How to Open a New Secure Credit Line

A secured credit line should help you build credit.
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If you struggle with credit issues, you may hit a brick wall when it comes to financing approvals. A secured credit card can be a savvy tool to improve your credit rating. With a secured credit card, you get an account with a security deposit equal to your credit limit. As you use your secured card and make timely payments, you'll boost your credit rating and give yourself a green light with creditors. The sooner you open a new secure credit line, the faster you can move on to an unsecured credit line.

Step 1

Approach three to five different lenders to learn about the secured credit lines offered. Find out the interest rates, fees, terms, balance transfers and the minimum security deposit required for opening an account. Interest rates range from 0 to over 20 percent. Annual fees range from nothing to over $100. Minimum deposits average between $200 and $500, depending on the lender. Find out what credit history the lender requires to open a secured credit line. Take notes about the information you learn so you can compare the information later.

Step 2

Do a little number-crunching to pick the best card. By comparing the terms and rates of each card, you can choose the lender with the best secured credit line account. Be sure to compare annual fees and interest rates. If one card has no annual fees but a 22 percent interest rate, you might be better off choosing a card with a higher annual fee and a lower interest rate. A secured credit card with both a low annual fee and low interest rate would be a winning card.

Step 3

Complete an application for the lender. Give it a once-over to make sure that you filled it out accurately and completely. Submit the application either over the internet on the lender’s website or take it to the lender in person.

Step 4

Deposit the security deposit into the secure credit account after you receive approval. If you're dealing with a local lender, visit with your cash in hand and make the deposit. If you're working with an online lender, use electronic funds transfer to move the funds from a different bank account to the secured account -- you'll need the routing number from the depositing bank account. If the lender has annual and activation fees, include enough money to cover these fees so that you will still have an amount equal to or more than the minimum security balance in your credit account.

Step 5

Follow the activation instructions for your credit line. The lender will guide you through creating a PIN to verify your identity before using the account. You may need to answer security questions, too. Don't worry -- you pick the questions so you'll know the answers.

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