A secured card has the credit line secured from banks perspective.
They are usually opted by people who are building their credit history or rebuilding. To get a secured card, a person has to deposit some fund in a collateral account with the CCC and they give you a Credit Card with CL equal to the amount you deposited.
its not a prepaid card, just that the CL is secured by your deposit by the CCC. You use the credit card just like any other card i.e. pay the minimum amount due of your purchases before the due date.
The security will be used by the bank if a person could not repay the credit he used.
Banks usually refund the security after a year or so i.e. graduate the secured card to unsecured card.
AFAIK there are no secured card without annual fee. The least I saw is $18 with Wells Fargo.
As i am building my credit history, I took a secured credit card from Wells Fargo for $1k.
Hope that answered your question.
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