Consumer Credit Regulation: 8.5.1.3 Secured Cards
Another product targeted at consumers with poor or nonexistent credit histories is the secured credit card. A secured credit card requires the consumer to maintain a deposit with the lender, which serves as collateral for the line of credit.337 The Truth in Lending Act generally prohibits a credit card lender from exercising a right of set-off against a consumer’s deposit account, but allows a consensual security interest if certain requirements are met.338