Orchard Bank Secured Credit Card

Credit cards are extremely common in the world today, to the point that those without them have become the minority. One of the key points of these cards, however, is that a good credit rating is often required before they are granted. This can create a catch – situation for those who have poor or no credit rating, for although they are one of the most effective ways to raise a poor score, they are often denied to those who need to raise their score the most. Orchard Bank is a financial institution that has taken this into consideration, and Orchard Bank credit cards are designed to the help card applicants raise their score one month at a time.

When looking for a secured credit card, perhaps you have stumbled upon Orchard Bank. They do actually offer a secured credit card and are one of the popular ones that does so.

But before we move further, it might help if you understand some concepts.

What is a Secured Credit Card?

A secured credit card is a type of credit card that requires the card holder to deposit a certain amount, typically 100 to 200 percent of the total credit desired. This type of credit card is often used by those who have poor credit record and want to rebuild it. It’s used by new cardholders to create a good credit history the first time. Most credit card companies offer this type of card for such purpose.

On the other hand, an unsecured credit card is exactly the opposite. It doesn’t require any collateral or deposit. This is because most credit card issuers offer this type of credit card to those who already have good credit background. These cardholders need not provide any security because their good credit history will be sufficient as guarantee.

The Orchard Bank Secured Credit Card

Orchard bank is just one of the hundreds of banks that offer credit cards. They offer two credit cards – the Orchard Bank Classic Card and the Orchard Bank Secured MasterCard.

The Orchard Bank Secured MasterCard was designed to help cardholders establish or rebuild their credit record. The card includes benefits such as low variable purchase APR, waived annual fee on the first year, and minimal security deposit. The details are as follows:

Introductory APR and Duration: N/A
Customary APR on Purchases and Balance Transfers: Variable 7.90%
Default APR: Variable 29.49%
Annual Fee: $35, waived the first year
Other Fees to Open Account: $200 Minimum Security Deposit

Note that the figures above are as of Sept 17, 2009. These are not permanent and might change anytime. To have more updated information, you can visit their official website.

If you want to apply, you can do so online through their website. What you’ll need to do is to complete an online form which would require you to provide personal, address, employment and other information. You’ll have to complete other steps until such time that you reach the stage when you have to read and accept the terms and conditions, and then submit. Note that you need to understand the terms and condition completely to assure yourself of all the benefits and avoid future problems caused by misinterpretation or lack of knowledge.

Orchard Bank credit cards are ideal for those who wish to begin or rebuild their credit rating. The main benefit offered by this institution is the automatic monthly reporting to the three nationally recognized credit bureaus: Equifax, Experian, and TransUnion. By reporting monthly, the continued and on-time monthly payments of at least the minimum payment amount will act to build ratings by increasing the combined score. Ensuring that charges remain within the authorized limit is also a factor in raising scores, meaning that monitoring charges will have a positive effect when it comes to the monthly reporting cycle. However, the cost of these benefits can be expensive, as higher interest rates are inevitable, and in addition to separate charges which may be applied.

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Orchard Bank credit cards can be secured or unsecured, depending on the terms of the application. The term secured means that financial backup is needed before the card is issued, such as a savings account or a prepaid amount given as a deposit to the bank. Unsecured cards, on the other hand, are those that do not require financial collateral, although the qualifications for these tend to be a little more stringent. Both Visa and MasterCard brands are available, but of the two, only the Visa cards are offered as either secured or unsecured. The Secured MasterCard will require a minimum financial savings or deposit of $200.

The Secured MasterCard is best suited for those who need to establish credit, as the financial collateral can ensure against over-the-limit charges and late payments, allowing ratings to be raised each month. The financial collateral also means a lower interest rate, as the issuing institution faces less risk of loss through the failure to make the required payments. The Visa card, on the other hand, is designed for those who are simply in need of raising their score. The interest rate can vary depending on whether a secured or unsecured card is granted, with a secured card naturally carrying a lower rate. An unsecured Visa card will not require a minimum savings or deposit amount, although a processing fee is often added in addition to the higher interest rate. Both the Visa and MasterCard card will also incur an annual fee for the privilege of being allowed to carry it.

Credit cards are generally carried more readily than cash, although those with bad or no credit may find them difficult to obtain. Orchard Bank is a financial institution has taken this into consideration, and in turn, the institution offers a variety of card options for those with bad credit. However, additional costs may apply. The interest rate for secured cards is considerably lower, although financial collateral in the form a savings account or deposit is required. An unsecured card requires no financial collateral, which will carry an interest rate that is considerably higher. In addition, both will incur an annual fee, although this may be waived for the first year. While the terms are not as favorable as those offered to ones who possess a good financial rating, they can be used as stepping stones to begin or re-establish credit, and continued on-time payments can eventually lead to better terms in the future.

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