What are the Downsides of Using Secured Credit Cards?

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What are the Downsides of Using Secured Credit
Cards?
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• Most online resources today talk only about the
  beneficial features of secured credit cards. But
  are there downsides to managing these lines of
  credit? And how can cardholders, like you, avoid
  or properly deal with them? To know the answers
  to these questions, we suggest that you pay close
  attention to the paragraphs below. Here are 3
  drawbacks and how you should deal with them.

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A low spending limit.

• Most secured lines of credit tend to have low
  spending limits. The reason for this is that the
  credit limit set on these card programs usually
  depend on the security deposit submitted by card
  applicants. And since a lot of prospective
  guaranteed approval store credit cards holders
  wish to curb their spending habits, most of them
  make just the minimum deposit required by their
  target card issuers.
• Now, how should a cardholder, like you, deal with
  such drawback? If you want a credit card with a
  relatively high spending limit then, you have to
  look for a card company that lets you decide on
  how big or how small your initial deposit will
  be. That way, you can simply provide a lump-sum
  for you to enjoy a high credit limit, which would
  allow you to charge huge purchases and bills on
  your secured line of credit.

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Payment delinquency can inflict further damage to
your credit history

• especially if you have a low credit score. Since
  most issuers of secured cards provide timely
  reports of cardholder activities to the three
  major credit bureaus then, you can expect that
  skipping on just one bill can have an immediate
  and huge impact on your credit history. In fact,
  it can pull your score down and further limit
  your chances of qualifying for unsecured credit
  cards.

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• This means that you should resolve to always keep
  up with your credit card bills, no matter what.
  See to it that you pay your credit card charges
  in full and on-time, each month. That way, you
  can cause gradual improvement to your credit
  history until you are able to fully recover your
  financial health.
• Making on-time and complete payments also has
  financial benefits. By paying your credit card
  balance in full, you can avoid incurring huge
  interest charges. At the same time, by making
  early or on-time payments, you wont have to pay
  late payment penalties and surcharges.

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Closing down an old secured credit card can cause
your score to drop.

• This is especially true if you used a secured
  line of credit to jump-start your credit profile.
  After all, a bulk of your credit history will be
  erased from your credit records should you decide
  to close down your old account. So, what should
  you do then?
• Well, you can simply keep your credit card
  active. Charge small purchases on your card, like
  groceries and some of your bills and make sure
  that you pay them immediately. And make sure that
  you dont spend beyond your credit limit or else
  your credit rating might suffer. One thing that
  can help you in this matter is to check the
  available funds you have on the card before you
  use it to pay your bills or purchases.