Don’t have a credit history or want to improve it? Did you know that there is a class of products that can help you achieve it. That’s right, I mean secured credit cards or credit cards without a bureau. If you want to better understand its operation, here I explain.
Why get a line of credit?
This is the basic question that should guide us in the choice of this kind of products, since there are endless reasons why we might want a plastic, for example: as a method of payment for travel, to buy in department stores or online. But if you are interested in obtaining a credit card without a bureau, the best option is guaranteed cards.
Why do you ask the Bureau to get a credit card?
There are different types of credit cards and these are offered to the account holders according to the type of risk they represent for the institution . Imagine that you are a very responsible person with your payments, you have previously requested loans and have managed to settle them in a timely manner. All this behavior is based on your credit history (yes, the famous Bureau), it shows how reliable you are to offer you some type of product.
Banks look closely at this data to determine whether or not they approve of plastic. In the previous example it would be logical to think that if you have an excellent use of credit, then you will receive offers of cards with lower interests, which entails a very competitive CAT, better benefits and with a much higher credit line.
But what options does someone with bad credit history or no background have? That’s where secured credit cards come in.
What are secured credit cards?
Also known as insured, they are plastics backed by money that the same account holder deposits to the institution, hence it is a guarantee of payment. Generally, this amount must be equal to or greater than the line of credit that you are approved with the plastic and, although it does not give you any financial benefit to have your money in the plastic, it is the condition to provide you with this product, since it will charge from there if you miss a payment.
In the case of cards guaranteed with revolving credit, that is, those whose line is returned when you finish paying it, may have commissions and interests greater than the rest of the products in this range. This is understood as the client lacks a support that allows him to entrust another loan in better conditions.
However, according to CONDUSEF information, after showing good behavior for some time, your money is refunded and you can request an unsecured credit card.
Who offers guaranteed credit cards in Mexico?
You can currently find some kind of products in this class, but you would have to ask if they have this kind of products in their catalog. However, now you have the possibility to explore financial technology companies, fintech, to discover other options. I recommend you Check.
When should I get a credit card without a bureau?
As we mentioned earlier, there are a couple of cases in which the guaranteed cards could be very useful:
- If you do not have a history that supports you as a good payer, getting this type of plastics can make your way.
- If for some reason you stopped paying a loan and the institutions no longer entrust you with another similar service, this can be a good step to improve your history and thus straighten the relationship you had with the institutions.
On the other hand, if you plan to improve your credit score, do not forget that the first step is to settle all your debts. Therefore, consider going to a credit repair company to settle your outstanding accounts and thus start your new financial life on the right foot.