Credit: Rebuilding Your Credit
A secured credit card is backed or secured by a cash deposit made by the card holder to the credit card issuer. A secured credit card looks just like and can be used just like a regular credit card. If you have a problem getting a regular credit card, a secured card can help you build up your credit history because it is reported to the credit reporting bureaus, as is any card.
This is how it works: You open a savings account with a minimum deposit. That deposit serves as the guarantee for your credit line. You will be awarded a line of credit worth between 100 and 300 percent of the deposit (on a $400 deposit you would have between $400 and $1200 worth of credit). You will pay interest, of course, and may also have to pay an application fee and/or an annual fee. Some programs will pay interest on the cash deposit. Check the costs carefully and make sure you know how much credit your security deposit secures.
Bankrate.com (look for link to secured credit cards using its credit card search feature) -- lists banks offering secured credit cards (including a phone number, current interest rate information, the application fee amount and the grace period offered). Another good article on this site: Rotten Deals Target Those with Damaged Credit.
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