Standard credit cards have credit limits and are issued based on your qualifying credit score and income level. Secured credit cards are different in that you must fund the account and credit limit yourself. The deposit you make therefore secures the card/account. Essentially this means you are borrowing/spending against your own money, but the benefits of this type of credit card account for people with bad credit are significant.

Shopping for a secured credit card involves doing thorough research. For example, a secure credit card with a $200 limit requires you to deposit $200 into the account in order to open it.

Some secured cards charge annual or processing fees right off the top of your initial deposit, however. This means your $200 deposit/credit limit is instantly reduced by whatever fees the card issuer charges you. 

Repairing and rebuilding your credit are quite similar processes.

How secured credit cards help improve your credit is by allowing you to use your own money to make purchases and pay off the debt in monthly payments the same way you would a standard credit card. 

After you make six to twelve months payments on time your account will be reviewed.

After a positive review it is possible for your credit limit to be increased and interest rate reduced without requiring you to make additional secured deposits. A few of the best, secured credit cards available include:

• OpenSky Secured Visa
• Discover It.
• Capital One MasterCard.