A secured card works just like a traditional credit card with one big difference: You have to pay a deposit in order to get one.
Secured cards are specifically on the market for people who have no credit history, poor credit history or a damaged credit score. They are often considered a surefire way to build credit. With deposits as low as $49 (for the Capital One® Secured Mastercard®), they are meant to be accessible.
However, that doesn't mean that it's guaranteed you'll be approved for a secured card. A card issuer can still deny your application if you don't meet the underwriting requirements.
Below, CNBC Select reviews why you might not qualify for a secured credit card and what to do if you've recently been denied.
Usually, the biggest obstacle to getting a secured credit card is coming up with the refundable deposit that acts as collateral in case you don't pay your bill.
Most deposits are around $200, and if you want a higher credit limit, you'll need to deposit more money. The First Tech® Federal Credit Union Platinum Secured Mastercard®, for instance, allows cardmembers to deposit as much as $25,000 to receive an equivalent line of credit.
But even if you have the money for a deposit, you can be denied a secured card if your credit profile is deemed too risky to a lender. Each lender, or card issuer, has a set of standards as to what an ideal borrower looks like. This includes your credit score, your income and your current and former debts. If you have a long history of late or missing payments, delinquent accounts and/or bankruptcy, a prospective lender will have a harder time taking a chance that you'll be a reliable borrower.
In this case, the lender may say no and you'll need to rely on other means to build your credit history.
If you've been denied a secured credit card, the card issuer or lender should have sent you written notice explaining the reasons why you don't qualify. Read the letter thoroughly and call the issuer if you have any questions.
You should also comb through your credit report to make sure it's accurate. One in four Americans have an error on their credit report according to a 2012 study by the FTC. (Read more about how to dispute an error on your credit report.)
Next, consider other ways to build credit. These could include:
After taking the above steps, try applying for a new card in six months to a year. (Check out our list of best credit cards for building and improving credit.)
Information about the Capital One® Secured Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.