Question

What is the reason why someone would use a secured credit card

Answer 1

Secured credit cards come with many advantages, especially for people who have little or bad credit:

1. Rebuilding Your Credit Score
2. More Spending Power
3. You Can Graduate to an Unsecured Credit Card
4. Control Your Spending
5. Earn more interest
6. Access to Emergency Funds
7. Lower Fees Than Some Credit Cards

Answer 2

A secured credit card is a kind of credit card that is backed by a deposit or payment that functions as a collateral. If the holder of the credit card defaults, the bank will keep that deposit.

These sort of cards are typically issued for customers with an unreliable credit history or for subprime borrowers, as a strategy of the bank to protect itself against default. It can also help that sort of customers to improve their credit histories for future investments.