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Understanding Secured Credit Cards


What is a Secured Credit Card?

The secured credit card acquired its name because the card requires a cash deposit to use as collateral for the credit you have been extended. Secured credit cards are often a tool for individuals to establish credit or to assist individuals to rebuild their credit after a life-changing event such as a divorce, illness, or loss of employment. A secured credit card provided to build credit typically has a small line of credit, in the order of $500. The collateral goes into a deposit account, such as a savings, certificate of deposit, or money market savings account at the financial institution that approves your secured credit card.

Where Can I Get a Secured Credit Card and are There Risks?

Not all financial institutions offer secured credit cards; however, many credit unions do offer secured cards usually with lower interest rates and fewer fees. When shopping for a secured credit card, ask if there is an application fee, an annual fee, or a processing fee, and ask for the total fee amount. Ask whether you are still responsible for the fees or if the fees will be refunded, should you be denied for the card. Be cautious of advertisements that promote secured credit cards specifically for “bad credit” or “no credit” consumers. The Federal Trade Commission is a good resource if you have concerns: visit or call toll-free, 1-877-328-4357.

Benefits of Secured Credit Cards

A secured credit card will serve as a tool to build a good credit history only if the card’s issuer reports card activity to the credit bureaus. Make certain that the issuer will report your card activity to all three major credit bureaus, Experian, TransUnion, and Equifax. To make the best use of your secured card to build your credit rating, make limited purchases and, if possible, pay off your balance at the end of each billing cycle. If you do carry a balance, try to limit the balance amount to 20% or less of your line of credit. For example, a 20% balance on a $500 line of credit equals $100. As you prove you are using your secured card responsibly, you may receive an offer for a line of credit increase or the opportunity for an unsecured credit card.

Utilities Employees Credit Union does offer our members a secured credit card. The Share-Secured VISA® Power Card™ helps credit-challenged members to save money with a low variable rate by securing their card with funds already in their Share Savings Account. Members continue to earn dividends on their savings funds while enjoying card benefits including: 

  • No Application Fee
  • No Annual Fee                                                 
  • No Minimum Interest Charge Fee                  
  • No Balance Transfer Fee                                   
  • No Transaction Fee for Purchases
  • No Cash Advance Fee
  • Free fraud and personal identity theft protections

Open a UECU VISA® PowerCard™ and you will earn DOUBLE VantagePoints™ for the first 30 days.* VantagePoints™ Rewards are one of three UECU Reward Programs. You will also receive 1,000 VantagePoints™ for making your first purchase, plus 500 VantagePoints™ for activating your new card.*

*Member must be 18 years of age or older to earn VantagePoints™. Transactions must be signature-based. VantagePoints™ are earned net of credits. Activation, first purchase and double VantagePoints™ are earned on new