Most credit cards are considered to be a form of "signature" loan: You sign the application, agree to the terms, and are extended credit based on your signature, not on collateral or other security. But if you have a poor credit history, many lenders are unwilling to extend credit based on your signature alone, which can make it hard to rebuild your credit by maintaining accounts and payment histories in good standing.

What can you do? Consider a secured credit card: You provide the lender with a cash deposit and in return you are issued with a credit card. The credit limit on the card is the same as the amount of your deposit. Then you can use the credit card as you would a conventional credit card. The lender faces little risk, since if you don’t make payments on the card, they can use your deposit as collateral. And over time you can build up a positive record of on-time payments and responsible use of debt – and improve your credit history and credit score.