Secured credit cards are the same as unsecured or regular credit cards. The only difference is you are required to put your own money down as a deposit, normally $300-$500. This assures the creditor or lender you’ll repay your debt. Your credit limit usually starts at the amount of your deposit.
Don’t mistake a debit card with a secured credit card. Many people make the mistake of believing they are the same. Banks do not report your debit card usage to the credit bureaus; debit cards are not extensions of credit. They are just a convenient way to access funds in your bank accounts.
Creditors typically report secured credit card usage to the credit bureaus, secured credit cards are an extension of credit. When you purchase something on your secured credit card the amount is not deducted from your security deposit.
Each time you use your secured credit card or charge something, you are borrowing money from the company and obligated to pay back your debt. As a result, depending on how responsible you are at using your secured credit card will affect your credit report, both positively and negatively.