slideshow

You read that correctly (shake any strange mental image you have out of your head). Secured credit cards are growing faster and faster in popularity these turbulent economic days. The contributing factors seem to be the perpetual wave of mortgage foreclosures and all too many credit card defaults. Add that with a 31 percent jump in personal bankruptcy filings last year and it becomes no small wonder industry watchers expect secured cards to only grow. many card holders are also drowning in credit debt due to the economy and inflation at a all time high.

Secured credit cards can help someone with a previously smeared credit history regain a positive standing, in the eyes of creditors. A user goes about and puts a select amount of money on their card. That money then becomes their new credit limit. If a user steps over that the penalties are typically severe.

Just using the card as responsibly as any credit card user, secured or unsecured, should be enough to put the user back into good favor, where someday they may go about and open a new, unsecured account.

“It's like a bike with training wheels," said Martha Doran, a professor at San Diego State University in an article with MSNBC.

All this aside, secured credit cards are a very small fraction of the present credit card market. And they, too, come with their downsides. For instance, some cards come with very, very high fees. If these fees surpass the credit limit, the result would be painful to your personal credit history.

High interest rates are the norm, usually in the ballpark near 20 percent. That’s enough to keep some people away, for sure. In addition, the low credit limits do make it much easier to get the over-limit charges, if you’re not observant and some secured cards begin charging interest right after a purchase, offering no grace period like other cards do, to pay off their balance first.

Despite this, consumers are still expected to remain seriously interested in secured credit cards, in the midst of all the other credit card offers out there. But not just them- banks are taking notice, too. Like the Public Savings Bank of Huntingdon Valley, PA. They started off with a secured Visa this past April. The card comes equipped with a $79 activation fee, but no other upfront costs. It charges interest at the prime rate plus 7.99 percent. As of right now, it is at 11.24 percent.

"We think that the timing is right for a card like this, because of the economy and the slowdown and the credit contraction," said Executive Vice President Bob Wexler to MSNBC. Apparently, they are not alone in their thinking.