If you have no credit history or are trying to repair your credit standing, a bank-secured credit card is your best option. By ’securing’ your credit with your own savings account, you can have a fully functional credit card and be sure that you have the ability to pay whatever balances you accumulate. Read on to find out more.

This kind of card looks and works much like a regular credit card, but uses your bank deposit as a guarantee or collateral. Should you be unable to pay the amount due on time, for example, the bank can apply your deposit to your outstanding balance.

A bank secured credit card is perfect for consumers who do not qualify for regular credit cards either because they have no credit history yet, or because they have gone bankrupt and therefore have undesirable credit ratings. Having a bank secured credit card shows the bank that you are financially capable of paying monthly dues. If you use the card responsibly, the bank may eventually provide you with an unsecured credit line.

Because you will only get to charge an amount that corresponds to your deposit, you can be sure that you won’t overspend. If you find yourself unable to pay the balance, for example, the bank simply deducts the payment from your savings account. With a bank-secured credit card, there’s no risk of incurring debts.

But like all other credit cards, the disadvantages of a bank-secured credit card crop up when you use it irresponsibly. If you do not pay on time, for example, you will be faced with high interest fees and late payment charges.

Most bank-secured credit cards only allow limited transaction frequencies, which means you can only use it a specified number of times. The banks use this measure to protect against overdrafts. It is also quite difficult to close a bank-secured credit card - you will not get your deposit immediately. The bank will keep your money for a few more billing cycles in order to make sure that no sketchy charges were made.

With everyone spending more than they save, it’s no wonder that credit card debt is at an all time high. But just because everyone else is in trouble doesn’t make it a non-issue. Credit card debt not only ruins your credit score, but it can also hurt your future and your sense of security as well.

The precious credit score

The newest number that everyone is talking about is their credit score. With a good credit score, you can get better credit card offers, better interest rates for houses and cars, and you can get bigger loans than others with lower credit scores. And the truth is that most people don’t know what their credit score is.

When you carry high balances on your credit cards, these balances are reported back to the credit reporting agencies that in turn make adjustments to your credit score. If you have large balances, it looks like you’re living beyond your means and thus you’re not a good candidate for future loans and your score is lowered.

If you have low balances (less than 50% of the limit) and pay your bills on time, you will raise your credit score.

Making larger investments

If you dream of owning a home or a new car, you need to pay down that credit card debt. In order to get these kinds of large loans, banks need to know that you are responsible with money and will be able to pay off your loan as you promise. By having credit card debt, it seems as though you aren’t able to live on what you can afford and thus will probably not be reliable with paying off your loan.

And if you do get the loan, the interest rate is much higher for the borrower that has credit card debt. In case you can’t pay off the loan, the bank will want to make more money off you when you do make payments.

Your sense of security

No one needs the added stress of whether or not they can afford to pay the minimum balance on their credit card. And with a little planning a discipline, credit card debt can be managed and eliminated.

You can start with cutting up those credit cards and start using ‘real’ money to make way for the future that you deservehouses, cars, and a good night’s sleep.

Beth Derkowitz recommends Find Credit Cards for finding a BankFIRST credit card that’s tailored to suit your financial needs.

Credit card debt is way too easy to get into these days. It seems like every time I check my mail there is at least one or two pre-approved credit card applications. It doesn’t matter if you have good credit, bad credit, or no credit; they still send bushels of these offers everyday. You’re in college and you have expenses and no money so you grab one and sign up. It’s easy and only takes a few short minutes and you’re approved but little do you know you just picked up a loaded gun!

It’s shiny, small, and so accessible when money is tight. So much so that we don’t feel like we are spending real money until the bill comes, and then it’s too late.

When establishing good credit, one of the things we’re told to do is to get a credit card and then use it to spend wisely. Having a credit card is important to having good credit but it’s not everything. A large part of your credit score is comprised of utility payments, car payments, and other debt like loan payments. Your credit card is only a portion of a bigger picture that makes up your credit score. The problem is that there are always going to be times when credit is necessary and at some point you are going to have to take that plunge. Ever want to rent a car? Has your car ever broken down suddenly and you realize you have no cash to fix it? These are just 2 of millions of scenarios where credit is good as well as a necessity.

Experts advise us to pay our bills on time and not to exceed the credit limit. More specifically to avoid accumulating credit debt only spend what you think you can payback that same month and try not to carry a balance. Not only does that improve your credit, it saves you a lot on interest. However, no one really talks to us when we get that first card about how easily and quickly we hit that limit, or how easy it is to miss that first monthly payment. Once you get behind it can be impossible to catch up. Oftentimes, credit cards come with introductory interest rates that are nothing or very low. If you miss a payment suddenly you find your paying 21% interest on a payment you already cannot afford and on top of that you’re getting charged late fees! Before you know it, you are getting bad reports on your credit reports for credit card debt on a card you got for emergency purposes in the first place.

Unfortunately, when times are hard, abusing credit cards is all too easy. When the economy is bad and cash is tight, you might find yourself putting your daily living expenses on your credit cards because you do what you have to do to get by. When you are not making your payments, the credit card companies do inquiries to verify your address or other information and every time someone makes an inquiry on your credit report, it makes you look like even more of a high risk. All the credit card debt on your report, even if some of it is good, can make you look high risk for future car loans or mortgages. Even worse a bad credit report can keep you out of rental apartments or from getting a job that requires a background check.

As tempting as it is to pay with plastic, choose the “debit” option next time and keep your future in mind. It’s normal to risk it all when times are tough, but doing so creates more problems later that can take years with a credit counselor to fix and you end up paying triple what you put in. Remember when your at the register ask yourself some very real questions about what your need and what you want. Think ahead about what your budget is and be realistic when formatting it. Remember to account for food, gas, a night out with friends, and most importantly try your best to save money to prevent the emergency credit card swipe. Build your credit slowly by making small purchases and paying them off every month. In the end you’ll thank yourself from avoiding the stress of bills you cannot pay back. You’ll thank yourself in the future!

Jason Jell is the editor and webmaster of http://www.internetcreditcardlist.com A site geared towards providing people with clear concise information about credit cards and credit card offers.