A secured credit card is, in nearly all respects, like a standard credit card except that they are secured against a savings account. Individuals with poor or no credit history may be unable to obtain a standard credit card; in these cases, a secured credit card may be offered. Usually the creditor will require the credit card holder to open an associated savings account where the card holder must deposit 100%-200% of the value of the line of credit. For example, a $1,000 deposit would result in about a $750 line of credit on the secured credit card.
The savings account accrues interest and the credit card operates as a normal credit card. In the even that the account becomes seriously delinquent, the creditor may seize funds from the savings account to pay off or pay down the credit card debt (note that this is usually not done on a regular basis-the credit card account holder is expected to routinely service the credit card debt).