Making a security deposit on a secured card is a way to help people with a limited or non-existent credit history receive a credit card. Security deposits are made at the time of account opening. They’re also a common form of collateral that a borrower looking to build their credit score or establish credit history can put down to support their creditworthiness.
For a bank credit card issuer, a security deposit is a powerful way for a cardmember to demonstrate responsibility for making future monthly payments and repaying their balance in full. While Chase does not offer secured cards, here’s some information about how security deposits work on credit cards.
How much are security deposits on credit cards?
Security deposits for secured credit cards can typically range from $200 upwards to a few thousand dollars. The security deposit is usually the same as your initial credit limit. Generally, to obtain a higher limit, you’ll need to make a larger deposit. But some secured credit cards are capped at a certain deposit amount.
When do you pay your credit card security deposit?
You pay the security deposit after completing an application and receiving initial approval for the card. Before filling out an application and putting your money down, be sure to check whether the card charges an annual fee or a setup fee. Also try to keep your credit utilization below 30% of the card limit, even on a card with a relatively low initial limit.
Whether you are using a secured or unsecured credit card, sticking to a moderate level of credit utilization, may improve your credit score and help with receiving new credit card offers.
Are credit card security deposits refundable?
Yes, deposits to secure a card are refundable, typically in two ways:
- When you voluntarily close out a paid in full account with the credit card company.
- When you are offered an unsecured credit card and your application is approved, you can switch your account.
How to get a credit card without a security deposit?
It’s possible for people with limited to no credit to obtain a credit card without a security deposit—that is, to receive an unsecured card as their first credit card. One way is to apply for a starter card or respond to a promotional offer you receive in the mail.
When evaluating a credit card offer received in the mail or online, verify the institution is credible. In addition, look carefully at the card’s introductory interest rate on charges or any balance transfers, as well as the regular APR.
Best practices when applying for a Freedom Rise card
One credit card designed for someone who wants to start building their credit today is Chase Freedom Rise℠. There are several benefits available to cardmembers. With Freedom Rise, for example, you can receive cash back on every purchase. The card also offers perks, such as three months of complimentary DoorDash DashPass membership.
To apply for a Freedom Rise credit card, visit your local Chase branch.
Note: Chase does not offer secured cards.
