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The premise has always sounded ridiculous. You're paying the bank so that you can loan money to yourself. To be more accurate, you're paying the bank so that t
by copperx 3y ago
The premise has always sounded ridiculous. You're paying the bank so that you can loan money to yourself.
To be more accurate, you're paying the bank so that they can be a witness to you loaning money to yourself.
The sole purpose of that insanity is to increase your credit score, is that correct?
- Riseed 3y agoYes, they're commonly used as "starter" credit cards, to increase credit score. I presume they also come with the other benefits of a credit card, such as the amount of security deposit required when renting a car, as well as fraud and chargeback liabilities and timelines.
- Nifty3929 3y agoI've never used a secured credit card, and I'm with you that it seems ridiculous. But I think a more honest question is: Why do people do this? I'm willing to give folks the benefit of the doubt for being smart and rational. So genuine question we should be asking ourselves (or them): What is the appeal of a secured credit card? Is it really just about the credit score?
- anonuser123456 3y agoIt makes sense as exactly that. You show the bank that you can manage a float. When you’ve demonstrated you have the executive function to do so, your score goes up.
- Sparkyte 3y agoYou get the money back upon closing the account.
- callalex 3y agoWith no interest, and they typically take months to give the money back. They get to invest the money for that time, and you don’t. It’s an outright scam, but you have to have a credit score so whatcha gonna do about it?