Unsecured credit cards offer most people a simple means to build up their credit history, since no collateral is required to use it; however, if you do not have good credit, your chances of getting approval on an unsecured credit card are also not good.

A person in a bad credit situation will more likely be able to obtain a secured credit card. These types of cards require the use of a savings account, monitored by the card company, in which a cash deposit is placed to act as a form of collateral on the credit card account.

The payment history on unsecured credit cards is constantly monitored by the three major credit bureaus, however, according to each individual company’s policy some secured credit cards do not report their payment histories to these bureaus.

If you decide to use a secured credit card to raise your credit score, the best move to make would be to pick one that reports its payment history to the credit bureaus. The advantages of this reporting process, most likely will be listed on the credit card application form, if not, then you may want to get in touch with the customer service department of the card issuer to find out more.

Raising your credit score is easy for you to do if you use the secured credit card to buy whatever you may be needing at the time and being sure you are making payments on time.

One notable difference between secured credits cards and unsecured forms of credit cards, concerns default payments; the defaulted payment amount will be taken from the money held in the savings account.

It is easier to get approval for a secured credit card than for other forms of credit cards because there are fewer obstacles in the way. Only two basic restrictions come into play when applying for a secured credit card: first, you must live in the U.S. and secondly, you must be 18 years old or older. You are not subject to a credit check for the secured credit card, because your collateral is the money in a savings account.

Your credit limit is determined directly by the amount of cash deposited into your account; if you want to increase your credit limit, add more money which earns interest as long as there are no defaults on repayment.

The fact that more interest can be earned by adding more to the card’s credit limit, may be one of the biggest advantages of having a secured credit card. This idea is what secured credit cards such an advantage over unsecured credit cards: with limits on funds available for spending, you will avoid the problems created from serious credit card debt.

If you happen to be one of the millions that have bad credit or no credit, a secured credit card may be your best choice; if you use these cards regularly and are able to pay promptly and on time, you will begin to see increases in your credit score and you might be able to qualify for better rates and more options.

Ally Cossgrove writes for the JSNet.org offering credit cards online with great offers including credit cards for bad credit or just visit to read more of Ally’s great articles!

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