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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
* Secured credit cards mean that the user had to put down a cash deposit as collateral.
In regards to risks, Quindlen said they are tackling this by issuing secured credit cards whereby people can deposit $500 and have a $500 credit limit.
The fee has been axed for all new and existing customers with Wells Fargo Business Elite, Business Platinum and Business Secured Credit Cards and Wells Fargo's small business lines of credit with access cards.
Secured credit cards also saw a sharp jump in revenue driven by a 30% increase in average fees from 2012 to 2013, but is expected to hold steady through 2014 as these fees plateau, according to the CFSI.
Nicola Neary, 40, secured credit cards from three companies, got a secured loan of pounds 48,599 and a pounds 25,000 mortgage advance, Aberdare Magistrates' Court heard yesterday.
The two men had secured credit cards using fake documents, running up huge bills in the process.
Secured credit cards are an excellent way to begin rebuilding your credit.
New account holders can then build credit history through secured credit cards or co-signed loans.
R.J., Bootle Capital One (0800 952 5452) is American-owned, and secured credit cards are not unusual in the USA.
Specifically, IJL markets and services secured credit cards such as Visa and Mastercard.
Secured credit cards, like the Citi (NYSE:C) Secured Mastercard is a card that you have to put a security deposit down before you can access the money.
TOP 10 SECURED CREDIT CARDS LOWEST FEES AND MINIMAL BALANCES Phone Card Purchase Annual Institution Class APR Fee Amalgamated Bank 800-723-0303 Gold 9.25% $50 of Chicago Amalgamated Bank 800-723-0303 Standard 12.75% $50 of Chicago Merrick Bank 801-545-6600 Classic 14.70% $36 U.S.