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. Annual Percentage Rate - APR

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

    A card issued by a financial company giving the holder an option ...
  3. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  4. Credit Report

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

    An agency that researches and collects individual credit information ...
  6. Debt Snowball

    A method of debt repayment in which debtors pay off their smallest ...
Related Articles
  1. Credit & Loans

    Credit, Debit And Charge: Sizing Up ...

  2. Retirement

    Understanding Credit Card Interest

  3. Credit & Loans

    Can I get a balance transfer if I have ...

  4. Credit & Loans

    Does a cash advance hurt my credit score?

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center