How does a secured Credit card work?
You’ve got it right. You put a money down to be held as security. For every dollar you give the card company it equals a dollar of credit. So if you give them $500 you’ll have a $500 credit limit. It functions just like an unsecured card, except that they’re holding a deposit for you. If you use $100 of your $500 limit, you have $400 left. You’ll get a bill showing what you charged and the minimum due by the due date. You can pay it back in full (I strongly advise you do this) or pay at least the minimum (3% of the balance = $30 or $10 whichever is greater). If you paid only the minimum you’d now have $430 available. If you pay in full you’ll have your $500 limit again. Since you’re trying to establish a credit history, pay in full each time, you can’t afford to be paying the minimum right now.
