If so that could be the main reason you are looking at applying for a Secured Credit Card. There are alternatives, such as pre-paid credit card or you should perhaps first look at ways to improve your credit score.

If you have problems with poor or bad credit I recommend you take a visit to BlemishFreeCredit and explore ways to improve your credit score

A Secured Credit Card is linked to a bank account held by the card holder. This allows the credit card company to deduct payment from the account if the cardholder fails to pay. To apply for a secured credit card, you must deposit an amount of money at least equal to the credit limit of the card into a bank account. This account is usually separate from any other accounts the consumer may have, usually a deposit account.

So, if you have money for the deposit why bother obtaining credit?

Secured credit cards are often offered as a means of rebuilding a person's credit. A person with a poor credit history or no credit history may find other types of credit cards are unavailable.

How do they work?

A secured credit card holder is still expected to make regular payments, as with a regular credit card, but should they default on any payment, the card issuer has the option of recovering the cost any purchases out of the deposit. The advantage of the secured card for an individual with negative or no credit history is that most companies report regularly to the major credit bureaus. This allows for building of positive credit history provided they are used wisely.

The deposit will not be debited simply for missing one or two payments. However the Secured Credit card account will continue to accrue interest and fees, and could result in a balance which is much higher than the actual credit limit on the card.

Conclusion

Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available and this allows for building of a positive credit history provided they are used wisely.

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Best Regards

Dave Nichols