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How Much Should You Deposit on a Secured Credit Card?

Written by Banks Editorial Team

Updated February 13, 2024​

3 min. read​

how much should i deposit on a secured credit card

If you’re thinking about applying for a secured card soon, chances are you already know a deposit will be required upon approval. But maybe you aren’t sure of the amount. Read on to learn more about typical deposit amounts, why a deposit is required and a debt product that doesn’t require a security deposit and could be ideal for your financial situation.

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What is a Deposit on a Secured Credit Card?

The deposit on a secured credit card is used as collateral. It’s held in an account and can be used by the credit card issuer to pay the balance in full and avoid taking a financial loss if you fall behind on the payments.

When Do You Have to Make the Deposit?

It varies by the credit card issuer. However, you’ll typically have to make the deposit:

  • As soon as you’re approved. You will be prompted to input your routing and account number so the security deposit can be withdrawn right away.
  • Within a certain timeframe. Some credit card companies give you a 30- to 60-day window to make the security deposit before rejecting your application.

There are also instances where you’re required to open a savings account at the bank or credit union if you’re approved for a secured credit card. The amount of the opening deposit typically serves as the security deposit and is equivalent to your credit limit. You cannot access these funds until you close your secured credit card or are upgraded to an unsecured credit card.

How Does Your Deposit Affect Your Credit on Your Card?

As mentioned above, the deposit amount is usually the amount of the credit limit you receive when you get a secured credit card. However, some credit card companies will extend a higher line of credit with a smaller deposit.

Should You Put a Deposit on a Secured Credit Card?

A cash deposit is required to open a secured credit card since it’s used as collateral in the event you fall behind on the payments. However, the amount the credit card companies require varies.

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What is a Good Amount for a Deposit on a Secured Credit Card?

You should only deposit what you can comfortably afford. But keep in mind that the credit utilization on the card, or the amount of the credit limit in use, shouldn’t be greater than 30 percent if you want to boost your credit rating. So, it may be more sensible to save up more money before opening a secured credit card if you believe you’ll need a more generous credit limit to stay below this threshold.

There are credit card issuers that offer secured credit cards with limits that exceed the required cash deposit, though. So they could be a better fit if you want a higher credit limit but don’t have a ton of funds at your disposal to deposit to open a secured credit card.

Can You Get Your Deposit Back?

You can get your deposit back if you pay your outstanding balance in full and close the card or get upgraded to an unsecured credit card by the issuer.

Other Things You Should Consider When Using a Secured Credit Card

Once you open a secured credit card and begin using it, keep the following in mind to ensure you manage your account more effectively.

Expenses

Spend wisely and try not to incur more charges than you can comfortably afford to repay in the same billing cycle. That way, you can avoid forking over a hefty amount of interest. Plus, you’ll keep your utilization low, which helps improve your credit rating.

Budget

Consider using the card to cover certain fixed monthly expenses. Doing so also helps keep spending in check, and you won’t rack up a higher balance than you can handle.

Payment

Try to pay your balance in full each month before the due date to help you meet your credit goals faster.

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Consider a Secured Charge Card

A secured charge card requires a cash deposit as collateral, which can help you manage your spending to have the funds to pay your card bill at the end of the month. If the card provider you use reports your positive payments to the credit bureaus, this can help you build or improve your credit scores.

An example of a secured charge card is the Current Build Card, where your spending balance is based on funds you choose to keep in your Current Secured Account. You can automatically top it or choose to use the money in other ways, like bank transfers. This means you can deposit as much or as little as you like and always have access to the funds if you need them, and use this card to help you improve your scores.

Aside from this card, the Current mobile app also offers a Current Spend Account, with budgeting tools to help you stay on top of your spending, savings pods that earn up to a 4.00% bonus, and crypto investing.

Visit the Current’s website to learn more or to open your free account.

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