SECURED CARDS
Using a secured card to rebuild credit
A secured credit card can help establish payment history when traditional cards are unavailable, but the deposit does not protect you from fees, interest, or missed payments.
How it works
You provide a refundable security deposit, and the credit line is often similar to that deposit. You still receive bills and must make payments like any other credit card.
What to compare
Review the full product terms before applying.
- Whether activity is reported to all three nationwide credit bureaus
- Annual, monthly, application, or account-closing fees
- Purchase interest rate and penalty terms
- Minimum deposit and credit limit
- Rules for refunding the deposit or graduating to an unsecured card
A simple usage pattern
Use the card for a small planned expense, keep the balance well below the limit, and pay the statement balance on time. A secured card is not extra income.
Avoid expensive substitutes
A prepaid or debit card usually does not create a borrowing-and-repayment history. High-cost products are not necessary to build credit.
Primary references: Consumer Financial Protection Bureau credit report resources and Federal Trade Commission consumer credit guidance.
CFPB credit resources ↗ · FTC consumer protection ↗ · IdentityTheft.gov ↗