Secured credit card

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 ?
According to the release, about 140,000 social security numbers of Capital One credit card customers were compromised as well as 80,000 linked bank account numbers of secured credit card customers.
No bank account numbers or Social Security numbers were compromised, other than: About 140,000 Social Security numbers of our credit card customers; About 80,000 linked bank account numbers of our secured credit card customers.
Using a secured credit card, where the credit limit is typically equal to a deposit made with the issuing bank.
A secured credit card, as the name suggests, is guaranteed by money you deposit upfront.
BANKING AND CREDIT NEWS-October 22, 2018-KeyBank launches new Key secured credit card
Global Banking News-October 22, 2018-KeyBank launches new Key secured credit card
Most recently, the bank launched the Key Secured Credit Card, a no-annual fee credit card designed to help clients build or strengthen their credit history.
But there are options," McClary says.<br />He suggests that consumers just starting out open a secured credit card it looks and functions like any credit card and can be used at any retailer, but it doesn't require credit approval.
But parents can help their older student teens learn more about money management if they at least have a debit card or a secured credit card where they can track their expenses and learn to read bank statements.
These professions are allowed credit card usage, though it is called in this instance "secured credit card".
"Opt to pay for things in cash, or use a secured credit card," she says.