Secured credit card

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Secured Credit Card

A credit card with a credit limit that is at least partially collateralized by funds in a special savings account. That is, a cardholder places a certain amount of money into an account with the credit card company, and this is used to protect the company from the cardholder's default. Depending on the cardholder's credit history, he/she may be required to place anywhere from 50% to 100% of the credit limit into the savings account. These funds still belong to the cardholder, and he/she may retrieve it if he/she pays off or cancels the secured card. Because these reduce the risk to the credit card company, it may charge a lower interest rate. Secured cards are particularly useful for persons with bad credit or little credit history.

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 creditor can access your account to cover your debt. The creditor may also change substantial fees for a secured card.

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've just started working, you can use a secured card as a first step toward establishing a record of using credit responsibly.

References in periodicals archive ?
Estimated addressable market (number of consumers) for various secured card market segments
Since a secured card requires a cash deposit as protection, it's highly unlikely that any bank will match your deposit.
Visa, MasterCard, American Express and Discover Card have approved and certified the space for secured card distribution making Archway the only fulfillment services company approved by the four major card associations to fulfill secured cards.
The player's personal IBC automatically establishes a bank account and is issued a secured card from Dominica's largest private bank.
The secured card requires a minimum security deposit of $300 and first-year fees ranging from $210 to $3,000.
The Secured Card Solution serves the VCU community with a standardized, comprehensive, and convenient solution for approximately 50,000 card accounts.
Qualified applicants will be invited to open a non-transactional Secured Card Savings Account and receive a MasterCard with a credit limit equal to the account deposit.
The SKYPASS Visa Secured card helps customers build credit in the United States.
The Sanwa Secured Card, which is available as a VISA or MasterCard with a fixed Annual Percentage Rate (APR) of 15.
During the webcast, NextCard will provide an in-depth business update, discuss how the Company's funding and securitization activities are leading to greater capital efficiency and highlight the exciting opportunities and progress of the secured card product.
Starting with a secured card will assist these individuals in establishing credit.
financial card market, national ID programs, driver's license issuance and other secured card applications.