What is the difference between a secured credit card and an unsecured credit card?
A secured credit card means that a security deposit account is needed to secure the card. The security deposit will equal your credit limit. This amount allows to build your credit history while enjoying all of the benefits of a credit card. An unsecured credit card is set in accordance with your credit history. There is not a security deposit required for this type of card. As your history changes so will your credit limit. Annual Fee: Some issuers charge an annual fee for the privilege of using their card - typically between $15 and $100 a year. Sometimes this fee can be waived if you use your card frequently, or if you transfer a certain balance to the card or even for asking! If you are planning on paying your bills within a month or two from the date you make purchases, you should probably be looking for a card with NO annual fee. The total annual cost (interest charges + annual fee + any other charges) is ultimately what matters.

Information on Repairing Bad Credit History Always keep credit information current by obtaining copies of credit records at least once yearly after resolving problems. This will also act as an alert to any credit fraud that may be occuring.

After obtaining a credit file and starting the dispute process, evaluate your financial situation. If you find that you are unable to make at least the minimum payment on outstnading accounts, immediatley contact creditors. Many will appreciate your willingness to pay and will attempt to help set up plans for payument. Do not make promises which cannot be kept. A small payment is preferable to a large payment that never arrives. Sometimes this contact can be enough to reduce payments and forestall more severe measures. If not, a more serious step must be taken.

This next step is to consult a credit counseling agency. These organizations are invaluable in solving financial problems. They are staffed with trained individuals experienced in the credit field. Do not confuse these agencies with the commercial "credit repair" companies who claim that, for a fee, they will wipe your credit slate clean. Don't be fooled. There is no legal way to do this. Any procedures they might use are available to you free of charge.

A counselor at a credit counseling agency will take all the information concerning your financial situation, evaluate it and decide the best strategy to use in solving your problem. You will be asked to abide by certain rules while receiving services. These rules may include closing charge accounts and canceling credit cards or paying your bills through the agency. It is to your advantage to abide by the rules as these agencies are perfectly safe. They are non-profit and will not ask you to pay for their services. Although the repayment period may be long, do not accept offers of credit while receiving services from these organizations since this will only delay the process and could possibly result in you being refused further services.

Here are some suggestions for maintaining good credit after the credit repair period is over:

• Live within your means. Do not return to the bad financial habits that resulted in credit problems the first time.
• Create a budget. Know where all your money is going. Small purchases can add up and make it difficult to meet important obligations. Keep records of all money spent for one month. This detailed record will show where spending cuts need to be made. It will also alert you to any spending problems.
• Plan for financial emergencies by depositing a fixed amount of income to a special "emergency" account. Do this as if paying another monthly bill. This money will insure that emergencies such as illness or loss of job do not catch you totally unprepared. Try to accumulate enough in the fund to pay bills for at least six months.
• Finally, make a conscious effort to be "money smart". This will be a lifelong task but will eliminate the chance of falling back into the bad credit trap of the past.