However, there is still a ray of hope for all these Canadians who fall in any of the above mentioned categories. Now, the credit cards which you still can avail are secured credit cards. These credit cards are extremely beneficial. But before discussing the advantages, let’s have a look what exactly does this term ‘secured CC’ mean.

Secured deposit credit cards are similar in function to other credit cards however, the only factor that set them apart from others is that you need to secure these cards with particular sum of money. In simple words, you are required to place a specific sum of credit in your account with the card issuing company and afterwards you would be able to use your credit card in accordance with the sum of money that you kept in your account. You may find it a little cumbersome but these credit cards can prove useful in a number of ways.

The most eminent advantage of these secured cards are inevitable in case you are serious about rebuilding your credit score. In case you have a poor credit score or do not have any credit score, not only the financial institutions will shy away from providing you with a loan but also you won’t be able to obtain a regular credit card. So in such a situation, if you get a credit card which could help you in redeeming your credit history, you should go for it. These credit cards will actually start reporting to Equifax Canada and TransUnion right after you get such a card issued. Moreover, as long as you are using these secured credit cards, you will not run into debt which eventually will improve your credit score.

Moreover, for immigrants in Canada, it often gets difficult to get a credit card and unless you get a credit card, you can not apply for different types of loans, which seems really necessary in these tough times. Immigrants in Canada need to start afresh, which means they have to build their credit score from scratch and for this purpose the credit cards which are secured seems most appropriate.

Lastly, the procedure of getting these cards is really simple and effortless. But ensure that you understand the policies and rules of your card issuing service provider. Moreover, make sure that card issuing company charge you interest at nominal rates and see if there are any hidden dues to pay or not.

Our secured deposit credit guide will assist you in finding more about AMEX secured credit card.

Bank secured credit cards look and work just like traditional credit cards, although they use your bank account as collateral.  Anytime you aren’t able to pay your credit card bill at the due date, the bank will take the money out of your account.  This way, there is always money there for the bank, in the event that you are unable to make your payment.

Bank secured credit cards are also ideal for those who have a bankruptcy or simply don’t qualify for a line of credit due to bad credit or no credit history.  These credit cards show your bank that you are able to pay your monthly dues, and that you are taking the necessary steps in rebuilding or building your credit.  Over time, if you remain responsible and pay your bill on time, your bank may give you an unsecured line of credit – known as a standard credit card with no collateral.

Due to the fact that bank secured credit cards only allow you to spend what have in your account, you don’t need to worry about debt.  When you can’t make a payment, the bank simply takes the money out of your account.  Although this is a great back up plan, you should always pay your bill and never let this happen.

Just like other credit cards, bank secured credit cards do have disadvantages that can hit you like a ton of bricks should you use the card irresponsibly.  Anytime you don’t pay your bill on time, the bank can hit you with high interest charges and late charges.  These charges and fees can get higher and higher if you don’t start paying your bill, which can eventually cause you to drain your account that you set aside.  If you pay your bill on time though, you won’t have to worry about being hit with these types of charges.

For those who have bad credit or need to start building credit, a bank secured credit card is a great place to start.  These cards can lead you to an unsecured credit card, providing you pay your bill on time.  Almost all banks offer these credit cards, all you have to do is ask.  Once you have kept your credit card in good standing for a period of time – you’ll have the satisfaction in knowing that you are taking the right steps in rebuilding your credit.