Ryan P Page, Staff Writer
@ryan_page
A security deposit for a credit card is a fully refundable sum that you pay to a credit card issuer before a secured credit card account is opened. The amount of the deposit usually becomes the account’s credit limit, and the cardholder gets the money back after bringing the card’s balance to zero and closing the account. Since the security deposit on a credit card protects the issuer against the threat of nonpayment, it makes getting a credit card easier for people with bad or limited credit.
Notable Secured Credit Cards in 2024
- Rates & FeesPartially-Secured: Capital One Platinum Secured Credit CardCapital One Platinum Secured Credit CardLearn MoreLearn Moreon issuer's website
- Rates & FeesCash Back Rewards: Capital One Quicksilver Secured Cash Rewards Credit CardCapital One Quicksilver Secured Cash Rewards Credit CardLearn MoreLearn Moreon issuer's website
- No Credit Check: OpenSky® Plus Secured Visa® Credit CardOpenSky® Plus Secured Visa® Credit CardLearn MoreLearn Moreon issuer's website
- Great for Beginners: Bank of America® Customized Cash Rewards Secured Credit CardBank of America® Customized Cash Rewards Secured Credit CardLearn MoreLearn More
Only secured credit cards require a deposit, and for some people it can be hard to put money down up front. However, a secured credit card can actually save you more money compared to unsecured credit cards for people with poor credit. That’s because unsecured cards for bad credit usually come with monthly, annual, and processing fees. You can check out WalletHub’s guide on secured credit cards for more information on what they are and how they work.
People also ask
Why does my credit card need a security deposit?
Your credit card needs a security deposit because it serves as collateral for the issuer, mitigating the risk associated with lending to individuals with a poor credit score. Only a secured credit card requires a deposit, which is fully refundable upon account closing.
What to Know About Credit Card Security Deposits
- Mitigate Lending Risk: Security deposits help lenders mitigate the risk associated with extending credit to individuals with poor credit histories. By having a security...
How can I get my secured credit card deposit refunded?
Security deposits are fully refundable, provided that you do not have an outstanding balance when you close your account. Otherwise, the bank will subtract any amount you may owe them from those funds.
What's a good deposit amount for a secured credit card?
Most secured credit cards require a deposit of at least $200. And the minimum deposit required is always a good place to start. Simply opening an account is the most important thing at this point, as it will allow you to begin rebuilding your credit. In other words, depositing the minimum lets you get started right away without having to worry about giving up too much cash.
Plus, the beauty of using a secured...
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