Whether you have no credit or want to rebuild a bad credit report, using secured credit cards can help.
However, you'll need some cash to begin the process.
What are secured credit cards? Secured credit cards are cards that require you to deposit a certain amount of money into a checking or savings account to use as security against the card.
They look and act just like a regular credit card, and with time, can lead to unsecured cards with increased limits.
They offer many of the same benefits as unsecured cards.
You can use them for anything that requires a credit card.
You can use them to make purchases, make hotel reservations, serve as car rental reservations, etc.
The difference is that you will be charging your own money, instead of borrowing against a line of credit authorized by the financial institution that issued you the card.
In other words, they are loans made against the money in your account.
Typically secured card issuers will ask for 100% - 200% of the desired credit limit upon approval.
Before signing up for a secured card, read the fine print.
Make sure that your secured card issuer reports to the three major credit bureaus every month.
Find out how your account will be reported to the credit bureaus.
If it will be reported as "secured" it's a better idea to choose another card issuer that will not report your account in this manner.
Secured cards can be a relatively easy way of either establishing or rebuilding your credit.
Once you start using your secured card you will be rebuilding your credit record.
Make sure you use it responsibly and then make payments on time.
Making and paying off purchases each month can have a positive impact on your credit report.