What is Secured Credit Card?
A secured credit card is still similar to a regular credit card. The only difference, however, is that a secured credit card requires you to make an initial deposit to the bank, which is as large as your credit limit. This means that if your initial deposit is $500, you’ll be given a maximum credit limit of $500. Nevertheless, you can still enjoy the benefits of a secured credit card similar to the regular credit cards.
Upon using secured credit cards, you are expected to make monthly payments on time. In case of payment delays, the bank will deduct the balance from your deposit but once you settle your account and balances, the issuer will return your deposit.
The issuer will do a monthly report of your payment history and debt amount to the credit bureaus. The result will either help or affect your credit standing negatively. So to avoid this, make sure to manage your finances carefully and wisely.