If you are trying to build or rebuild your credit, getting traditional credit card approval may not be easy. Secure credit cards offer viable alternatives that allow you to build credits if other card products or issuers do not give you the opportunity.
How do these cards work? A secure credit card is a type of credit card that requires a refundable cash deposit to start. This reduces the risk to card issuers by allowing customers to maintain their deposits in the event of a failure to repay the balance. The minimum deposit for a protected credit card varies by card, but you should expect to pay at least $49.
With secured credit cards, individuals with lower credit scores have the opportunity to improve their credit while working to establish stronger financial habits. Most secure credit cards are even more valuable to credit buildings as they are available for $0 annual fees.
What is a credit card security deposit?
The words “in security” and “in security” on secured credit cards mean that the cardholder must deposit a certain amount with the card issuer in order to open a credit card account.
A security deposit is used as collateral by the card issuer if the cardholder defaults to the credit card balance. Deposits are usually equal to the credit limit on your card, but this may vary. As a result, you can often increase your credit limit by paying a larger security deposit.
How much does a protected credit card deposit cost?
The minimum deposit value for secured credit cards usually starts at around $200 (although there are cards with low deposits). The maximum deposit limit can reach $5,000. The amount you need to deposit depends on your particular financial situation and your application card.
Below is a list of some Top Security Credit Cards and their minimum and maximum sediments:
How much should I put for a secure credit card?
The amount you need to deposit on a protected credit card depends on your finances. If you have the minimum amount, you will need to deposit that amount. Many of the best protected credit cards allow cardholders to choose their deposit amount within a certain range. If you have the means, depositing more amounts will give you access to higher credit limits and make managing your cards easier.
For example, if you deposit $200 and spend $150 on a single trip to the grocery store, you can only access $50 before you pay your card balance. If you use your card regularly, you may need to pay a few credit card in the month. On the other hand, if you deposit large quantities of items, there is even more room for tiny steps.
Also, there may be a possibility that a smaller deposit is best because deposits have more control over your cash. For example, if you need cash in an emergency, access to the cash used for the deposit can be difficult. You will need to cancel your card to get your money back and wait weeks or months for a refund.
Depositing small amounts of deposits doesn’t have the convenience of a larger credit limit, but you can access your cash, Emergency funds will be built – And you will still be able to build your credits with the benefits of a secure card.
Best Practices for Using a Secure Credit Card
It makes sense to have a strategy in mind, as you will have the option to decide how much money you want to place on a secured credit card that exceeds the minimum required amount. Ultimately, the main goal with a secure credit card is to build future credits and you need to think of having a credit line to borrow as a secondary goal.
Consider the following tips to build your credit as quickly and efficiently as possible with a protected credit card:
- Always pay your bills on time. The most important factor that makes up your credit score is your payment history. Therefore, you need to make sure you pay your credit card bill early every month.
- Request small, repetitive bills that can be easily covered with cash. Secure credit cards do not offer large credit limits immediately, so they should be used for small bills that can be easily repaid. Examples of secure credit card billing payments include subscription services you pay, your monthly phone bills, and small utility bills.
- Place a larger security deposit (if possible). This is helpful Increase your credit score By keeping you Credit use Low ratio (another factor that affects your credit score). Most experts suggest maintaining credit usage below 30% of available credit limits for best results, so more deposits allow you to balance out a little more with fewer breathing chambers without compromising your credit.
- Pay your credit card bill several times a month. Regardless of how much you put as collateral for your credit limit, you can help keep your usage down by paying back your new fees regularly (e.g. once a week) for each billing period that your statement is due.
When do I pay a secure credit card deposit?
When applying for a secured credit card, you must provide personal information such as your full name, date of birth, address, social security number, employment information, and income. Next, you need to choose how high you want your credit limit.
Once you have established your deposit amount, you will be asked to pay your deposit online with a debit card or bank account. You will be paid your deposit during the application process, so there is a good chance that you will be approved immediately.
Can I regain my security deposit?
Secure credit card security deposit is Refundablebut when will you get them back exactly? It really depends on the card you have, how you use it, and what happens with your account over time.
In some cases, you can recover your funds without closing your account Upgrade your secure credit card Your deposit will be returned to your unsecured card at that time. In either case, you will need to repay your balance and close your protected credit card account to recover your deposit.
The timing varies by issuer, but there are security credit cards that advertise the timeline to obtain security deposits. for example, Find your IT® Secure Credit Cardyou can regain your deposit after “6 consecutive payments on time and 6 months of good status on all credit accounts.” If you simply want to repay your balance, close your card and request a deposit back. On the other hand, it can take up to two billing cycles and 10 days to receive a refund.
Even if you are not necessarily using a secure credit card, we recommend that you leave your account open to keep your credit in good condition. Closing your credit card can actually damage your credit score This is because we are increasing credit usage by reducing the total amount of credit available.
If you are definitely not interested in holding your secure credit card, consider moving to an unsecured credit card with the same issuer. As mentioned before, some issuers will automatically offer upgrades after consistent and on-time payments with secure cards. Others will wait for you to request an upgrade.
Conclusion
Protected credit cards are one way to invest in the future of finance, no matter how much you spend on your deposit. It can be difficult to save the deposits required for a protected card. Build your savings Certainly not impossible, and it is definitely worth it. Ultimately, getting a protected card is one of the smartest ways to build credits with minimal risk involved.
*Information on the Bank of America® Unlimited Cash Rewards Secured Credit Card and Citi®Secured MasterCard® was collected independently by Bankrate.com. Card details have not been reviewed or approved by the card issuer.
The Bank of America content in this post was last updated on April 1, 2025.
