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.

RELATED TERMS
  1. Credit Card

    A card issued by a financial company giving the holder an option ...
  2. Business Credit Card

    A credit card intended for use by a business rather than for ...
  3. Prepaid Credit Card

    A card issued by a financial institution that is preloaded with ...
  4. Credit Card Funding

    The ability to electronically fund a new account, business, or ...
  5. Subprime Credit Card

    A type of credit card issued to people with substandard credit ...
  6. Credit Card Authorization Key

    A code used in credit card transaction authorizations that confirms ...
Related Articles
  1. Credit & Loans

    Terrible Credit Score? Try These Credit Cards

    When your credit is less than stellar you have fewer choices. But some are still better than others. Here's our read on which cards to get.
  2. Credit & Loans

    Understanding Credit Cards

    Credit cards are a type of unsecured personal loan between the credit card issuer and the credit card holder.
  3. Credit & Loans

    Use Your Credit Card To Boost Your Credit Score

    Misusing credit cards can blow your credit – but using them well can boost your score. How to grow a history, fix bad credit, make good credit even better.
  4. Mutual Funds & ETFs

    Investing In Credit Card Companies

    This investment requires keeping an eye on consumer indexes and the overall health of the economy.
  5. Credit & Loans

    Credit Cards to Help You Recover from Poor Credit

    A poor credit score can put a huge damper on your finances. Thankfully using the right credit card can help boost your score and turn around your finances.
  6. Credit & Loans

    How Many Credit Cards Should You Have?

    Having several credit cards provides many benefits. Here are a few factors to consider when you’re deciding how many credit cards you need.
  7. Credit & Loans

    What Happens When Your Credit Card Expires

    You can take advantage of this process to learn about other cards that may better suit your needs.
  8. Credit & Loans

    Using Your Credit Card To Rebuild Credit

    Responsibly using credit cards is one of the best ways to rebuild a poor credit rating.
  9. Credit & Loans

    Credit Card Or Cash?

    Credit cards are convenient to use, but not always the best choice. Here are 5 times you shouldn't pay with a credit card – and 5 times you should.
  10. Credit & Loans

    Should You Use Credit Cards To Fund Your Business?

    We give you 4 reasons to consider using a credit card instead of a business loan to fund your business, and how to be smart about it.
RELATED FAQS
  1. Where are secured credit cards accepted?

    Repair a damaged credit history or establish one by opening a secured credit card account with a collateral deposit into ... Read Answer >>
  2. How do secured credit cards help me build my credit score?

    Find out how secured credit cards function and why they can be very useful for those looking to build or rebuild their credit ... Read Answer >>
  3. What is the best way to start to rebuild your credit after a bankruptcy?

    Find out some simple steps you can take to rebuild your credit score gradually after filing a bankruptcy, starting with a ... Read Answer >>
  4. What are some common models that practitioners use in quantitative analysis of equity ...

    Understand which aspects of a credit card agreement make accepting a new credit card offer a good deal or one that should ... Read Answer >>
  5. When should I use a credit card?

    I am currently taking a personal finance class and my teacher continually tells us not to use credit cards for everyday purchases, ... Read Answer >>
  6. How do I start building a credit score?

    Find out how to build a credit score, which type of credit score is best to start out with and what the most vital element ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center