What Is a Secured Credit Card?
Everything you need to know about how secured cards work, who they are for, and which ones are worth getting.
A secured credit card requires a refundable cash deposit that becomes your credit limit. A $300 deposit gives you a $300 limit. The card works like a regular credit card — you make purchases, receive a monthly bill, and pay it — but the deposit protects the issuer if you default. Secured cards report to all three credit bureaus and are the most reliable way to build or rebuild credit.
How a secured credit card works
When you apply for a secured credit card and are approved, you pay a security deposit — typically between $200 and $500. This deposit is held in a savings account by the issuer and becomes your credit limit. You then use the card for everyday purchases, receive a monthly statement, and pay your bill just like any other credit card.
The key difference from a regular credit card is the deposit. Because the issuer holds your deposit as collateral, they are taking on much less risk — which is why secured cards approve applicants who would be denied for unsecured cards.
Secured card vs prepaid card vs debit card
| Feature | Secured card | Prepaid card | Debit card |
|---|---|---|---|
| Builds credit | Yes | No | No |
| Reports to bureaus | Yes | No | No |
| Requires deposit | Yes | Yes (loaded funds) | No |
| Credit limit | Based on deposit | Loaded balance | Bank balance |
| Interest charged | If balance carried | No | No |
Who should get a secured credit card
- People with bad credit (below 580) — Secured cards approve applicants that unsecured cards reject.
- People with no credit history — The fastest way to establish a credit file from scratch.
- People rebuilding after bankruptcy — Some secured cards like OpenSky accept applicants with active bankruptcies.
- Students — A secured card with a small deposit is a low-risk way to build credit early.
Best secured credit cards right now
- Discover it® Secured — Best overall. No annual fee, 2% cash back, automatic upgrade at 7 months.
- Capital One Platinum Secured — Best for low deposit. Some applicants qualify for $49.
- OpenSky® Secured Visa® — Best for no credit check. Guaranteed approval with $200 deposit.
- Chime Credit Builder — Best for no fees. Zero annual fee, zero interest.