Secured Credit Card


DEFINITION of 'Secured Credit Card'

A type of credit card that is backed by a savings account used as collateral on the credit available with the card. Money is deposited and held in the account backing the card. The limit will be based on both your previous credit history and the amount deposited in the account. The limit as a percent of the deposit tends to range between 50% and 100%.

BREAKING DOWN 'Secured Credit Card'

This type of credit card is used by people with little to no credit or a past history of bad credit. The major benefit that these cards provide is the ability to rebuild or establish a credit history which at some point may allow users to gain unsecured credit cards or other forms of credit finance. Another benefit of secured cards is that holders can purchase products that can only be paid for with credit cards such as with some online retailers.

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  3. Credit Bureau

    An agency that researches and collects individual credit information ...
  4. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  5. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), ...
  6. Credit Union

    Member-owned financial co-operative. These institutions are created ...
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