Green Dot, which already offers prepaid debit cards to consumers, will now offer secured credit cards. The cards are designed to help build up a credit history for consumers who do not have one, and for those who need to repair damaged credit. Consumer deposits will back the cards. After the collateral deposit is made, the Green Dot card will work in the same way as a traditional credit card.
Green Dot is not the only company offering this type of card. Discover Financial Services has a secured card, and many other credit card issuers offer cards to consumers who do not have strong credit. Green Dot's card, like many of the others, has a 19.99% interest rate, which is higher than some. It also includes a $39 annual fee. Credit lines will start at $200 and top out at $1,000. Customer's payment history will be provided to credit bureaus, helping to build up their credit.
According to Lewis Goldwin, head of the company's bank unit, Green Dot has spent some time preparing its credit card offerings. He believes that there is a need for this type of credit card and hopes consumers will see beyond the controversy affecting many other prepaid card companies.
If you want more credit, check out MoneyTips' list of credit card offers.