Secured cards

Keep money for the bill as well as the deposit

A secured credit card requires a security deposit. Compare the deposit, fees, and credit-reporting practices together before deciding whether the account fits your needs.

Suppose you provide a $200 security deposit, receive a $200 limit and then make a $50 purchase. The provider still holds the deposit, and you separately owe the $50 purchase balance. The card is not a prepaid account that spends down the deposit. These amounts are an illustration; deposit and limit arrangements differ.

Budget for fees and repayments before setting aside the collateral. Read how and when a deposit can be returned, including what happens if you close the account with money still owed. An account review does not guarantee a move to an unsecured card. Confirm reporting practices too, and use the same on-time payment routine you would use with any credit account.

Trade-offs to notice

• A security deposit does not replace your monthly payments.
• An upgrade or credit-score improvement is not guaranteed.

A practical next step

Check that you can afford both the deposit and monthly payments, then read the reporting and deposit-return terms.

Before you apply

Review the current fees, interest rates, and eligibility requirements on the provider’s website. Browsing a category here does not submit an application or predict a decision.