Editor's note: This is a transcript of the audio file.

Is a secured credit card right for you?

I'm kristin arnold with the Bankrate.com Personal Finance Minute.

A secured credit card is where you make a cash deposit that serves as collateral. The amount of the deposit is typically – but not always – equal to the credit line you receive. Consumers often turn to secured credit cards when they are looking to establish or rehabilitate their credit ratings.

When shopping for a secured credit card, you'll want to verify that the card issuer will report your timely payments to the 3 major credit bureaus. And watch out for fees, avoiding application fees altogether and even trying to stay away from annual fees. A recent Bankrate.com survey found nearly half of secured credit cards do not charge annual fees.

Always look for the lowest interest rate, but better yet, pay the balance in full each and every month. You don't need to carry a balance to build your credit.

For more on secured credit cards , check out the recent survey of secured credit cards at Bankrate.com.

I'm Greg McBride.