Knowing how much to put down as a security deposit for a secured credit card is crucial. A secured credit card helps those with limited or no credit build or rebuild their credit score. In Canada, it's recommended that you put down a security deposit that matches the limit of the card. For example, if you are applying for a secured credit card with a limit of $1000, you should put down a security deposit of $1000.
A secured credit card allows you to build up your credit score without worrying about getting accepted for a regular credit card. It will help you rebuild your credit score if you can show responsible use of your secured credit card by paying on time and keeping your balance low.
The credit card company will hold your security deposit until you close your account. You can get a refund when you close your account and at the same time if you make all of your payments on time and in full. However, the credit card issuer will keep your security deposit and you won't be able to get a refund if you fall behind on your payments.
Remember that you should not put more than what you can afford as a security deposit. You should also avoid using more than 30% of your available credit limit. Make sure that you pay on time and in full because this will have a positive impact on your credit score.
Can I Put More Money on My Secured Credit Card?
You can put more money on your secured credit card. It’s a great way to build credit and show creditworthiness to potential lenders.
You can add more money to your deposit to increase your credit limit. For example, your credit limit will increase to $1,000 if you make a second deposit of $500.
The process of adding more money to your secured credit card is simple. You should speak to your credit card issuer and let them know that you'd like to increase your deposit. They'll provide you with the necessary forms and guide you through the process.
The money you deposit to open the account is not a loan. You cannot withdraw it and It will not earn any interest. It will be held until the account is closed.