 
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