It is issued based on the cardholder’s

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  1. Credit Card: A credit card is a financial tool that allows cardholders to make purchases on credit, up to a certain credit limit. It is issued based on the cardholder’s creditworthiness, determined by factors such as credit history, income, and financial stability. With a regular credit card, the cardholder does not need to provide a security deposit as collateral. The cardholder can use the credit card for purchases and transactions, and they are required to make minimum monthly payments on the outstanding balance. Failure to make timely payments can result in interest charges and potential negative impact on the cardholder’s credit score.
  2. Secure Credit Card: A secure credit card, also known as a secured credit card, is designed for individuals with limited or poor credit history or those who want to rebuild their credit. Unlike a regular credit card, a secure credit card requires the cardholder to provide a security deposit upfront, which serves as collateral for the credit limit on the card. The security deposit is typically equal to or a percentage of the credit limit. The secure credit card cardholder’s credit line is usually determined by the amount of the security deposit. By using the secure credit card responsibly and making regular payments, the cardholder can demonstrate their creditworthiness and potentially improve their credit score over time. In some cases, the card issuer may refund the security deposit and upgrade the cardholder to a regular, unsecured credit card after a certain period of responsible credit usage.

In summary, a regular credit card is issued based on the cardholder’s creditworthiness without requiring a security deposit, while a secure credit card requires a security deposit as collateral and is targeted towards individuals with limited or poor credit history. Both types of cards can be used for purchases and transactions, but a secure credit card offers an opportunity for individuals to establish or rebuild their credit.