For example, an unsecured credit card may offer zero or low interest for an initial time period and then revert to a normal or high interest rate. However, there will be an account set up fee, program fee, annual fee, monthly service fee, and additional card fee that may apply. It is very important to read all the terms and conditions before signing up for these unsecured credit cards. Many of these high fees are applied the instant you get approved for the cards, and they can add up to hundreds of dollars.

A typical bad credit card that is unsecured may offer a low initial interest rate of 9.9%, and charge 19.9% and a fee for cash advances, plus a $94 annual fee, a $48 program fee, an $84 annual monthly service fee that is charged at $7 per month, and $20 per extra card. Fees are charged immediately, and you could be at your low $250 credit limit before you even charge on the card! There are high late and over the limit fees, and other fees, so it is very important to read all terms before you apply for any unsecured credit card.

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A secured credit card can be used just like a regular credit card. You will receive a bill each month. The balance does not have to be paid off each month; you are given the option of carrying the balance and paying interest on it. This can be done as long as you pay the minimum payment required each month and your balance does not go over your credit limit.

If you have no credit or damaged credit, a secured credit card is a good option. It is best to only charge on this card as much as you can pay off at the end of each month. Regular payments that are made on time are very important when trying to establish or improve credit.

Benefits of a secured credit card:
1. Establishes credit.
2. Improves credit.
3. The credit limit cannot be exceeded.
4. Useful for items that require a credit card.
5. Deposit applied to credit card reflects in the interest rate.

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