If you don’t have a credit history, an escrow card can be the first step in getting started. If you have a low credit score that makes it difficult for you to qualify for an unsecured credit card or other types of credit, an escrow card can help you re-establish your credit.
How does a security deposit card work?
Escrow cards are issued by most major banks and credit card companies. As with a credit card, you have to apply for a secured card. Once approved, you can use your escrow card for everyday expenses that you can pay for immediately, like grocery shopping or a vacation reservation.
When can I qualify for an unsecured credit card?
If you use your card properly, your credit score should improve over time. Once your score has improved, you will have several options. You will be able to keep your credit card secured, cancel it, or ask your issuer about an upgrade to an unsecured credit card, which would be better for your credit score than opening a new account.