What is a secured credit card?

A secured card requires a refundable cash deposit — typically $200-$500 — that becomes your credit limit. It works like a regular card and reports to the major bureaus, making it a common first step for building or rebuilding credit.

Deposit $300 and your limit is typically $300; the issuer holds that deposit as collateral and returns it when you close in good standing or graduate to an unsecured card. Most secured cards report to all three major bureaus — confirm this before applying, since that reporting is what builds your history. The two levers that matter: pay the full statement balance on time every month, and keep utilization well below your limit (30% or less is a common threshold, lower is better). After 6-18 months of on-time payments, many issuers let you upgrade to an unsecured card and refund the deposit. A secured card is a graduation tool, not a destination — and note it's different from a prepaid card, which doesn't build credit at all.

Reviewed by the ClearValue Editorial Team · Last updated 7/8/2026