How does a secured credit card work?

Answered on February 12, 2018
Updated on February 12, 2018
The content is accurate at the time of publication and is subject to change.
Amy Miller Amy Miller
A secured card may be a great option though for getting a credit card and rebuilding your credit as secured cards are usually reported to the credit bureaus – Experian, TransUnion or Equifax. The credit limit on a secured credit card is established by the security deposit an applicant pays. Your initial deposit is usually refundable, and there are secured cards with fair fee schedules and good customer service. It means that secured credit cards work like unsecured credit cards: a cardholder will receive statements every month and will be required to make card payments monthly. The security deposit will stay intact while a cardholder makes all due payments on time and the deposit will be refunded once the card is paid off and closed. Just make sure you do your research to find the one that is right for you, for example you may like the Discover it® Secured - it earns cash back on all purchases and has no annual fee.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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You can apply for a secured credit card. You will need to put down a security deposit to get this card. A minimum security deposit is around $200 and it gets you the equal line of credit. Secured cards work like general credit cards and can be used everywhere they are accepted. For example, you can apply for a Discover it® Secured card. This card offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically and unlimited 1% cash back on all other purchases.
In order to get your deposit back you need to close your credit card account and pay your card balance in full. After you paid your card off, contact the credit card issuer to request a refund of your security deposit.

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