As a freelance, Julia always has difficulty when applying for a credit card. Understandably, besides having no salary slip, Julia’s monthly income was not fixed. Even if the total income can always be above five million, it is still difficult to penetrate the credit card application requirements at a number of banks.
In fact, Julia’s goal to have a credit card is nothing but to make her finances more controlled. He wants to make transactions easier and monitor his spending history. Not to mention, there are a number of features on credit cards that if used wisely can make Julia more economical.
Ever experienced something similar? If so, maybe you need to get acquainted with a secured credit card (SCC).
Secured Credit cards
Secured credit cards, aka credit cards with collateral, have features, functions, and uses that are not much different from credit cards in general. With a secured credit card, you can also shop for non-cash or use PayNet services.
However, unlike ordinary credit cards, SCC does not take into account employment status and income. Instead, the SCC requires a guarantee fund to be held in an account at the same bank as the SCC issuing bank. The form of funds can be in the form of savings or time deposits.
With minimal requirements, the process of making a guaranteed credit card is even easier and faster than a regular credit card. As long as guarantee funds are available, SCC can be approved immediately.
The guarantee fund is also used as a determinant of the credit card limit. The greater the guarantee fund, the greater the limit that can be obtained. That way, you can set the limit you want.
How, interested? Before submitting an application, let’s understand more about credit cards with this guarantee.
The difference between credit cards and secured credit cards
In addition to much less requirements, secured credit cards have several other differences with ordinary credit cards. The following are:
1. Method of payment
SCC users must pay in full payment. Unlike ordinary credit cards that provide minimum payment options. Even so, banks provide a grace period of payment or grace period until the due date.
The credit card limit has been determined by the bank taking into account the amount of customer income. While the SCC limit is determined based on the nominal funds used as collateral. Generally, the SCC limit is 80-90 percent of the guarantee fund.
3. Bad credit
If the credit card bill is not quickly paid, the interest charged will multiply from month to month. If there is no good faith from the customer, the bank can use the services of debt collectors alias debt collectors.
Unlike ordinary credit cards, debt collector services are not needed in the SCC, because if the customer has debt arrears, the bank can take collateral and close the SCC card.
Security deposit status
Funds used as collateral will not be contested by banks as long as SCC payments are always smooth. Funds must also be safe because they are guaranteed by the Deposit Insurance Corporation (LPS) as long as the value is not more than $ 2 billion.
Customers will also continue to get savings or deposit interest as usual. But, new funds can be disbursed after the SCC is closed and all bills are paid.
SCC is suitable for those who want to manage expenses by using credit card facilities, but cannot meet credit card requirements. For example, small businesses, housewives, and freelancers. This card can also be used as a tool by parents to train children to manage their finances.
How to apply for a secured credit card
To make a credit card with collateral, of course you must have prepared funds that can be placed as collateral at the card issuing bank, either in the form of savings or deposits. The value depends on the policy of each bank.
For example, the Good Lenders credit card from Cream Bank that offers a guarantee fund starting from $ 500 thousand with a card limit of 90 percent of the guarantee fund or as much as $ 450 thousand.
Next, just come directly to the bank branch office that offers the desired secured credit card. Some banks also provide online or application submission facilities.
There are also banks that deliberately do not display information about this card on the official website. However, that does not mean the bank does not offer a secured credit card. Therefore, you should come directly to the branch office or contact the relevant customer service to get more complete and accurate information.
If the credit payment history is always smooth and without problems, this card can also be used as a reference for regular credit card submissions for beginners.
Before submitting, don’t forget to pay attention to the fees charged on making and using the card, ranging from annual fees, transaction interest, cash withdrawal fees, late payment fees, to card closing costs. Good luck!