Oh, are there still people out there with excellent credit? Yes, there are, but most of the buying public take at least a few bumps to their credit rating. If you have bad credit, you still have credit possibilities. Those bankers are so creative! However, bad credit secured credit cards give you an opportunity to start rebuilding your credit rating. Everyone needs to use credit at some point, if only for convenience. You don’t have to carry large amounts of cash while shopping, or wait for a vendor to accept a check from out of town/area. If you pay off your credit card every month, interest is kept to a minimum and your credit score improves, month by month.

Bad credit risk secured credit cards are designed to keep you on track while you rebuild a good credit rating. Yes, it will cost you in terms of interest, but not so much as to make this proposition a bad deal. Here’s how it works: apply for the secured credit card and deposit the amount you want; that amount becomes your line of credit. Think of it like a savings account that you can only withdraw by paying interest. You can get cash advances and use the card at any retailer that accepts credit cards. There is no ‘scarlet letter’ stamped on the card, marking it as having bad credit. In other words, bad credit secured credit cards work and look just like any other credit card, except it’s not the bank’s money you’re using. It’s your own money!

With that caveat, you have to understand that there is no wiggle room when it comes to going over your limit. Keep close track of your purchases and remaining funds. If you try to go over your limit, the transaction will be declined and you’ll be penalized with an immediate increase in your APR, which, with credit cards secured for bad credit, is usually healthy enough to make things worse. Keep in mind, too, that you really don’t want to spend all your money on a shopping spree. Be careful and set aside some of those funds for emergency use. Although cash advances cost you, it may be a better strategy to take a cash advance amount against the possibility of an emergency situation and use your remaining funds for everyday purchases like gas for your car, kids’ school clothes, and the like. For maximum beneficial financial effect, you should get close to the maximum amount on your secured credit card, without going over! If you get through the month without needing emergency money, use the cash to help pay the balance on your monthly statement. Then start over with a new full month of credit.

Most bad credit secured credit cards come with the condition that responsible use will result in a review of your ‘credit line’ within 3-6 months. The issuing company can increase your limit, with no additional deposit required. If you have been judicious and cautious in using your card, you can ask if you can also get a reduction in your APR.

Naturally, the card issuer is in business to make money, but they also want good, long-term customers. Typically, after a year of timely payments and no over-limit transactions, the card issuer will grant you a true line of credit, with a higher limit.

So now see how to make the best use of secured credit cards for bad credit. All you have to do is be responsible and patient. Good luck!