What is a secured credit card?

Go where you need:

• How does a secured credit card work?
• Benefits of a secured credit card
• How to apply for a secured credit card
• Tips for using a secured credit card

Credit history is key in helping you achieve your financial goals. Your credit score can determine what kind of mortgage, student loan, auto loan, or credit card you can receive, and is sometimes used by landlords, insurance companies, or potential employers as a quick measurement of your reliability or trustworthiness.

Knowing credit history touches so many facets of our lives, it can be stressful to know how to maintain healthy credit, especially if you have poor credit or no credit. You need a line of credit to prove your creditworthiness, but what do you do if you aren’t eligible for a traditional credit card?

That’s where secured credit cards can help. A secured credit card is a type of credit card that requires a one-time, refundable security deposit from the cardholder. The deposit is used as collateral, which assures the credit card issuer that you can pay your bill when it’s due. The activity on your secured credit card is also reported to the three main credit bureaus (Experian, Equifax, and TransUnion). That way, when you practice credit-building habits, you may help strengthen your credit score over time.

How does a secured credit card work?

Like a debit or credit card, a secured credit card can be used to make everyday purchases almost anywhere—in person or online. One of the things that makes a secured credit card unique is the deposit needed to secure the account.

These steps describe how a secured credit card works:

1. Make a deposit and set your credit limit: To open a secured credit card, you provide a one-time, refundable deposit that acts as collateral. This deposit typically becomes your credit limit; for example, Huntington offers limits ranging from $250 to $2,500. Because the deposit reduces risk for the issuer, approval requirements may be more flexible.

2. Use your card and make payments: You can use a secured credit card for everyday purchases, in person or online, just like a traditional credit card. Each month, you’ll receive a billing statement and can choose to pay the minimum, a portion, or your full balance. Paying in full helps you avoid interest (APR) charges.

3. Build credit with on-time activity: Your payment history and account activity are typically reported to the credit bureaus, which can help you establish or improve your credit profile over time when payments are made consistently and on time.

4. Get your deposit back or graduate: If you use your card responsibly, your deposit may be refunded when you close the account or you may become eligible to upgrade to an unsecured card. If payments are missed or the account defaults, the issuer may apply your deposit toward the balance owed.

Secured vs. unsecured credit cards: What’s the difference?

Both secured and unsecured credit cards function in the same way—receive a set credit limit, use your card to complete purchases, and make payments on the card each month. Both have interest rates, so if you carry a balance month to month, you’ll be charged interest, increasing the amount you owe to your credit card issuer. Unlike debit or prepaid cards, which use money you already have and typically don’t report activity to the credit bureaus, both secured and unsecured credit cards can help you build credit when used responsibly.

Unsecured credit cards don’t require a deposit to open an account, meaning the credit card issuer is assuming a higher level of risk and often won’t be reimbursed for missed payments. For this reason, unsecured credit cards are harder to qualify for. Unsecured credit cards also tend to come with more attractive benefits, like rewards, cash back, lower fees, and lower interest rates†. Like secured cards, they typically report your payment activity to the credit bureaus, helping you establish or improve your credit over time.

At Huntington, we offer three unsecured credit cards. Choose from earning cashback, rewards in the category of your choice, or a lower interest rate^†.

Benefits of a secured credit card

Secured credit cards can be great tools to help establish or rebuild your credit if you don’t qualify for unsecured credit cards.

Here are a few benefits of secured credit cards:

• It’s okay if you don’t have the best credit score. Unsecured credit cards often have rigorous requirements to qualify—including a positive credit history. Even if you aren’t happy with your credit score, you might be able to open a secured credit card because a deposit is used as collateral.
• Secured credit cards can help improve credit. With secured credit cards, your account information is typically shared with the three main credit bureaus. If you consistently use your secured credit card responsibly, your credit score could improve over time.
• Secured credit cards can help you receive an unsecured credit card. Once you’ve demonstrated your creditworthiness to your credit card issuer and credit bureaus, you may be able to transition to an unsecured credit card. Depending on your credit card issuer, you could automatically transition to an unsecured credit card after a certain period of time.
• The security deposit is often refundable. Paying a large deposit upfront may not seem like a benefit, but once you close your account or graduate to an unsecured credit card, your deposit is usually refunded to you as soon as possible, as long as you paid your balance in full and on time each month.
• You can enjoy credit card benefits. Depending on the card you choose, some secured credit cards come with added benefits, like rewards, cash back, or lower fees.

How to apply for a secured credit card

To open a secured credit card, you must be at least 18 years old. You can typically apply in the same way you would a traditional unsecured credit card—by completing an application online or in person.

Once you submit your application, the credit card issuer will examine your credit score and credit history. That will help determine the deposit needed to open your account. Shortly after you’re approved and pay the deposit, you should receive your secured credit card in the mail.

Help build credit and earn cash back with our secured card

Whether you're starting out or building credit back, Huntington offers a secured credit card that can help you improve your credit. There are no monthly fees, earn 1% cash back on all purchases, and receive Late Fee Grace^® in case you miss a payment^¶. Plus, you could automatically graduate to our Cashback Credit Card as early as seven months after opening the secured credit card. Apply for a Huntington secured credit card online or visit a branch for more information^†.

Tips for using a secured credit card

Whether it’s a secured or unsecured credit card, most of the same rules apply when it comes to using a credit card responsibly:

• Pay your balance on time. On-time payments are one of the most important factors when calculating your credit score. Paying your bill before it’s due could help improve your credit score. Set a recurring reminder or enable autopay to ensure you make your payments on time. Huntington offers Bill Pay to automatically send your payments when they’re due.
• Pay your balance in full each month. If possible, pay your whole credit card balance rather than the minimum payment due. By paying your full credit card balance each month, you’ll avoid paying interest on top of what you already owe.
• Keep credit utilization low. Credit utilization looks at the amount of credit you owe compared to the amount of credit you have available. Try using 30% of your credit limit or less to help demonstrate responsible credit use. Also note that using below 30% of your credit limit is a general guideline, so understand that using even less is better for your score.
• Make small purchases each month. Secured credit card limits are usually lower than unsecured credit card limits because they’re based on your initial deposit. That means it could be easier to cross the 30% credit utilization threshold than you think. Monitor your spending and limit your secured credit card use for smaller purchases like coffee or gas.
• Keep an eye on your credit score. A secured credit card could help improve your credit score but could also hurt your credit if you miss payments or exceed your credit limit. Check your credit score regularly to understand how your secured credit card activity may be affecting your credit. With Huntington’s secured credit card, you can check your FICO score every month, free of charge‡.
• Find a credit card issuer that reports secured credit card activity. Some credit card issuers may not report secured credit card accounts to credit bureaus, which means that activity wouldn’t be factored into your credit score. Before opening a secured credit card, be sure to ask the credit card issuer if they report to credit bureaus. At Huntington, we report payment history, credit utilization, card open date, and other information to the three main credit bureaus.

If you don’t have experience establishing credit or you’re looking for an opportunity to rebuild your credit, a secured credit card may be the right option for you. Apply for a Huntington secured credit card online or visit a Huntington branch today.

Frequently asked questions about secured credit cards

Is a secured credit card a good idea?

Yes, secured credit cards can be a good idea for people looking to build or rebuild credit. They’re often easier to qualify for and help establish a positive payment history when used responsibly. However, there are trade‑offs to consider: you’ll need to provide an upfront deposit, credit limits are usually lower, and interest rates may be higher than unsecured cards. For many people, they’re a practical starting point that can lead to better credit opportunities over time.

How quickly will a secured credit card build credit?

A secured credit card can start building credit within a few months, though timelines vary by individual. Activity is typically reported to the credit bureaus within about 30–45 days, and consistent on-time payments may lead to meaningful score improvement in 3 to 6 months. Reaching a stronger credit profile often takes 1 to 2 years of responsible use. These timelines are general guidance and can vary based on your starting credit history and overall financial habits.

What credit score do you need for a secured credit card?

There’s typically no minimum credit score required to open a secured credit card, and approval is often possible with low or no credit history. Because the card is backed by a refundable deposit, it reduces risk for the issuer and makes it a more accessible option for building or rebuilding credit.

Can I get my security deposit back?

Yes, your security deposit is refundable. If you close your account in good standing or transition to an unsecured card, your deposit is typically returned as long as your balance is paid in full. If you have an outstanding balance or miss payments, the issuer may use the deposit to cover what’s owed.

What is the difference between a secured card and a prepaid or debit card?

A secured credit card is a form of revolving credit, meaning you borrow up to your credit limit and repay it over time, and your activity is typically reported to the credit bureaus, helping you build credit. While it requires a refundable deposit, it functions like a traditional credit card for purchases and monthly payments.

By contrast, debit and prepaid cards use money you already have, either from your bank account or funds you load in advance. Because they don’t involve borrowing, they generally don’t report to credit bureaus or build credit history.