Secured credit cards are an option for many people with bad credit or no credit history who find it difficult to get approved for a regular credit card. This is because these cards require a cash deposit, which protects the card issuer in case the card holder does not pay the bill.

Most secure cards require a deposit of at least $ 200 or $ 300, although at least one card offers an option for a lower deposit. Each secure card allows you to deposit more than the minimum, but most set a maximum deposit amount. Your deposit is usually equal to your credit limit. Once you’ve improved your credit enough to qualify for a regular “unsecured” card, you can upgrade or close your secure account and get your deposit back.

Below are the deposit requirements for some of the most popular secure credit cards. Your local bank or credit union may have additional options.

If the minimum is all you can afford, it is perfectly acceptable to pay only that amount. You will just have to be very careful how you use your card. The purpose of a secured card is to build your credit, and a key part of your credit scores is use of credit, the percentage of your available credit that you are using. Credit scoring models tend to penalize using more than 30%, so if your credit limit is $ 200, you won’t want your balance to go over $ 60.

If you can afford a higher deposit, consider giving yourself some extra flexibility and some extra wiggle room. A deposit of $ 500 or $ 1000 increases this threshold from 30% to $ 150 or $ 300. As you can see in the graph above, there are some maps that allow you to go much higher. The tool below calculates the amounts of 30% and 10% for deposit amounts up to $ 5,000:

Some people have bad credit but a lot of cash; for them, raising a few hundred or even a few thousand dollars for a secure deposit by card is not a big problem. When you live paycheck to paycheck, however, finding an extra $ 200 can be a big hurdle. NerdWallet has a guide to saving for a secure deposit by card it’s full of advice and actionable ideas.

One important thing to know is that once you are approved for a secure card, you do not have an indefinite period of time to make the deposit.

Each secure credit card issuer has its own rules for paying or “funding” the deposit:

• Some require you to pay the deposit immediately upon approval. They can request bank account information on the app itself and immediately withdraw the money.

• Some require you to open a linked savings account. This is common in credit unions, and some banks do as well. You open an account with the issuer and your account balance then becomes your deposit and determines your credit limit.

• Some give you a fixed deadline to pay the deposit. If the deposit is not funded by the end of this period, the status of your request will change from “approved” to “rejected”.