What is a bank secured credit card?

A bank secured credit card is a credit card issued by a bank against a collateral (cash) deposit. The credit limit on the secured credit card is the same as that of the collateral (deposit) made for the issue of the card.

By issuing a secured credit card against collateral, the bank minimises the risk involved, as the cardholder can spend as much as they hold. In case of non-payment of outstanding amount on the card, the bank reserves the right to charge/recover the dues from the deposit made by accountholder.

The same billing and repayment procedure for secured credit cards is same as that for unsecured credit cards.

The credit limit on a secured card is based on your credit history and the amount you credit in your account. The limit is expressed as a percent of the amount in the account and is usually varies between 50% and 100%. The money in your account can be claimed by the credit card issuing company for various reasons, like late payment fees, minimum amount due, or in case of no payment over a period of time(default).