What is a secured credit card?
A secured credit card is a type of card where a borrower has to maintain a deposit in order to be able to use the card. The main difference between a secured and an unsecured credit card is that a secured card requires you to open and maintain a savings account as security for your credit. An unsecured card does not - good personal credit will serves as a "guarantee" that you will pay back your debt.
If you do not have good credit, you can get a secured card where the required savings deposit ranged from a few hundred to several thousand dollars, often depending on you credit limit.
When you get a secured card, your credit line is a percentage of your deposit, typically between 50 and 100 percent. It is important to determine if the bank will pay you interest on your deposit, especially if the deposit amount is high. In addition, you also may have to pay application and processing fees. A secured credit card can require an annual fee, a monthly fee and usually also has a higher interest rate than an unsecured credit card.
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