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One last thing I am pondering before getting a secured credit card.

Your due date is at least 25 days after the close of each billing cycle. We will not charge you interest on new purchases, provided you have paid your previous balance in full by the due date each month.

So that means I lose nothing if I always repay what I spent, and that would grant me full access to my credit line, whatever that may be. In short, I can't ever lose money by repaying the money owed and being given the full line of credit ... considering there's no annual fee. Is this true?

Example:

Deposit 300.

Credit line: 300.

Spend 30.

Credit line 270.

Owe 30 by X date.

Pay 30 on or before X date.

Credit line goes back to 300.

Since you can always get your security deposit back as long as you don't have any payments, is any money actually lost if you pay it back and get it back?

I'm not too smart so please help me. Thanks!

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    That's correct. Though it's important to note that it may take time for payments to actually credit to your account. If you pay $30 on or before X date, it might not actually be reflected for a couple of days. If, in that time frame, you overspend your secured limit you may be subjected to a fee.
    – quid
    Commented Mar 3, 2016 at 23:07
  • While I'm lead to understand that credit cards are normally free in the US, in many countries banks can charge (typically yearly) fees for maintaining an active credit card.
    – Lilienthal
    Commented Mar 4, 2016 at 13:58
  • @Lilienthal The US also has credit cards with yearly fees. American Express comes to mind as practically always having a yearly fee attached to it. I believe higher-end cards also have fees since they have much more lucrative bonuses to earn.
    – MonkeyZeus
    Commented Mar 4, 2016 at 17:12
  • @Lilienthal, OP says specifically that there is no annual fee...
    – quid
    Commented Mar 4, 2016 at 18:11
  • 1
    @quid I'm aware of that but I wanted to point it out for other users, especially international ones, as free credit cards are exceedingly rare in some parts of the world.
    – Lilienthal
    Commented Mar 4, 2016 at 20:14

3 Answers 3

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You are losing something - interest on your deposit. That money you are giving to the bank is not earning interest so you are losing money considering inflation is eating into it.

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    Considering that inflation is significantly outpacing most savings you're losing money either way. In this situation it's a small cost to initiate a credit history.
    – quid
    Commented Mar 3, 2016 at 23:52
  • Agreed. Having said that, I have never paid a deposit to start a credit history. I am not sure what part of the world "tree drags" is in but in the US, you can get a department credit card to start the credit history.
    – JStorage
    Commented Mar 3, 2016 at 23:55
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Yes, you have correctly described "revolving credit" (though in this case you have funded the account yourself)

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If you can pay the statement balance, every time, before the due date, you will not lose any money. However, everyone can screw up.

In my 12 years of credit card usage, I mistakenly pressed "minimal payment" button instead of "statement balance" button twice. In total, I lost $2 in interest charges.

In another incident, I pressed "statement balance" button in a bill pay service too early - before the current statement is uploaded. Since the previous statement balance was less than the current month's minimal payment, I would effectively miss a payment and rack up a big penalty. Luckily I discovered this 6 hours before the end of due date, and fixed it via telephone.

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