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Everything you ever wanted to know about security funds...

If you’ve been browsing for a credit card, you may have heard about secured credit cards. But what are they?

A secured credit card works just like any other credit card, but it requires security funds, which act as your collateral for credit and all the perks of a credit card. That’s the gist of it, but let’s address some of the more common questions about security funds.

What are security funds?

Security funds are an amount of money held as collateral when you’re given access to credit. The amount isn’t necessarily equal to your credit limit.

Why would I provide security funds?

Security funds are a way to show that you’re committed to using your card responsibly. If you’ve already built your credit, your credit score reflects your history of good credit habits. But if you’re in a place where you’re building or rebuilding your credit, you’ll provide security funds as collateral for a credit card instead of relying on a credit score to speak to your credit history.

What do I get in return when I submit security funds?

Security funds give you access to credit, which you might not necessarily have if you’re new to credit or rebuilding your credit history. When you’re acing good credit habits like staying within your credit limit and consistently making at least your minimum payments on time, you’ll be on the right track to improving your credit score.

Can I use my security funds to pay off my balance?

No, you can’t use your security funds to pay off your balance. They’re deposited in a separate account for safekeeping.

Do I get my security funds back?

Yes, they’ll be returned to you within 60 days of closing your account, as long as you’ve paid off your balance in full and your account’s in good standing.

Looking for another option? Find out about the differences between secured credit cards and prepaid cards.

* If approved by Quick Check, you can be 100% sure your card application will be accepted as long as:

1. There’s been no change in your credit file information, personal information or financial status from the time you receive your Quick Check results to the time you apply for one of our credit cards;

2. You’re at least the age of majority in the province or territory you live in;

3. Your application isn’t flagged for fraud prevention;

4. You don’t have an existing Capital One account; and

5. You haven’t applied for a Capital One account in the last 30 days or had an account with us that was not in good standing in the last year. In good standing means not past due, over limit, fraudulent, restricted, or part of a consumer credit counselling program or bankruptcy.

In some cases, we may not be able to open an account for you even though your application was approved. This can happen if we’re unable to verify your identity, or you don’t provide the required security funds if you’re approved for a Secured Mastercard®.