Canadian Secure Credit Cards vs
Canadian Secured Credit Cards
I've been studying my traffic logs and noticed that people are looking for Canadian secure credit cards.
I thought I should write a blog post and talk about the difference between secure and secured credit cards.
SECURE CREDIT CARDS
The context of a secure credit card is one where a person hopes to keep her personal information secure from being stolen by unscrupulous individuals.
Identity theft takes place in the following ways:
- Credit cards are stolen from wallet or purse
- Credit cards are stolen at the office
- Credit card number and information are stolen when a gas station attendant or restaurant attendant takes the card and charges your purchase on it.
- Somebody looking over your shoulder at a store etc when you've got your credit card out to make a purchase.
- Online hackers who steal a credit card database from a credit card handler, bank or credit bureau.
Canadians want to be assured as much as possible that when they use their credit card, that they won't have their identity stolen or people making unauthorized charges on their credit cards.
Canadian credit card users want a credit card from a Canadian bank, department store, etc that is very secure from theft and misuse. They also want to know that their personal information will be handled with the utmost of care by the credit card data handlers.
For more information on privacy and credit cards see:
http://www.ic.gc.ca/epic/site/oca-bc.nsf/en/ca01446e.html
SECURED CREDIT CARDS
Secured credit cards is a completely different topic altogether.
The idea of a secured credit card is one where theperson gives collateral
I pulled this from the Financial Consumer Agency of Canada's website.
http://www.fcac-acfc.gc.ca/eng/publications/CreditCardsYou/SecuredCreditCards_e.asp
How Canadian Secured Credit Cards Work
Most credit cards offered to consumers are considered unsecured. This means that the consumer usually doesn’t have to make a security deposit to obtain the card. Unsecured credit cards usually include standard, gold and platinum (both low-rate and regular-rate), retail credit cards and charge cards.
What You’ll Need to Obtain a Secured Credit Card
To obtain a secured card, you’ll need to deposit a sum of money with the credit card issuer. Depending on the credit limit you request, the required security deposit for a secured card can range from a few hundred to several thousand dollars.
As well as the security deposit, you may be charged a one-time “set-up” or application fee. Before you apply for a secured card, be sure to ask the credit issuer whether you will have to pay a fee and whether it will be refunded if your application is turned down.
Your credit limit is normally set as a percentage (usually 100 per cent or more) of your deposit. For example, if you provide the credit card issuer with a deposit of $500, you may be granted a credit limit of $500 or more. If you don’t make your credit card payments, the credit issuer may use your deposit to pay down your credit card balance.
However, making all your credit card payments on time will help you build a credit history or rebuild a poor credit score. Once your credit score is considered satisfactory by a credit issuer, you may be eligible for an unsecured credit card such as a low-rate or regular-rate standard card. At this time, the security deposit may be returned to you if you decide to close your credit card account after paying off the entire balance.
Interest Rates and Other Fees That May Apply
Secured credit cards normally have a higher interest rate than unsecured cards. Secured credit cards also usually have monthly or annual fees and, like other cards, have service fees associated with some transactions (for more details, see the Service Fees on Credit Card Transactions comparison table included in this kit).
Interest and Insurance on Your Security Deposit
Most secured credit card issuers will pay you interest on your security deposit.
The financial institution that holds your deposit is either your credit issuer (if it accepts deposits), or another financial institution chosen by the issuer. No matter who holds your security deposit, check with your card issuer to see if your deposit is insured with the Canada Deposit Insurance Corporation (CDIC) or a provincial deposit insurance corporation. Every province also has a deposit insurance corporation that protects deposits held at the financial institutions it regulates.
CDIC insures deposits (up to a limit of $100,000) held in financial institutions regulated by the Government of Canada. This protects you if the financial institution holding your deposit declares bankruptcy. For more information, visit CDIC’s Web site at www.cdic.ca or call CDIC toll-free at 1-800-461-2342.
I can see why there would be confusion with the terminologies Canadian secure credit cards and Canadian secured credit cards. They similar but very different. One talks about the security of personal information and the other talks about collateral given to obtain a credit card.
Click here If you're looking to get a Canadian Secured Credit Card
Capital One Canada Credit Cards
