Secured Credit Card

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Secured Credit Card

Secured credit card is a credit card which has a cash deposit as collateral. Secured credit cards are designed for people who cannot qualify for an unsecured card. There might be many reasons for not qualifying for a normal credit card, but the most common are non-existent or short credit history, past credit problems and bankruptcy. The secured credit cards require deposit because the consumers that apply for them are usually high credit risk and the credit card issuer needs a security to cover that risk.



Secured credit cards are frequently used by people with damaged credit to rebuild their credit history and improve their credit score. Even though the card is secured by a deposit, the credit card holder still needs to pay all their credit card bills on time in order to improve their credit history.



Different banks required different deposit for secure credit cards, and the credit limit of the secured card is set as a percentage of this deposit. You can usually get 100% of your deposit a s a credit limit, but sometimes the card issuer might give you a credit limit lower than your deposit.