Secured Credit Card

A “secured credit card” is a credit card used to build a good credit record for people with a damaged or poor credit score or for people with little or no credit history. A secured credit card requires a security deposit in order to be able to establish a line of credit. Typically, the line of credit you qualify for will be equal to the amount of money deposited with the bank or financial institution that issued the secured card.

For example, you can open a $500 secured card line by depositing $500 in an account associated with the credit card. Many secured cards charge fees for opening the account, and then charge fees for accessing your funds. In some situations, a prepaid debit card with a credit builder option may be a less expensive way to build credit.

Secured credit cards are also referred to as “prepaid credit cards“.

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