Secured Credit Cards Overview
Build credit with cards backed by a security deposit
What Are Secured Credit Cards?
Secured credit cards require a refundable security deposit that typically becomes your credit limit. They're designed for people building or rebuilding credit.
How They Work
The Deposit
You make a deposit (usually $200-$500) that serves as collateral. This protects the card issuer if you don't pay.
Credit Limit
Your deposit typically equals your credit limit. Some cards offer higher limits than your deposit after responsible use.
Getting Your Deposit Back
You'll receive your deposit back when you:
- Close the account in good standing
- Graduate to an unsecured card
- Pay off and cancel the card
Benefits of Secured Cards
- Easier approval with poor or no credit
- Build positive payment history
- Report to all three credit bureaus
- Opportunity to graduate to unsecured cards
- Access to credit while rebuilding
Key Features to Look For
Reports to All Three Bureaus
Essential for building credit. Verify the card reports to Equifax, Experian, and TransUnion.
Low Annual Fee
Look for cards with no annual fee or low fees ($25-$39 annually).
Graduation Path
Choose cards that offer a path to upgrade to unsecured cards and return your deposit.
Minimum Deposit
Lower minimum deposits ($200 or less) make cards more accessible.
Top Secured Card Features
- Reports to all three bureaus
- Automatic graduation review
- Cash back rewards
- Credit limit increases without additional deposits
- Free credit score access
- Mobile app for easy management
Common Misconceptions
"Secured Cards Don't Help Credit"
False. Secured cards build credit just like unsecured cards when used responsibly.
"You Lose Your Deposit"
False. Your deposit is refundable as long as you pay your balance and close in good standing.
"Secured Cards Have High Interest"
While rates can be high, it doesn't matter if you pay in full each month.