Secured credit cards are designed for individuals looking to build or rebuild their credit. Unlike traditional credit cards, secured cards require a cash deposit as collateral, which typically determines the card’s credit limit. This deposit reduces the risk for the issuer, making it easier for those with poor or limited credit histories to get approved. Secured credit cards function like regular credit cards, allowing users to make purchases, earn rewards, and improve their credit score with responsible use. Over time, consistent payments and responsible use can lead to an improved credit score, potentially qualifying the cardholder for an unsecured credit card. Additional features may include minimal fees, reports to major credit bureaus, and educational resources to help cardholders manage their credit responsibly.
