Reality Check

Your Money

February 27, 2005|By Lorene Yue | Lorene Yue,Your Money

Secured cards might not be for you.

The offer of a secured credit card is tempting for those who, because of poor (or no) credit history have trouble getting approved for a standard card. But check before forking over the fee and your personal information. Unscrupulous operators will ask for an upfront fee, which a legitimate bank would not do, or could even loot your bank account.

Not every company that offers secured credit cards - which allow you to charge up to a certain percentage of funds that you set aside in a bank account - is going to rip you off. If you really want one, go to a trusted source, such as your local bank or credit union.

Don't apply for a secured card by dialing a 900 number. You will probably pay high costs just for the call. And ask about annual and application fees to ensure that your funds aren't drained.

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