Security deposit on a credit card: What it is & how it works

When used responsibly, a secured credit card could be just the tool you need to build credit. But once you’re approved, there are a few steps to take before you can start using your card. One is putting down the security deposit. 

Find out how secured credit card deposits work and how to earn your security deposit back. Plus, learn more about Capital One secured card options. 

What you’ll learn:

• Secured credit cards require a one-time refundable security deposit to open an account. 

• Once you’re approved for a Capital One secured credit card, you have 35 days to make the minimum deposit, which you can submit all at once or in increments of at least $20.

• Capital One allows you to deposit more than the minimum to unlock a higher credit limit on your secured card, up to a certain amount. 

• With responsible card use, you may be able to upgrade to an unsecured credit card.

A security deposit on a credit card is a one-time, refundable deposit that acts as collateral to open a secured credit card. The deposit may equal the account’s credit limit, which is the maximum amount you can spend with the card. For example, if you deposit $200, the card’s credit limit may be $200. But some secured cards may have higher limits.

The issuer holds the deposit and only keeps it if the cardholder defaults on paying their balance. If you use your card responsibly, you might earn your deposit back and upgrade to an unsecured card.

Credit card issuers have their own policies that determine how secured card deposits work. Depending on the issuer, you might have to pay your deposit up front before getting approved. Or you may be able to pay it after approval.

For Capital One secured cards, you have 35 days from approval to make the minimum deposit. You can submit your deposit all at once or over time in increments of at least $20. 

Once you make the minimum deposit within the 35-day window, you can activate your Capital One secured card.

Secured credit cards typically require a deposit of at least $200. But at Capital One, the minimum amount for a secured credit card deposit ranges from $49 to $200, depending on creditworthiness, for a credit limit of at least $200. And the more you deposit, the higher your credit limit could be.

Generally, you can get your security deposit back by paying off the balance and closing the account or by upgrading to an unsecured credit card. But deposit refunds depend on your credit card issuer’s policies.

There are two ways to get your security deposit back at Capital One. 

1. By establishing a positive track record, you can earn your deposit back as a statement credit if you’re approved for an upgrade to an unsecured card.

2. If your account is in good standing, you can get your deposit back when you close your account and pay off your credit card balance in full.

Whether you can raise the limit on your secured credit card depends on the card issuer’s policies. 

Capital One lets you raise your credit limit by increasing your deposit up to a certain amount. For example, if the minimum deposit is $200 and you decide to deposit $300 instead, your credit line would be $300. Capital One also has secured cards with credit limits higher than the initial deposit. Depending on your credit history, Capital One may extend a $200 credit line with a $49 or $99 deposit. 

You have to make at least the minimum deposit before the 35-day funding window closes to unlock your credit line and get your card.

Unlike some issuers, Capital One reports secured card accounts to all three major credit bureaus. This means that with responsible use, a Capital One secured card may help you build credit and improve your credit scores. 

Capital One has two secured credit cards: the Platinum Secured card and the Quicksilver Secured card.

Depending on your credit history, an initial security deposit of $49, $99 or $200 can open a Platinum Secured card account with a credit line of at least $200. With no annual or hidden fees, you can focus on building your credit with responsible card use and not on extra charges. View important rates and disclosures.

And if you’re approved, the card offers resources and support to help you on your credit-building journey.

The Quicksilver Secured card functions a lot like the Platinum Secured card, with one major difference: It comes with cash back rewards. 

With a $200 deposit and no annual fees or hidden fees, you can open a credit line of at least $200 and earn 1.5% cash back on every purchase. View important rates and disclosures.

Credit cards with no deposit required are known as unsecured cards. There are unsecured cards for people with credit scores in different ranges. Getting one depends on the credit requirements of the issuer and the specific card. 

If you have limited credit history or poor credit scores, there are other ways to access a credit card, such as becoming an authorized user.

Secured cards can be great tools for building credit. To open a secured credit card, you have to put down a one-time refundable security deposit. 

At Capital One, the minimum security deposit ranges from $49 to $200, depending on creditworthiness, for an initial credit limit of at least $200. You can get your security deposit back if you use the card responsibly and upgrade to an unsecured card.

Compare Capital One secured credit cards to see if one is right for you, and check for pre-approved card offers before you apply. Getting pre-approved is quick and won’t hurt your credit scores.