What is a Secure Credit Card?

A secure credit card is a credit card that requires a cash deposit as collateral. This deposit acts as security in case you are unable to make payments on the card. The deposit also usually serves as your credit limit. For example, if you deposit $500, you will have a $500 credit limit on your Secure Credit Card.

Secured credit cards are designed to help people with bad credit or no credit history to establish or rebuild credit. Because the deposit serves as collateral, lenders are willing to approve applicants who might not qualify for a traditional credit card.

When you use a secured credit card, your payment activity will be reported to the credit bureaus, which can help you establish or rebuild your credit history. If you make your payments on time and keep your credit utilization low, it will help you improve your credit score.

It's important to know that not all secured credit cards are created equal, so it's important to read the terms and conditions of the card before you apply. Some secured credit cards may have high fees or interest rates, so be sure to compare different options and choose one that is affordable and has favorable terms.

My Favorite Secure Credit Card

The Discover Secure Credit Card has no yearly, or monthly fees as long as you make your payments on time.  The Discover card is the only Secure Credit Card I know of that also offers Cash Back on your purchases.

Get Your Deposit Refunded

It's also important to keep in mind that after a period of time of good credit usage, some secured credit card companies may convert the card to an unsecured credit card and return the deposit.  Before they convert your Secure card to an Unsecure Card they will probably check your current credit rating.

That is also why i am fond of the Discover Secure card as they will become a great credit card with cashback after your credit score improves.