What is a secured credit card, anyway?
A secured credit card is one that requires a deposit payment from the customer. Thus, you secure it with an up-front payment before you can use it. On average, the initial deposit for these cards will range between $500 and $1,000. For example, I might pay $1,000 for a secured credit card and then be able to charge that amount over time — or a percentage of that amount. If I make all of my payments on time, the bank might increase my limit without additional deposits on my part. Also, if you use the card responsibly and make payments on time, you’ll eventually qualify for an unsecured credit card. On average, this takes about a year. So you can think of a secured card as a “gateway” to higher credit limits — and possibly a higher credit score as well.
