Help Desk FAQ

Credit Cards


What is a secured credit card?

A secured credit card requires the cardholder to put up a deposit—typically a few hundred dollars though the amount can vary widely—which is kept by the card issuer as security for the potential future debt. If the cardholder defaults (doesn't pay what he or she owes) on the card, the card issuer keeps the deposit to cover the unpaid debt.

It is easier, much easier, for someone with no credit history or a low credit score to qualify for a secured card than for an unsecured card. And using a secured card responsibly for a year or more can make it easier to get a traditional, unsecured credit card later.

Secured cards tend to charge higher interest rates and fees than unsecured cards, and some cards are much more expensive than others, so it’s very important to shop around. Start your search with our Fall 2011 Issue of Secured Credit Card Survey.



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