How does a secured credit card work?
I know that a secured credit card means using your own money but what I dont get is how is it to be paid back? If I opened a secured card with the same checking account, used their checks to pay off my secured card, where is the money coming from since I’m writing a check from THEIR bank?
A secured card has an account that generally has all or part of the max balance in it that cant be touched. they are essentially guarenteeing that the cc cant be defaulted on because they already have your money. After some time most of these programs will refund the money in the account and the card is no longer secured but instead just a normal credit card with terrible rates and annual fees.
When you get a credit card with a $500 limit, for example, you put $500 in an account to secure that card. When you use the card, you must pay it with money from your account, not the $500 security money you put up. If for some reason you do not pay the payments on the card, they will then use your security money. The checks you write are coming from your money, not the banks.
i thought a secured credit card was a card in which you have to pay a certain towards each month as insuarance to cover you if you were not able to pay any longer??
Plus why every is everyone spelling CHEQUE like this CHECK?
You have already been given a great answer, this is just a side note to Kinderbuena, who asked “Why is everyone spelling CHEQUE as CHECK?”
CHECK is the American English way of spelling CHEQUE, which is the European English version. Same word, same meaning, difference in spelling. There are a few words in the English language like that.