Bad credit? Make a secured credit card work for you



By Virginia C. McGuire

If you’re trying to build or rebuild your credit history, secured credit cards can be a great tool. Secured cards are valuable mostly because they can be a steppingstone to traditional unsecured credit cards, which are more likely to offer rewards or lower interest rates. Using a secured card wisely can help you make the transition to an unsecured card sooner.

Here’s how to make sure you put a secured card to good use.

Understand how secured cards work

Whenever you buy something with a credit card, the card issuer is essentially lending you the money to pay for your purchase. Your signature on the credit card slip is a promise to repay that loan. This is why you need decent credit to qualify for most credit cards: If you have a low credit score, or you don’t have a credit history at all, card issuers won’t have much confidence that you’ll pay back what you borrow. So they’re unlikely to approve you for a card.

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