6

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!

  • 1
    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 Mar 3 '16 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 Mar 4 '16 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 Mar 4 '16 at 17:12
  • @Lilienthal, OP says specifically that there is no annual fee... – quid Mar 4 '16 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 Mar 4 '16 at 20:14
5

Yes, you have correctly described "revolving credit" (though in this case you have funded the account yourself)

4

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.

  • 1
    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 Mar 3 '16 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 Mar 3 '16 at 23:55

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.