Credit cards issued by lenders that are backed by a secured payment that is used as collateral on the account and is generally only used if the borrower defaults. Secured credit cards are often issued to subprime borrowers or those with limited credit histories (so-called thin file borrowers). With standard reporting to credit reporting agencies, these cards can help borrowers improve their credit profile. Secured credit cards are issued by nearly all of the leading credit card lenders. The cards require a standard credit application, which assesses a borrower's credit score and credit history through a hard inquiry with a credit reporting agency. Underwriting and credit approval procedures then determine the amount of funds needed by the borrower to open an account, and the credit line that will be extended. Deposits typically start at $200, but can range as high as $1,000, with a credit limit usually set at the amount of the deposit.
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