Secured Credit card...will it help or hurt?

[reereetx]

Hi,

I currently have 2 unsecured cards-one is through Credit One-my limit is $200 and right now I have a balance of $194.  The other is with HSBC (Orchard Bank) limit is $300 and I'm actually over limit right now.  So my balance is $315.  I had sent them a check at the end of May for my June 6th payment (well over a week in advance)...strangely HSBC didn't post it to my account until the next day and charged me a $30 late charge! Either way...I'm maxed on those 2 cards but I'm trying to get them paid off because they are killing my credit score obviously.  I'm disputing some other items on my report as we speak but my question mainly is...I had received a secured credit card in the mail the other day for a $300 limit.  Can someone explain to me exactly how that works and if it will help my score or hurt it.  Would it make more sense for me to just pay $300 towards my credit cards that I have than to put $300 on a secured card?  I'm hoping to boost my score as much as possible before September.  Right now ScoreWatch says my score is 543 and main reason it gives is because of high utl.

[ucibaqt]

As I know it a secured card is a card that you make pay into and then when you use the card the money is deduct from the initial payment you sent in. Similiar to a checking account but with a credit card. With unsecured cards you are borrowing money that you must pay back in the future with interest. I think you should use the 300 to pay down your cards as this will help you debt to credit limit ratio and raise you score.

[JoeBJay20]

Basically a secured CC uses your deposit as your backing for the card as opposed to your credit.  The size of your deposit determines the size of your credit line.  It is reported on your credit reports as a credit card line, there is no reporting of it being a secured CC.  That being said, a secured CC line of 300 dollars is pretty pointless.  You already have two low CL cards, you don't need a third.  The best thing you could do right now is to pay your utilization down, you're over 100% right now.  The quickest and biggest thing you could do to boost your scores is to get your utilization down below 10%.  If you're looking for a third card, a secured line with a prime lender would be in your best interest with your current scores.  You could save up for a sizable deposit to establish a nice CL, and many secured CL automatically go unsecured after a period of on time payments and staying below your limits.