Hello and welcome to the forums!
I moved the post over to the Rebuilding forum to people to answer what you might be able to do about the collections; however, your understanding of secured cards is unfortunately mistaken. You absolutely do owe them the money.
A secured card is simply a credit card secured with money a depository account in case you flake. Any charges on the card are a debt that you owe to Capital One same as any other credit card, and if you have a balance and then don't pay, a collection is the standard result.
There's two components of moving money to a secured card: 1) increase the CL as you did by adding money to the underlying deposit, and 2) paying the charges which have accrued on the credit line. It sounds as though you did #1, but not #2, and that is why the collection occurred to recover that debt. Presumably once you pay it they will refund the deposit back to you on the original secured card if they haven't already.
It sounds as though you may have thought it was like a Prepaid card; it is not - you are not depositing money to spend, it is to guaruntee the extension of credit only.
I can empathize as I once had my own snafu with a secured card a while ago ("you have the security deposit, why are you doing this?") but they are following proper procedure.
You say they are guaranteeing credit to you but they never did. I still don't understand how they have funds secured when i signed up?? But the only money i was able to use was my cash to begin with...if i paid 99 dollars they give me a card with 99 dollars. I used that 99 dollars then the next month put 99 dollars plus 20 on the card so my credit available would be 119 to use and i keep doing this each month until one month i don't put any money on the card next thing i know they are billing me...the amount they are billing me is for the previous month but if i place funds on the card the use it in that order how can i be billed for an amount that wasn't there first... they never guaranteed me a line of credit...they never gave me more than what cash i placed on the card...they declined me any funds except what i deposited first. Soo...i guess i don't get it. Btw thank you for moving it over. 
@MuzikGurl wrote:
You say they are guaranteeing credit to you but they never did. I still don't understand how they have funds secured when i signed up?? But the only money i was able to use was my cash to begin with...if i paid 99 dollars they give me a card with 99 dollars. I used that 99 dollars then the next month put 99 dollars plus 20 on the card so my credit available would be 119 to use and i keep doing this each month until one month i don't put any money on the card next thing i know they are billing me...the amount they are billing me is for the previous month but if i place funds on the card the use it in that order how can i be billed for an amount that wasn't there first... they never guaranteed me a line of credit...they never gave me more than what cash i placed on the card...they declined me any funds except what i deposited first. Soo...i guess i don't get it. Btw thank you for moving it over.
Going to link you one of the informational posts from here on MyFICO that discusses secured cards, I'd strongly encourage you to read through it as I think there's some confusion which it can address:
http://www.myfico.com/goals/creditcards/howcreditcardswork.aspx
@MuzikGurl wrote:
You say they are guaranteeing credit to you but they never did. I still don't understand how they have funds secured when i signed up?? But the only money i was able to use was my cash to begin with...if i paid 99 dollars they give me a card with 99 dollars. I used that 99 dollars then the next month put 99 dollars plus 20 on the card so my credit available would be 119 to use and i keep doing this each month until one month i don't put any money on the card next thing i know they are billing me...the amount they are billing me is for the previous month but if i place funds on the card the use it in that order how can i be billed for an amount that wasn't there first... they never guaranteed me a line of credit...they never gave me more than what cash i placed on the card...they declined me any funds except what i deposited first. Soo...i guess i don't get it. Btw thank you for moving it over.
Well, its obvious that you don't get it, even after its been explained to you. A secured card simply does NOT work like a prepaid card. You do not 'put money on the card'. You deposit money in a savings account. Then they issue you a credit card with a credit limit equal to the amount in the savings account, and the savings account is 'locked'. Then they wait 6 months and see if you are going to use the credit card in a responsible manner. When you wish to close the account, you pay the balance down to zero, CALL them and close the account, and then your savings account is released back to you to do as you wish. Yes, it does seem unnecessarily complex, to send them money just so they can send it back, but thats how it works. You probably could have CALLED them and told them you wished to close the account, and they probably would have simply applied the savings to the balance on the card, and paid you the difference, but instead, you seemd to have just assumed they would do all of that on their own, without any input from you.
Think of it as a credit card with 'training wheels'.
@Anonymous wrote:
@MuzikGurl wrote:
You say they are guaranteeing credit to you but they never did. I still don't understand how they have funds secured when i signed up?? But the only money i was able to use was my cash to begin with...if i paid 99 dollars they give me a card with 99 dollars. I used that 99 dollars then the next month put 99 dollars plus 20 on the card so my credit available would be 119 to use and i keep doing this each month until one month i don't put any money on the card next thing i know they are billing me...the amount they are billing me is for the previous month but if i place funds on the card the use it in that order how can i be billed for an amount that wasn't there first... they never guaranteed me a line of credit...they never gave me more than what cash i placed on the card...they declined me any funds except what i deposited first. Soo...i guess i don't get it. Btw thank you for moving it over.Well, its obvious that you don't get it, even after its been explained to you. A secured card simply does NOT work like a prepaid card. You do not 'put money on the card'. You deposit money in a savings account. Then they issue you a credit card with a credit limit equal to the amount in the savings account, and the savings account is 'locked'. Then they wait 6 months and see if you are going to use the credit card in a responsible manner. When you wish to close the account, you pay the balance down to zero, CALL them and close the account, and then your savings account is released back to you to do as you wish. Yes, it does seem unnecessarily complex, to send them money just so they can send it back, but thats how it works. You probably could have CALLED them and told them you wished to close the account, and they probably would have simply applied the savings to the balance on the card, and paid you the difference, but instead, you seemd to have just assumed they would do all of that on their own, without any input from you.
Think of it as a credit card with 'training wheels'.
And to add to your comment NormanH.....if you have paid on time every month some companies will give you back that deposit after a while and turn your secured card into a unsecured card......