Adam McCann, Financial Writer
@adam_mcan
A $300 secured credit card requires you to place a $300 deposit to open the account, and you will likely get a $300 credit limit in return. Other than the deposit, which the card's issuer will hold as collateral, the secured card will work like a regular credit card.
Secured credit cards are the easiest type of credit card to get approved for because of the deposit requirement. They are a practical, low-cost choice for people with bad credit or a limited credit history.
How a $300 Secured Credit Card Works
Minimum security deposit amounts vary by issuer.
Not all secured credit cards require a $300 deposit to open the account. The minimum security deposit is $200 for many secured cards, while some will require you to put down a deposit as high as $500.
You may raise your credit limit by adding to your $300 deposit.
Most issuers will allow you to put down a security deposit above the minimum requirement, up to a set maximum amount, which will get you a higher credit limit. You can either put down an initial deposit higher than the minimum amount required when you open the account or increase the amount of your deposit any time after, depending on the card. Some secured cards have maximum deposits as high as $25,000.
Your $300 deposit is fully refundable.
With secured cards, you’ll get your deposit back in full when you close the account in good standing. Some issuers may refund your deposit based on your creditworthiness and allow the secured card to graduate to an unsecured account.
Secured credit cards report to credit bureaus just like regular credit cards.
A secured credit card’s issuer will report your payments and credit usage to the credit bureaus, which can help you build or improve your credit history if you make payments on time and keep your credit utilization low.
Check out WalletHub’s guide on how secured credit cards work to learn more. Our editors’ picks for the best secured credit cards can also help narrow your search for the right credit-building card for your needs.
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People also ask
How does a $300 credit card work?
A $300 credit card allows cardholders to make purchases up to the amount of $300. Once you reach this limit, you cannot make any more transactions with the card until you pay down some of the outstanding balance to free up available credit. Cardholders also receive a monthly statement detailing their purchases and any associated fees, as well as the minimum amount to be paid by the due date.
As long as you use it responsibly, a $300 credit...
read full answer by John Miller, Credit Cards ModeratorDo you have to pay every month for a secured credit card?
No, you don’t have to pay every month for a secured credit card just to keep it open. Due to the fact that they require a security deposit for collateral, most secured cards don’t charge annual or monthly fees to offset the risks associated with lending.
If you decide to carry a balance on your secured credit card, then yes, you will have to make payments on a monthly basis until the balance is paid in...
read full answer by John Miller, Credit Cards ModeratorHow do payments on a secured credit card work?
Payments on a secured credit card work just like payments on a regular credit card. You need to make at least the minimum payment by the due date every month, or you will incur penalty interest charges and late fees.
How Payments Work on a Secured Credit Card
- Minimum Payment Amount: If you carry a balance on your secured credit card, you'll be required to pay at least the minimum payment amount specified on your...
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