What type of credit card requires a cash deposit as collateral?

A credit card that requires a cash deposit as collateral is a secured credit card.

The deposit typically establishes or supports the card’s credit limit, although the exact relationship varies by issuer. The cardholder still makes purchases and receives statements like other cardholders, and the deposit is generally not used to pay ordinary monthly bills.

Secured cards are often marketed to people building or rebuilding credit histories. If the account is managed responsibly, an issuer may later return the deposit or convert the account to an unsecured card, depending on its policies.

A secured card is different from a prepaid card. A prepaid card spends money loaded in advance and normally does not extend credit, whereas a secured card provides a credit line backed by collateral.