Secured Credit Card

AAA

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%.

INVESTOPEDIA EXPLAINS '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. Credit Report

    A detailed report of an individual's credit history prepared ...
  3. Credit Bureau

    An agency that researches and collects individual credit information ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), ...
  5. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  6. Closed Loop Card

    A credit card or gift card that a consumer can only use to make ...
Related Articles
  1. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  2. Retirement

    Understanding Credit Card Interest

    Paying these rates can impact your disposable income and your investment returns.
  3. Savings

    Mortgage Faceoff: Bank of America Vs. Wells Fargo

    Which bank offers the better mortgage deal? Here's how they compare on two popular types of mortgage.
  4. Savings

    Which Are The Best Credit Cards To Take To China?

    Credit cards are now much more widely accepted in China – and one issuer leads the pack, due to its deal with China UnionPay, the Chinese bankcard network.
  5. Credit & Loans

    Chase Sapphire Preferred Vs. AmEx Platinum

    Chase Sapphire Preferred has many rewards and is much cheaper. Is American Express Platinum worth its premium price? That depends.
  6. Credit & Loans

    How to Challenge & Win A Credit Card Dispute

    Found an error on your credit card statement? Five strategies to persuade the card issuer to fix it in your favor.
  7. Credit & Loans

    Review: Barclaycard Rewards MasterCard

    If you're looking for a rewards card and you have an average credit score, this one's worth investigating.
  8. Savings

    Say Goodbye To Overdraft Fees

    At $35 a pop, overdraft fees can mount up quickly. Here are 4 different strategies for avoiding them.
  9. Savings

    Avoid Credit Card Rewards Devaluation At All Cost!

    If you don't know how to redeem your rewards points, we'll show you the easiest way to avoid rewards devaluation this year.
  10. Savings

    Top Checking Accounts With No Overdraft Fees

    Choosing the right checking account could save you hundreds of dollars in fees every year.

You May Also Like

Hot Definitions
  1. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  2. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  3. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  5. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  6. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
Trading Center