This cash security deposit helps to protect the credit card company from recognizing a loss by issuing you a credit card, and then you failing to make payments.
Secured credit cards work by having the cardholder front a required deposit to open an account, reducing the risk to the credit card issuer of you defaulting or missing a payment.
How Can a Secured Card Help Build Credit and Improve Your Credit Score?
If you make your payments on time, your regular spending activity and collateral will help you to build your credit. To provide you more financial flexibility with time, you may opt to move to unsecured card issuers’ options.