What type of credit card is backed by a savings account used as collateral?

A secured credit card is designed for individuals who may have limited credit history or have faced difficulties obtaining credit in the past. It requires the cardholder to deposit a certain amount of money in a savings account, which serves as collateral for the credit limit on the card. This deposit minimizes the risk to the lender since it can be used to cover any unpaid balance on the account. As a result, secured credit cards can help users build or rebuild their credit when used responsibly, as they report to credit bureaus just like traditional credit cards.

The other types of credit cards mentioned do not have this collateral arrangement. Unsecured credit cards do not require a deposit and are issued based on creditworthiness. Cash-back credit cards provide rewards in the form of cash back on purchases but are not secured by a savings account. Business credit cards are tailored for business expenses and usually do not require collateral in the same way that secured cards do. Thus, the secured credit card is uniquely characterized by its reliance on a savings account as collateral.