(MONEY Magazine) – IF YOUR CREDIT HISTORY IS BLEMISHED or nonexistent, you may need a secured card--a MasterCard or Visa that requires a security deposit typically equal to the credit line, usually a low $250 to $500. A secured card gives you a chance to establish a good credit record by paying your bills on time--generally after 12 to 24 months if you had no credit, 18 months to three years if you have a bad credit history.

Increased competition has made secured cards a better deal than in the past. Offerings vary widely. Our advice:

BEWARE OF ISSUERS THAT BLOW YOUR COVER. If the card in your credit record is flagged as secured--as they are at Bank One, People's Bank and Wells Fargo--you may still have a tough time getting approval for other credit. "The benefits of a secured card depend on no one knowing it's secured," says Ruth Susswein, executive director of Bankcard Holders of America in Salem, Va.

MAKE SURE THE ISSUER REPORTS YOUR PAYMENT RECORD TO THE THREE MAJOR CREDIT BUREAUS--TRW, Trans Union and Equifax.

NEVER PAY AN APPLICATION OR "PROCESSING" FEE. Some issuers, such as California Commerce Bank, will charge you $20 or so just to apply for a card.

SHOP AROUND FOR THE BEST INTEREST RATE. While it's usually better to pay in full, future lenders will better see that you can "handle debt" if you carry a slight balance each month. A little comparison shopping could save you plenty.

DON'T PAY A STEEP ANNUAL FEE. Avoid paying much more than $35, the national average for secured cards.

GET THE CREDIT YOU DESERVE. Your line of credit should be at least equal to your deposit, but look for cards offering more. First Consumers National Bank in Oregon (first-year fee: $19.50, $39 thereafter; 19.5% variable rate; minimum deposit $100; not available in North Carolina or Vermont; 800-937-3795) offers a secured MasterCard with a limit of 150% of the deposit, up to $2,500 in unsecured credit.

DEAL ONLY WITH BANKS. With so many dubious outfits eager to prey on desperate borrowers, it pays to check out Bankcard Holders of America's list ($4 per list; 524 Branch Dr., Salem, Va. 24153; 703-389-5445) or CardTrak's $10 Secured Card Report (800-874-8999).

--K.H.