Credit cards for bad credit play a pivotal role in assisting people to build or rebuild their credit health. Often, people with poor credit scores find it challenging to secure credit or loans from financial institutions. However, credit cards for bad credit, also known as secured credit cards, are specially designed for such individuals, offering a path to better their financial standing.

Despite the daunting term, "bad credit," credit cards for bad credit aren't necessarily threatening. Instead, these tools can be seen as steppingstones towards achieving financial stability. Many reputable banks and credit card companies offer these cards to customers who are willing to make a deposit that serves as collateral. The deposit usually equals the line of credit and acts as assurance to minimize the lender's risk, making this a plausible option for those with bad credit history.

The principal plan for a user of a credit card for bad credit is to display responsible financial behavior over time. This includes making all payments on time, maintaining a low balance, and not incurring any additional fees, which could put a strain on the credit score. These responsible actions will get reported to the three major credit bureaus in the U.S: Experian, Equifax, and TransUnion. The heightened visibility directly leads to improved credit over time with consistent and responsible use.

Notably, credit cards for bad credit also provide a learning opportunity for customers. They can get accustomed to the terminology and functioning of credit, understand statements, interest rates, late fees, etc., without getting too overwhelmed. It’s effectively a safe space to learn and grow fiscally, without the risk of getting into severe debt.

Furthermore, users must be diligent when using these credit cards, as they often come with higher interest rates and additional fees, in comparison to conventional credit cards. These factors can directly impact the credit score if not taken into consideration. Also, not all issuers who provide these cards report to credit bureaus. Hence, potential applicants should ensure that the issuer reports to all three credit bureaus to be confident that their credit-building efforts are recognized.

Credit cards for bad credit serve an essential function by providing a way for people with poor credit scores to improve their financial standing without exacting penalties for past mistakes. These cards can be a crucial stepping stone in the path of establishing or reestablishing good credit and therefore, a solid financial future. By using them responsibly, individuals open the door to higher credit scores, borrowing potential, and consequently, to greater financial freedom.