Restricted cards, or “Restricted Use Credit Cards,” are cards that are issued to people who are unable to obtain a regular credit card due to their poor credit history. These cards typically have lower spending limits, higher interest rates, and a shorter grace period than regular cards.

Restricted cardholders must adhere to more stringent rules and regulations due to their poor credit. The following statement applies only to restricted cardholders and not to regular credit card users:

• Restricted cardholders are required to make timely payments in order to maintain the card’s good standing.

The reasoning behind this statement is that regular credit card users can often make their payments later in the month without any penalties since they have a longer grace period. On the other hand, restricted cardholders must make their payments on time in order to avoid high penalties and keep their card in good standing with their lender.

Furthermore, restricted cardholders may face additional restrictions such as lower spending limits and higher interest rates. These restrictions are put in place to limit the potential for bad debt and to protect the cardholder from overspending.

Finally, restricted cardholders may have their account canceled if they fail to make their payments on time. This is because a poor credit score will reflect poorly on the cardholder’s credit report. Therefore, it is important for restricted cardholders to keep track of their payments and make them on time in order to avoid this outcome.

Overall, restricted cards can be a useful tool for individuals with less than perfect credit. By following the rules and making timely payments, restricted cardholders can begin to rebuild their credit and gain access to regular credit cards.