It doesn’t take much to mess up a good thing where your personal financial life is concerned. Consider what would happen if you missed just one payment on your credit card account. You’ll likely end up paying more in fees and interest charges for your mistake and you could very well hurt your credit score, a long-lasting consequence that can have a negative impact on your financial life.

For some people, several mistakes have cost them dearly. They end up unable to secure a credit card due to problems in the past paying their bills. This situation can really happen to anyone at any time. Job loss, simple mistakes, and sudden emergencies can all derail an otherwise great financial record. When things go south financially, it is most important to keep looking ahead to right the wrongs as soon as possible.

Alternative Credit Options

When you are no longer eligible for a traditional credit card, there are alternative methods for reviving your credit score and turn your financial life around. One such method for improving your credit track record is by applying for a secured credit card, sometimes referred to as a “second chance” credit card.

A secured credit card differs from a traditional, unsecured credit card in that customers are required to make a cash deposit into their account that will essentially serve as their credit limits. As an example, a secured credit card company may require a minimum deposit of $500 to activate the card. That amount of money, minus fees, would become the credit limit of the card. As transactions are made on the secured card, the cardholder must make repayments each month to maintain the $500 deposit.

These secured credit cards can give consumers with credit problems in the past a second chance at rebuilding credit. The key is to find secured credit cards where activity is reported back to the credit reporting bureaus. Not all secured cards will make such reports so you’ll need to first compare card offers carefully.

Downside of Secured Credit Cards

If you are unable to get a traditional credit card due to bad credit scores, a secured card may be the first step to getting back on track. There are some issues with secured credit cards that may pose an issue for some consumers.

The first issue is the cost of the card. As secured credit cards are being marketed to consumers considered a credit risk, the fees associated with the card may be higher than you are hoping to pay. When you make your initial deposit, you will have to pay a fee for activating the card, for making purchases, and for other transaction activity. These fees differ with each credit card so you will need to do some homework to find a secured credit card with the most reasonable fees.

Another potential downside of secured credit cards is the necessity of making a cash deposit into the account before you can use the card. Many of the card providers will require $500 or more initially and coming up with that “extra” cash may not be easy for those with credit issues.

The good news is that with regular payments and responsible spending habits, a secured credit card can bring your credit history back up to par. This opens the door for better rates on other financial products and the potential to qualify for a traditional, unsecured card in the near future.

Philip Taylor blogs about making more money in half the time at