Basically just what the title asked
In: Economics
A secured credit card is a card you prepay for with cash. If your credit is bad then you will unlikely get a credit card. Just a reminder that a credit card works by having you buy something now and pay for it later. Technically if you don’t pay then there are serious problems which will hurt your credit.
A secured credit card means you put cash in first and you’re issued the card for that amount. So it’s more like a debit card where you really paid for the full balance already and the organization giving you the card is guaranteed to not lose money since you paid up front.
However, unlike debit cards, secured credit cards count as you having a credit card and paying off your balances without issues. A good part of repairing your credit is to have a good history of using credit and pay your bills in full. Since you can’t really get rejected for a secured credit card, this means you’ll have a card you can use and this gives you a quick way of repairing your credit.
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