What Is a Secured Credit Card?
A secured credit card is a credit card backed by a cash deposit, which usually becomes the card’s credit limit. It works like a regular credit card for purchases and payments, and card activity is typically reported to credit bureaus, which makes it a common way to establish or rebuild credit history.
How the Deposit Works
A 300 deposit usually means a 300 credit limit. The deposit is returned when the account is closed in good standing or upgraded to an unsecured card.
Utilization
Because limits are small, balances can quickly make up a large share of the limit, which affects the credit utilization ratio.
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🔗 Related Terms
More Loans & Credit Terms
- Amortization
- APR (Annual Percentage Rate)
- Auto Loan
- Balance Transfer
- Balloon Payment
- Buy Now, Pay Later (BNPL)
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.