How do secured credit cards work?

[buffetbuster]

I've been looking into getting a secured cc now that our BK is discharged and closed. We want to start to rebuild our credit and realized that renting a vehicle is a lot easier with a credit card than a debit card.

I'm curious how secured credit cards work. I know that I will front money. Do the cards match what I front. Say, I front $1000, will they match $1000 giving me a $2000 limit or will I just be using my own $1000 as available credit.

Any insight would be greatly appreciated.

[justbroke]

It depends on the bank and your credit worthiness. I received a secured card right out of bankruptcy from Firth-Third (5/3) Bank. They made my credit limit 66.67% of my deposit. (So, to get a $1,000 credit line, I had to deposit $1,500.) After 3 months of this, I complained and they removed the entire security -- the card is no longer secured! That doesn't happen for everyone.

I probably would only use a bank that provides $1 for $1 matching of the credit line.

[frogger]

HSBC/Orchid is 100%

[malf1204]

Capital one can be more than 100%

[doni49]

HSBC/Orchid is 100%

but then again, they charge an extremely high annual fee,

[help1234]

We went thru a local credit union. They froze the amount of our credit limit on the card, but we continue to receive interest on the frozen funds... and NO fees for the card. Except of course there is interest if we carry a balance, which we do not.

[frogger]

but then again, they charge an extremely high annual fee,

Perhaps, but mine was with no fee.

[oregonpilot]

We went thru a local credit union. They froze the amount of our credit limit on the card, but we continue to receive interest on the frozen funds... and NO fees for the card. Except of course there is interest if we carry a balance, which we do not.

I did the same....went thru local credit union. Put $500. in a secured acct and my limit is 500. on the credit card. No annual fees.
Earning interest. WOW i have made .32 since april. Hey better than paying interest.
They said that after a yr in would change over to non-secured. I don't really care about that. i would just assume leave it secured.
It states on my credit report that it is a secured card.

[drowning123]

I have Crap One. Deposited 200, they matched 151. It varies.