You’ll receive a secured credit card when you sign up for a secured credit account. Secured credit is a form of credit that is supported by funds you set aside (security fund). The maximum credit limit for your card is determined by the security fund you have set aside.
The Neo Secured Credit card is ideal if you’ve never had a credit card, as it does not require a credit check.
How are secured credit cards different
Secured credit cards are not the same as prepaid cards or standard credit cards. The security fund you set aside is only used to determine your credit limit and isn’t meant to be used as payments. You'll need to make payments based on your statements.
How secured credit cards work
Secured credit cards are different from other credit cards because they require a security fund. A security fund refers to funds that are set aside while the credit account is active. The credit limit for the card is equal to the amount in the security fund.
Here's how secured credit cards work:
- Set your credit limit by adding money to your account
- Use your card to make purchases and get rewards
- View your statement online or on the Neo app.
- Make a payment for the amount due with funds in your Neo Money™ account or from an external account.
Build credit with a secured credit card
Secured credit cards are perfect for people who want to build their credit. Using your secured credit card and making payments on time can help you build your credit history. Here’s what makes up your credit score to help understand how credit reporting works.
Minimum and maximum security funds
You can read more about the maximum and minimum amount to secure funds.
Here are the limits for security funds:
- Minimum security funds: $50
- Maximum security funds: $10,000
Increasing your credit limit
Your credit limit is how much you can spend with your credit or secured credit card at a time. You can add to your security fund over time if you choose to increase your credit limit. You can only add increments of $50 when adding funds to your security fund.
Late or missed payments
If you make a late payment or miss a payment, you’ll be charged interest. To avoid the interest fees, make payments in full before your statement's due date.