A secured credit card is a type of credit card that is backed by a security deposit that you provide to the credit card issuer. The security deposit acts as collateral and becomes your credit limit. For example, if you provide a $500 security deposit, your credit limit will be $500.
Secured credit cards are often a good option for people who have no credit or have had credit problems in the past, as they may not be able to qualify for a traditional, unsecured credit card. To get a secured credit card, you will typically need to fill out an application and provide the security deposit.
Using a secured credit card works the same way as using an unsecured credit card. You can make purchases with the card and are required to pay off your balance each month. As long as you use the card responsibly and make timely payments, you can build or improve your credit history.
After a period of time, usually around 12 to 18 months, you may be able to upgrade to an unsecured credit card if you have demonstrated responsible credit behavior. The credit card issuer will typically return your security deposit to you and you will no longer need to provide collateral to use the credit card.