What is a secured credit card?
A secured credit card is like any other standard credit card in terms of the usage, but requires that the card holder deposit a sum, as a security against the money spent on the card. At the end of the billing cycle the card holder pays out the balance amount, or a minimum balance and interest, like on any standard credit card
How does a secured credit card work?
For as long as the spending remains within agreed limits, the card functions like just another credit card, and only when the unpaid amount accumulates to more than what can be recovered from the deposit, the deposit will be appropriated by the card issuer. If the accumulated interests and fee, takes the balance to a figure more than the initial deposit, card users will be held liable for the excess amount.
Differences
The big difference that needs to be understood stems from the credit worthiness of the card holder or applier. Most secured cards are sought by people who don’t have enough credit worthiness for a regular credit card. With poor credit rating, regular credit card issuers may not be willing to offer a credit card and so the secured credit card becomes the only way. Since secured credit cards are offered, in typical situations, to people with poor credit, the interest rates are often more than that of a regular credit card. The rates and the fee involved, almost always, are more than that of a regular credit card.
Why we need one at all?
Every usage of the secured credit card is reported to the credit union and maintaining a decent paying pattern helps build credit. Almost everyone who uses a secured credit card, does so, to build credit and it is a pretty effective way to improve one’s credit. Often card issuers themselves offer better terms on seeing responsible usage. It is not very difficult to move from a secured credit card to a regular credit card.
Who offers secured credit cards–
In Singapore and Malaysia, established banks like DBS,UOB, OCBC, Citibank, HSBC etc offer the secure credit card options.
Credit Cards Information Blog 