Typically, the cardholder must store somewhere in the range of 100% and 200% of the total amount of credit wanted. This store is held in a special savings account. Credit card issuers offer this because they have seen that wrongdoings were notably decreased when the client sees something to lose if the balance is not repaid. The cardholder of an anchored credit card is as yet anticipated that would make regular payments, as with a regular credit card, yet should they default on a payment, the card issuer has the alternative of recouping the expense of the purchases paid to the merchants out of the store.
Accordingly if the cardholder puts down $1,000, they will be given credit in the range of $500– 1,000. Sometimes, credit card issuers will offer impetuses even on their anchored card portfolios. The advantage of the anchored card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows building a positive credit history.