Contact: Linda Sherry or Ken McEldowney, Consumer Action, at (415) 777-9648.

Secured Cards Can Be a Good Way to Build or Reestablish a Positive Credit History

Tuesday, Oct. 22, 2002— Consumer Action, a national non-profit consumer education and advocacy organization, today released a new free consumer education series on how secured credit cards can be used to build or reestablish a positive credit history. For people with damaged credit, a secured bank credit card may be the fastest, most effective way to reestablish themselves as good credit risks in the eyes of lenders.

The new series includes a multilingual brochure—Building or Repairing Your Credit with a Secured Credit Card �and a backgrounder guide titled Questions & Answers about Secured Credit Cards. More than 150,000 copies of the brochure in Chinese, English and Spanish will be distributed to consumers by CA�s national network of community-based agencies. The backgrounder guide is designed to help agency staff educate their clients about secured credit cards as an option for rebuilding a positive credit history.

Consumer Action has long been interested in educating people about secured cards, because they offer a way to build credit and repair past problems. "Often, people who have been denied conventional credit cards can get a secured credit card instead," said Linda Sherry of Consumer Action. "Although secured cards tend to have higher interest rates and annual fees, they provide a valuable steppingstone to unsecured credit."

A secured card is a bank credit card backed by money that you deposit and keep in a bank account. That account serves as security for the card. If you don’t pay your credit card bill, your deposit may be used to cover your debt.

Some secured cards are easy to get, while others have strict guidelines about income and past credit history. Some will even accept people who have had a bankruptcy as recently as six months or one year before they apply. Many people find they can graduate to an unsecured credit card in about one year if they pay on time and stay within their credit limit.

Consumer Action’s simple, straightforward multilingual educational publications are offered in bulk for free to more than 6,500 community organizations nationwide, as well as directly to consumers who request them and on Consumer Action’s web site.