A secured card can help you establish a credit history. This is done by depositing an amount of money (usually between $300 and $10,000) with the lender to act as a collateral savings account to back the card. This gives the card issuer some protection, since they will be able to liquidate those savings and apply them to the balance if you default on your credit card payments. You can make purchases with your card up to the amount you have in your security deposit account.

Secured cards are common among consumers who have poor credit or no credit, and can't get a standard credit card. Based on your credit and payment history with your secured card, you may qualify for an unsecured card at a later date.