What is a Secured Credit Card?
Secured credit cards are pretty much like the traditional credit card with a few differences. It is for those who have low credits to be approved for a general credit card. Secured credit card asks you to make a deposit initially that is kept as a security deposit by the bank or issuer. It helps you to rebuild the credit limit in order to qualify for a general credit card provided you clear all the due amounts in time. 



How secured credit card works?
Unlike a general credit card, in a secured credit card, your monthly transactions don’t get deducted from the deposited amount. Instead, you receive a monthly bill with a grace period for paying the amount in time with no interests. But, if you fail to pay the due amount in time, banks will take your security deposit as a penalty. 
Secured credit cards require filling of application form and verification process just like traditional credit cards for the approval. The security deposit is refunded by the bank when you close the account. 

Benefits of Secured credit card
Before you apply for a secure credit card have a look at the credit card benefits.

a) Easy to qualify
Anyone who is unable to qualify for a non-secured or original credit card can apply for a secured credit card. The approval process is easy with a good verification check and eventually helps you to qualify for an original credit card with good credit scores. Any individual having fewer credits or without any credit can get qualified for secured credit cards and chances of rejection are rare. 

b) Rebuild Credit
Secured credit card issuers track down your transaction and payment history and report it to the three major credit reporting bureaus. This is highly beneficial if you pay the monthly credit amounts in due time with no interest rate applied. Your responsible handling of the credit card when viewed by bureaus, they reward you by improving the credit scores. As a result, within a few years by handling the card responsibly, you can qualify to get approval for the original credit card. 

c) Pays off emergency payments
Many times you are stuck in a situation where you don’t have enough money in the bank account to pay emergency bills. In such cases, if you have secured credit card, you can charge the extra amount to the secured credit card since it does not involves the traditional method of deducting transactions from the deposited balance. The extra amount will be included in your monthly credit card statement with an applied interest rate which you can pay in due time instead of paying instantly at the emergency situation. 

d) Earn interest on deposits
Banks keep your security credit card deposit in a collateral savings account. As a result, many banks issuing secured credit cards helps in earning interest on the deposits which are not high yet yields some amount of profit on the total amount when refunded on closing the account. This way with a constant deposit, you end up earning some more bucks increasing your deposited balance. Also, the chances of falling into debt are rare here unless you overspend too much. 

Final Words
Secured credit card is a good choice when you don’t get approval for a traditional credit card. It helps you to be responsible with your budget by improving credit scored over the years to qualify for a traditional credit card.