How Secured Credit Cards Help Build Credit
Secured credit cards are built around a refundable security deposit. This explainer covers deposits, credit limits, reporting, upgrade paths and how issuers evaluate account behaviour — educational only, not personal advice.
Explore the Credit-Builder hubWhat Is a Secured Credit Card?
A secured credit card requires a refundable security deposit, which acts as collateral for the issuer. The deposit usually equals the credit limit, although some issuers offer higher limits after account review.
From a documentation perspective, secured cards behave exactly like normal credit cards at checkout: they run on the same networks, follow the same authorization steps and use monthly statements.
How Deposits and Limits Work
Issuer documentation typically highlights:
- Deposit amount – typically \$50–\$500, held as collateral.
- Credit limit – often equal to the deposit, sometimes reviewed after on-time payments.
- Reporting – many issuers report to major credit bureaus monthly.
- Refund conditions – deposit may be returned when upgraded or account is closed in good standing.
Secured cards are mainly used by people establishing or rebuilding a credit file, but the mechanics are identical to normal credit cards.
Fees, APR and Account Requirements
Fee schedules for secured cards often mention:
- Annual fees – not universal, depends on product tier.
- APR – standard purchase APR applies like any credit card.
- Deposit return rules – timing and conditions for refund.
- Upgrade criteria – number of on-time payments, utilisation habits and account reviews.
Reading the issuer’s documentation is the only reliable source for upgrade requirements.
Secured vs Unsecured Starter Cards
| Aspect | Secured Card | Unsecured Starter Card |
|---|---|---|
| Credit Limit | Based on deposit | Based on underwriting |
| Deposit Required | Yes, refundable | No |
| Upgrade Path | Frequently available | Not applicable |
| Credit Reporting | Often monthly | Often monthly |
For broader comparisons, visit the Credit-Builder hub on Choose.Creditcard .
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Part of The CreditCard Collection
SecuredCard.Creditcard is one spoke in The CreditCard Collection — a network of focused microsites run by ronarn AS. Each page explains one concept using neutral, documentation-style language.
We do not issue cards or provide personalized recommendations. This page summarizes how secured cards are described in issuer documentation so readers know where to locate key details.
This site is informational only and does not provide financial, legal, investment or tax advice.
This page links into the Credit-Builder hub on Choose.Creditcard.
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