Why would anyone want to obtain a secure credit card? Many people who are trying to rebuild their credit, either after a bankruptcy or an extended period of derogatory credit, should consider obtaining a secured credit card to two in order to help them improve their credit rating. By obtaining a secured credit card you can reestablish your credit history and work on improving your credit enough so that you can once again begin qualifying for the best rates and premiums for all of your financing needs.

If you do not have any credit cards in your name, or only have one or two, talk to a mortgage professional who is helping you plan your home purchase about whether using a secured credit card would help you qualify for a loan by adding an active revolving tradeline to your credit history. In addition to secured credit card programs, a variety of other options are available to help you build the credit you will need to purchase a home.

Various banks have many offers for their clients to get secured credit cards with them. Some will waive their application fee and/or waive annual fees. Be sure shop around and read the fine print when signing up for a secured line of credit.

Some banks will allow you to secure the credit card with a CD, rather than a cash deposit. You still need to have the money available, but you can also gain interest on that money.

In addition to the general guidelines discussed here, each secured credit card program will have its own specific cardholder terms. You will want to read these terms carefully and make sure you understand them before signing the cardholder agreement.

Generally, a secured line of credit is going to weigh more on your credit score than a non-secured line of credit.

Many banks monitor the payment history on a secured credit card and convert the secured card to a non secured card automatically if all terms are met.

Secured credit cards are secured by money deposited into the bank for the amount of the credit limit. For example if you had a secured credit card with a $300 limit the issuing bank would require you to deposit $300 into their bank. This deposit guarantees to the lender that there will be not profit lost on a account with risky credit.