Definition
A credit card that requires a security deposit, which serves as collateral and helps build or rebuild credit.
What to consider
- Remember that missing a payment can put your collateral at risk.
- Use secured loans to build credit responsibly.
- Plan to pay them down as soon as you can.
Real world scenarios
- After a few credit mishaps, Lily applied for a secured credit card, which required a refundable deposit and helped her rebuild her credit.
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