How Secured Credit Cards Work

Invest in your credit—and your future


For someone who doesn't have the credit they want or need, a secured credit card can be a good first step on the way to bigger and better things. But it's important to know exactly how secured credit cards work, how they're different from other cards, and what it takes to get one.

Q: What Is a Secured Credit Card?

A: A secured card lets you make purchases in stores or online like a traditional credit card, but you can only get one when you pay a bank a set amount of money first. That money is called a security deposit, and it tells the bank you’re serious about making your payments on time.

Q: How Does the Security Deposit Work?

A: It's like making an extra promise to the bank. It tells them you're committed to paying back what you borrow by paying money up front. Usually, your security deposit is refundable.

Q: Who Should Get a Secured Card?

A: If you're looking to build (or rebuild) your credit, a secured card might be the way to go. It can be helpful if you've never had a credit card or if your credit needs some work (because of not paying bills on time, for instance).

Q: How Does It Help Build Credit?

A: If you buy things with a secured card, there will always be a minimum payment each month. So pay your bill on time and, if you can, pay more than the minimum amount due. Your responsible spending and repayment can help increase your credit and may help you improve your credit in the future. Of course, late or missed payments can harm your credit.

Q: How Is a Secured Card Different From a Traditional Credit Card?

A: With a traditional (unsecured) credit card, the bank gives you a credit limit—the amount of money you can borrow—based on things like your past spending and repayment habits (also known as your credit history). With a secured card, your credit limit is mostly based on the security deposit you pay.

Q: Does It Look the Same?

A: Generally, yes. It depends on the credit card company, but most secured cards are designed to look just like traditional cards. So chances are good that no one will be able to tell that you're using a secured card.

Q: What's the Difference Between Secured Cards and Debit Cards?

Paying with a debit card is like using cash directly from your checking account, while a secured card loans you some of the bank's money that you can spend and then pay back. But what's most important is that a debit card can't help you build credit like a secured credit card can when used responsibly.

Here's the bottom line: building credit—whether you're trying to fix your credit history or start from the ground up—takes time. Choosing a secured card, like a Secured MasterCard® card, gives you the opportunity to spend responsibly while building your credit at the same time.


We hope that you found this helpful. Our content is not intended to provide legal, investment, or financial advice or to indicate the Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.