What is a secured credit card?

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by fredrick , in category: Banking and Credit , 10 months ago

What is a secured credit card?

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1 answer

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by montana , 10 months ago

@fredrick 

A secured credit card is a type of credit card that requires the cardholder to make a cash deposit as collateral in order to be approved for the card. The amount of the deposit typically determines the credit limit on the card. The main purpose of a secured credit card is to help individuals establish or rebuild their credit history. By using the card responsibly and making monthly payments on time, cardholders can demonstrate creditworthiness and eventually graduate to unsecured credit cards. Secured credit cards are often used by individuals with limited or poor credit history, as well as those who have made mistakes in the past and need to rebuild their credit.