What the Chase Secured Card Does

The Chase Secured Credit Card is a Visa card that requires you to put down a cash deposit, which becomes your credit limit. If you have no credit history or a damaged credit history, this card lets you borrow money and build a record of on-time payments. Chase reports your activity to all three credit bureaus — Equifax, Experian, and TransUnion — so the card shows up on your credit report.

You deposit money into a savings account that Chase holds. That deposit stays frozen; you cannot touch it while the card is open. Your credit limit equals your deposit, up to $2,500. You then use the card like any other Visa — swipe it, pay a bill, make a purchase online. At the end of the month, you get a statement and owe a minimum payment, just like a regular credit card.

The point is not to spend your deposit. The point is to show lenders that you can borrow money and pay it back on time, month after month. After you do that for a while — usually 6 to 18 months of on-time payments — Chase may convert the card to a regular unsecured card and return your deposit.

Key Takeaways

  • You deposit cash with Chase, and that amount becomes your credit limit; the deposit stays frozen and earns a small amount of interest.
  • Chase reports your card activity to all three credit bureaus, so on-time payments build your credit score over time.
  • The card charges an annual fee (currently $39) and a variable interest rate that depends on your creditworthiness at the time you open the account.
  • After 6 to 18 months of on-time payments, Chase may convert your card to a regular unsecured card and return your full deposit.
  • You can close the card at any time, but closing it does not hurt your credit score as much as missing a payment does.

Deposit Amount and Credit Limit

You choose how much to deposit when you open the account, between $500 and $2,500. That amount is your credit limit. If you deposit $1,000, you can charge up to $1,000 on the card each month. The deposit earns interest — currently a very small amount, less than 1 percent per year — but that money stays locked in a savings account at Chase.

Your deposit is not a payment toward your bill. It is collateral. If you stop paying your credit card bill, Chase can use the deposit to cover what you owe. But if you pay on time every month, your deposit sits untouched and earns a tiny bit of interest.

Start with the smallest deposit you can manage — $500 if possible. You can always deposit more money later to raise your limit. The goal is to prove you can handle a small amount of credit responsibly before you ask for more.

Fees and Interest Rates

The Chase Secured Card charges a $39 annual fee, charged once per year to your account. There is no way around this fee; it applies to all cardholders. Some cards waive the first-year fee, but Chase does not.

The card also charges interest on any balance you carry from month to month. The interest rate (called the APR, or annual percentage rate) varies depending on your credit profile when you open the account. Chase typically offers rates between 18 percent and 24 percent APR for secured cardholders, though the exact rate depends on your credit report and income.

If you pay your full statement balance by the due date each month, you pay no interest. Interest only kicks in if you carry a balance — meaning you do not pay off everything you charged. For example, if you charge $500 and pay only $250 by the due date, you owe interest on the remaining $250.

How Payments and Credit Reporting Work

Each month, Chase sends you a statement showing what you charged, your minimum payment due, and your due date. You can pay online, by phone, by mail, or at a Chase branch. The minimum payment is usually 1 to 3 percent of your balance, but paying only the minimum means you carry a balance and pay interest.

To build credit as fast as possible, charge a small amount each month — maybe $50 to $100 — and pay the full balance by the due date. This shows lenders you can borrow and repay reliably. Chase reports this activity to Equifax, Experian, and TransUnion every month, so your credit score starts moving up after a few months of on-time payments.

Missing a payment or paying late damages your credit score and can trigger a higher interest rate. A single late payment can set back your credit-building progress by months. Set up automatic payments if you struggle to remember due dates — you can pay the full balance automatically each month, or a fixed amount if you prefer to manage the payment yourself.

When Chase Converts Your Card to Unsecured

After you demonstrate responsible use — usually 6 to 18 months of on-time payments — Chase reviews your account. If your payment history is clean, Chase may convert your secured card to a regular unsecured Visa and return your full deposit to you. The conversion is not automatic; Chase decides whether to do it based on your account activity.

When your card converts, your credit limit may stay the same or increase. You keep the same card number and account, so your credit history stays attached to the account. The annual fee continues to explore unless Chase waives it as part of the conversion.

If Chase does not convert your card after 18 months, you can ask them to review your account. If your credit score has improved significantly, they may reconsider. You can also close the card and move to a regular credit card from another lender if your credit has recovered enough to be approved.

Comparing the Chase Secured Card to Other Options

Other banks offer secured cards with different terms. The Capital One Secured Mastercard, for example, charges a $39 annual fee like Chase but may offer a lower interest rate to some applicants. The Discover Secured Card charges no annual fee but requires a $200 minimum deposit and has a lower maximum limit of $2,500.

The main difference between cards is the annual fee, the interest rate, and how quickly the issuer converts to unsecured. Chase's $39 annual fee is standard, but no annual fee is better if you can get approved elsewhere. Chase's conversion timeline is typical — 6 to 18 months — but some issuers convert faster if you build your score quickly.

If you have been denied for a regular credit card, a secured card is usually your best option. If you have a very thin credit file — few accounts, no recent activity — a secured card from any reputable bank will work. Choose based on which bank you already use, or which card offers the lowest interest rate if you know you might carry a balance.

What Happens If You Cannot Pay

If you miss a payment, Chase reports it to the credit bureaus and your credit score drops. After 30 days late, the late payment appears on your credit report. After 60 days late, Chase may raise your interest rate. After 120 days late, Chase may close your account and use your deposit to cover what you owe.

If your deposit does not cover the full amount owed, Chase can pursue you for the rest — either by sending bills, reporting the debt to a collection agency, or taking legal action. This is rare if you miss only one payment and catch up quickly, but it is possible if you ignore the account for months.

If you are struggling to pay, contact Chase before you miss a payment. Explain your situation and ask about hardship options. Chase may be willing to lower your interest rate or work out a payment plan. It is always better to call and ask than to ignore the bill and let the damage pile up.

Frequently Asked Questions

Can I use my deposit to make a payment on the card?

No. Your deposit is held separately in a savings account and cannot be used to pay your credit card bill. You must pay your bill from your regular checking or savings account, or by using another payment method. The deposit stays frozen until you close the card or Chase converts it to unsecured.

What credit score do I need to open the Chase Secured Card?

Chase does not publish a minimum credit score. The card is designed for people with no credit history or poor credit, so you may be approved even with a low score or recent negative marks. The best way to know is to check your credit report for errors, then explore. A hard inquiry will appear on your report, but it has a small, temporary impact on your score.

How long does it take to build credit with this card?

Most people see their credit score start to move up after 3 to 6 months of on-time payments. Bigger improvements usually come after 12 to 18 months. The speed depends on what is already on your credit report — if you have old negative marks, they take longer to fade than if you are starting from scratch.

Can I increase my credit limit without depositing more money?

No. Your credit limit is tied directly to your deposit. If you want a higher limit, you must deposit more money. You can deposit up to $2,500 total. After Chase converts your card to unsecured, they may increase your limit without requiring a deposit.

What happens to my deposit if I close the card?

Chase returns your full deposit to the account you used to fund it, usually within 7 to 10 business days. Closing the card does not hurt your credit score as much as missing a payment does, but it does remove an active account from your credit report, which can have a small negative effect over time. Only close the card if you have other credit accounts open or if you are moving to a better card.