Secured credit card

A secured credit card is linked to a savings account you open with the bank or other financial institution offering the card.

You deposit a sum of money in the account, and you can borrow up to that amount using your card. If you don't repay what you borrowed, the lender can access your account to cover your debt.

Secured credit cards look the same as other credit cards, so no merchant can identify a card as secured. But if you have trouble qualifying for credit, perhaps because you have no credit history or you've just started working, you can use a secured card as a first step toward establishing a record of using credit responsibly.

Secured cards typically require a cash security deposit. The larger the security deposit, the higher the credit limit. Usually, secured cards are used to build credit by those who don't have a long credit history, like young people, or those who have had credit problems in the past.