Are Secured Credit Cards Not Doing It Anymore


In December of last year, I wrote a post around the discussion of secured credit cards. If you read that post I may have peaked your interest in using a secured card or an alternative to improve your credit scores. I followed up with talking a bit about the first steps to repairing bad credit scores and common credit score myths you shouldn’t fall prey to. So, if you’ve been following along and putting the posts into action, chances are that you’ve moved from the poor credit score range to at least the fair credit score range by this point. Congratulations, it’s been a long road, but you’ve made it! So, what’s next?

Continue Building

In the past, I offered a credit building service. I worked with tons of people digging through credit reports, filing disputes, creating plans for paying off debts, and ultimately creating positive lines of credit to improve their overall credit reports. At this point, most of my customers were very happy. They watched their credit scores go from poor to fair, and generally wanted to celebrate. However, this point proved to be the most crucial point as well.

About a year into working with people on their credit scores, I started to notice a trend. It seemed like consumers had been divided into two groups. The first group, 60% of people would be so excited about the jump in their scores that it would motivate them even more to continue building. Unfortunately, about 40% of people sort of just grew content with the credit score they’d built for themselves.The sad reality is that these people would go back to their old ways financially and destroy all the work they’d done to get where they were!

A Friendly Reminder Of The Plan

Just in case you’ve forgotten a step over the last 6 months, or you weren’t there for the original post. Let’s go over a couple of tips to keep your momentum going…

  1. Continue Paying Down Debts – If you’ve still got debts looming over your head, don’t worry. Your credit is improving because you’re making great financial decisions. Over time, you may have started to bring in more money. If that’s the case, consider sending extra payments to your highest interest debts to knock those down a notch.
  2. Don’t Stop Using Your Credit Card Responsibly – We talked about using your secured credit card while following very specific rules. The rules are simple, don’t spend more than 50% of your credit line, make sure to pay your balance off in full every 2 weeks, and actively use your card every month. Although the credit card may change, the rules won’t, so try not to forget them.

Now It’s Time To Reward Yourself…Literally!

This post can’t be all business right? I mean, you just hit a major landmark, don’t you deserve some kind of Kudos for your efforts? Of course you do! So, take a second to pat yourself on the back…

Now, let’s talk about rewarding yourself in another way. When you first got your secured credit card, you had poor credit. Because of this, your credit card choice was based on one simple thing…you wanted to improve your credit score, and you wanted the credit card that was best for doing that. However, because you’ve reached fair credit, that’s no longer the case. Now there are 2 major factors to consider…

  1. You Want To Continue Building Your Credit – Of course you want to build your credit score to the excellent range, but the truth is that any credit card can help with that. Because you now have fair credit, there’s no ball and chain attaching you to secured credit cards; you have options!
  2. You Want More From Your Card – Let’s face it, you find yourself reading personal finance blogs where bloggers talk about the vacation they just took for 300 bucks because of their credit card rewards. You dream about doing that, but you’ve never had the credit to get the cards that let you. Although you’re not going to get a top notch rewards credit card yet, you do qualify for rewards!

A Great Rewards Credit Card To Kick Your Journey Off With

One of my favorite credit cards for consumers in this stage of the credit building process is the Barclaycard® Rewards MasterCard®. I do have to admit, I get paid to promote this card here at CNA Finance, but the truth is that I get paid to promote tons of different credit card offers; many of which, like this option, are designed specifically for consumers in this stage of the credit building process. So, being paid to promote it isn’t why I’m telling you about it. The bottom line is, if you’re following the plan I outlined months ago, and plan to do it well into the future, as a person with fair credit on this plan, this card is going to be one of the best ways for you to enjoy rewards.

Tips For First Time Rewards Credit Card Users

Tip #1: Don’t Use Them If You’re Not Ready! – Rewards credit cards reward you for spending money. If you’re a spendaholic like I used to be, this is a recipe for disaster. That being said, only use rewards credit cards if you’re 100% confident in your ability to make sound financial decisions when using it!

Tip #2: If You’re Going To Use Rewards Credit Cards, Maximize Your Earning Potential – I recently wrote a post called “How To Earn More Rewards With Your Credit Card“. If you’re serious about earning as many rewards points as possible, this is a must read!

Tip #3: Continue To Pay Bi-Weekly – Although this is one of the tips in the How To post mentioned above, it’s important enough for me to mention it again. Paying your credit card completely off on a bi-weekly basis will allow you to avoid interest by making sure your credit card is paid off well before the grace period. If you pay interest, you’re not earning rewards, you’re paying for them! So, don’t pay interest!

Reader Question

Are you just breaking through the fair credit barrier? If so, are you excited to start earning rewards? If you’ve got great credit, do you remember how it felt to hit this mark? Finally, if you’ve got poor credit, do you have a plan for improving it?

Great Reads From Around The Blogosphere

How To Make Money For College Doing SAT Prep – This is an awesome post that shares how college students can rack in some big bucks doing SAT prep. If you’re in college and in need of money, it’s a must read!

Music-Mondays: Tears in Heaven –  This is an absolutely amazing Memorial Day post by Shannon. It actually took me two go arounds to read it because it’s a bit emotional. Nonetheless, a great read, check it out!


  1. I avoided cards like the plague and still managed to have an excellent credit score in my early twenties through car loans. Those are gone and I just started using rewards credit cards. I’m happy so far, but am glad I dodged them when I was younger and my finances weren’t quite as secure.

    • Hey FeemeFrugality, for many people it is best to wait until you gain the financial control needed to handle the responsibility of owning a credit card. Thanks for swinging by!

  2. These are great pointers Josh! Building or rebuilding your credit is definitely not an overnight process and it requires work, but that work will save you so much money over time. Thanks for highlighting my Memorial Day post this week!

  3. I have a great credit score, so I’m not needing to build it up, but I love the benefits of rewards cards! If you can use cards responsibly, I see no reason not to get some benefits out of spending that you would be doing anyway.

  4. I “inherited” my parent’s good credit so right away my freshman year of college I had a really solid credit rating. I think I’ve only missed one payment ever so I’ve been able to maintain that high credit rating.

  5. Joshua,

    You are so right about the type of folks who fall back into trouble. It took me a long time to come to terms with having repeat clients in my credit repair practice. You are cheering them to keep moving forward, but they end up maxing out the secured credit card.

    Those who do get it and move past the fair credit into good and then great credit are the ones that make it all worth it. Great article….love the blog.


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