What is a secured credit card?
Written by
Emily Tye
Reviewed by
Amy LancashireA secured credit card is a credit card that needs a cash deposit upfront. The provider keeps the deposit in case you don't repay, and the amount often matches your credit limit. You use the card and pay it off each month like any other credit card, and you get the deposit back when you close the account with nothing owed.
Secured cards are common in the US but rare in the UK. Instead, some UK lenders offer unsecured credit builder cards to people with little or poor credit history.
How does a secured credit card work?
A secured card works like a standard credit card, with one extra step at the start.
You pay a deposit. The provider sets this money aside. You can't spend it, and it isn't used to pay your monthly bill.
You get a credit limit. Your credit limit is linked to your deposit and is often the same amount. The provider still checks you can afford the repayments before approving you.
You repay each month. You get a statement and need to make at least the minimum payment by the due date. You'll usually be charged interest on any balance you carry over.
The deposit covers missed payments. If you don't pay, the provider can use some or all of the deposit to cover what you owe.
You get the deposit back. When you close the account with nothing owed, the deposit is returned. Some providers return it sooner if you've managed the account well.
For example, say you pay a £300 deposit and get a £300 credit limit. You spend £120 in your first month. If you pay the £120 by the due date, nothing comes out of your deposit. If you later close the account with £50 still owed, the provider would typically take the £50 from your deposit and return the remaining £250.
This is a simplified illustration. Terms vary between providers, so check how yours handles the deposit before you apply.
Can I get a secured credit card in the UK?
Yes, but very few UK lenders offer them.
As of October 2026, at least one UK bank asks some applicants for its credit builder card to pay a refundable security deposit, depending on their credit history. It's a different set-up from a traditional secured card, where every cardholder pays a deposit:
In this example, the deposit may be asked for if you're building your credit history from scratch, have recently moved to the UK, or are repairing your score
Watch out for US information
Most of what you'll find about secured cards online, including many AI-generated answers, is written for the US market. Signs you're reading US information include:
Deposits and credit limits quoted in dollars
Credit scores out of 850. UK credit reference agencies each use their own scale, which is why your score differs between sites
References to 'credit bureaus'. UK lenders and regulators tend to say 'credit reference agencies', and the 3 main ones are Experian, Equifax and TransUnion
Is a credit card secured or unsecured debt?
Standard credit cards in the UK are unsecured debt. The lender doesn't hold any of your assets as security, so it has no direct claim on your belongings if you stop paying. It can still chase the debt, including through the courts, and missed payments can be recorded on your credit file.
In the UK, 'secured' borrowing usually means borrowing tied to an asset you own, such as your home or car. Mortgages and secured loans are common examples. If you don't repay, the lender can take and sell the asset as a last resort.
A secured credit card isn't secured against your home. The only security is the cash deposit you've paid. If you don't repay, the provider can keep some or all of that deposit.
Will a secured credit card build my credit score?
Yes, if you manage it well. In the UK, credit cards show up on your credit file, so how you use one shows lenders how you handle borrowing.
The habits that help are the same as for any credit card:
Pay on time, every month. Missed payments stay on your file for 6 years and can make it harder to get credit
Keep your balance low. Aim to keep your credit utilisation below 25% of your limit.
Read more about how to use a credit card to build credit.
Secured vs unsecured credit cards
Secured credit card | Unsecured credit card | |
|---|---|---|
Upfront deposit | Yes, refundable | No |
How your limit is set | Linked to your deposit, often the same amount | Based on your credit history and what you can afford |
If you miss a payment | The provider can use your deposit to cover it, and the missed payment can still be reported | The missed payment can be reported, and the lender chases what you owe |
UK availability | Rare | Widely available, including credit builder cards |
What are the UK alternatives to a secured credit card?
If you're looking at secured cards to build or rebuild your credit, these options can help, and they're easier to find in the UK.
Credit builder cards. Cards for people with little or poor credit history. Most don't ask for a deposit, and the provider sets your limit based on your credit history and what you can afford. Before you apply for any card, an eligibility checker can show your chances of approval using a soft credit check, which other lenders can't see and which doesn't affect your score. Find out more about credit builder credit cards.
Credit builder schemes. You make regular payments, which are reported to the credit reference agencies like loan repayments. With some schemes, the money is saved and returned to you after a set period. With others, you're paying a fee you don't get back. Fees, minimum terms and charges to withdraw your savings vary, so check the total cost before you sign up.
Rent reporting. If you rent, rent reporting can add the rent payments you already make to your credit file.
Secured credit card FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
