Credit card applications A primer
When you take out a secured credit card, you leave a deposit with the lender as a security. Your credit line is equal to the amount you deposited. You use the secured credit card just like a regular, unsecured credit card, charging to it and paying the bill as usual. If you default, however, your repayment comes out of the security. In effect, it's a low risk credit line for the lender, because you are not able to spend more than you have given them, and they know they will be repaid in full if something happens.