Most people think that if you have less than perfect credit then there's no way you could ever get another credit card. That sort of thinking is only half true though. Most large banks might not be willing to work with you if you have bad credit, but there are plenty of smaller banks, online offers and local credit unions that might be a better option for you and offer some hope.

Conventional wisdom states that consumers with bad credit should get a secured credit card if they can't qualify for anything else. This might be a good option but has some drawbacks. But first, you should understand how a secured credit card works. Basically, when you open a credit card account with the bank, they want to be sure you're not too much of a credit risk, hence the fact that they check your credit report and such.

So for people with bad credit (and presumed to be more of a risk) the bank wants some added security. What many banks offer these types of consumers is a secured credit card, where the customer also maintains a savings account with the bank with a certain balance. Then, the customer gets a credit card that can be used just like any standard Visa or MasterCard, but the credit line is based on how much money is in the savings account. The credit line might be the entire amount of what is in savings but more likely it will be some percentage of that.

The banks feel safe because they can always get back whatever money is due to them if you're unable to pay them back (by pulling money from the savings account). You benefit because you're able to have all the convenience and security that comes with holding a credit card.

However, the problem with secured cards is that you have to maintain that savings account (or in some cases, some other form of collateral). Also, your credit line is limited based on how much collateral you can provide. So if you don't have much cash on hand or something else of value to use as collateral, this option can still leave you in a bind.

What most people don't realize is that there are several lenders that offer unsecured credit cards, even to people with bad credit. It's true that the rates might be a bit higher than your standard credit card, but as a short-term solution while you re-establish your credit, these can be a good option, at least for some people. You get all the benefits of having standard Visa or MasterCard that can be used nearly anywhere, don't have to come up with cash or other collateral to determine your credit line, and often times there are very few hoops to jump through in order to qualify.

Whichever route you choose, be sure to responsibly manage your new credit line. Use it to pay for some periodic bill, maybe a monthly phone bill or something similar. By consistently showing activity on the card and paying it off on time, you're showing lenders that you're less of a credit risk for future loans. And by paying it off in full every month (or every other month at the most), you won't be impacted heavily by the higher interest rate, no matter what rate the lender sets.