What is a secured credit card? - Bad Credit FAQ

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Questions » FAQs » Bad Credit » What is a secured credit card?

What is a secured credit card?

Answered on
Add to Favorites:

Tags: , , , ,

A secured credit card requires a security deposit to act as collateral for the line of credit. They are designed for people with limited or damaged credit who want to rebuild their credit history.

Benefits of secured cards include:

  • People with limited or damaged credit histories can get them
  • Most report to major credit bureaus, so they will help you rebuild your credit history and improve your credit score

Drawbacks of secured cards include:

  • Fees including startup fees, monthly fees and/or activation fees
  • High APRs – it is best not to carry a balance from month to month on a secured card because of the high interest rates

A secured card may be your only option though for getting a credit card and rebuilding your credit. Your initial deposit is usually refundable, and there are secured cards with fair fee schedules and good customer service. Just make sure you do your research to find the one that is right for you.

If you are trying to build a good credit history, make sure the secured card you plan to apply for reports to credit bureaus. And check to make sure the issuer will refund your deposit when you close your account.

All credit cards terms, fees and rates mentioned in this article/post are actual on the posting date. See the current products’ Terms & Conditions on the issuing banks' websites.
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
See if you Pre-Qualify without harming your credit score
For Poor Credit
Easy pre-qualification process which does not affect your credit score
For Bad/Poor Credit
No Annual Fee. See WebBank/Fingerhut Credit Account Terms.
For Bad Credit

Other Questions in
Bad Credit