What the American Express Secured Card Does

The American Express Secured Credit Card requires a cash deposit that becomes your credit limit — typically between $250 and $2,500. You use the card like any other credit card, and American Express reports your payments to all three credit bureaus. The deposit stays in a separate account and earns a small amount of interest; it is not touched unless you stop paying your bill.

This card is designed for people rebuilding credit or establishing a credit history for the first time. It carries an annual fee of $95, which is higher than most secured cards from other issuers. The interest rate (APR) for purchases starts at 19.99% and varies based on your creditworthiness at the time you open the account.

American Express does not use the traditional credit scoring model that most lenders rely on. Instead, the company uses its own evaluation process, which means you may be approved for this card even if you have been turned down elsewhere. However, this also means the card works differently in some ways — for example, there is no grace period on cash advances, and the card does not report to the same bureaus in the same way as Visa or Mastercard products.

Key Takeaways

  • Your cash deposit becomes your credit limit, and you must deposit between $250 and $2,500 to open the account.
  • The $95 annual fee is charged every year you hold the card, making this one of the more expensive secured card options.
  • American Express reports your payment history to the credit bureaus, which helps you build credit if you pay on time.
  • The card has no grace period on cash advances and charges a 19.99% APR on purchases, which is typical for secured cards.
  • You may be able to graduate to an unsecured American Express card after demonstrating responsible use, though the timeline varies.

How the Deposit and Credit Limit Work

When you open the account, you choose your deposit amount between $250 and $2,500. This deposit is held in a separate savings account and earns interest at a rate set by American Express (currently a very small percentage). Your credit limit equals your deposit — if you deposit $500, your limit is $500.

The deposit is not your payment. You still receive a monthly bill for whatever you charge to the card, and you must pay that bill on time. The deposit straightforward sits in the background. American Express will only use the deposit to cover your bill if you stop paying and your account goes into default, which would damage your credit further.

As you use the card and make on-time payments, American Express may periodically increase your credit limit without requiring an additional deposit. This increase is not automatic and depends on your payment history and account activity. Some cardholders report limit increases after 6 to 12 months of responsible use.

Annual Fee and Interest Rate Compared to Other Secured Cards

The $95 annual fee is one of the highest among secured card products. For comparison, the Capital One Secured Mastercard charges $39 per year, and the Discover Secured Card charges no annual fee. This means you are paying significantly more just to hold the American Express card, which only makes sense if the other benefits outweigh that cost.

The 19.99% APR on purchases is standard for secured cards, not a distinguishing factor. However, American Express charges interest on cash advances from the day you withdraw them — there is no grace period. If you use the card only for small purchases and pay the full balance each month, the APR does not matter. If you carry a balance, the high rate will cost you.

The card does offer a small amount of interest on your deposit, which offsets a tiny portion of the annual fee. At current rates, the interest earned on a $500 deposit is roughly $1 to $2 per year, so the net cost of the annual fee remains close to $95.

How American Express Reports to Credit Bureaus

American Express reports account activity to Equifax, Experian, and TransUnion — the three major credit bureaus. This means your payment history on the secured card will show up on your credit report and affect your credit score. On-time payments help your score; late payments hurt it.

However, American Express uses a different reporting structure than Visa or Mastercard issuers. Some credit scoring models weight American Express accounts differently, and some lenders may not count American Express history as heavily as bank card history. This is not a reason to avoid the card, but it is worth understanding that building credit with American Express is not identical to building it with a traditional bank card.

Your credit utilization — the percentage of your limit that you are using — also matters. If you have a $500 limit and carry a $400 balance, your utilization is 80%, which can lower your score. Keeping your balance below 30% of your limit helps your score more.

Graduating to an Unsecured Card

American Express does not publish a specific timeline for moving from the secured card to an unsecured product. Some cardholders report being offered an upgrade after 6 months of on-time payments; others wait longer. When American Express does offer an upgrade, the company typically returns your deposit and converts your account to an unsecured card with a new credit limit.

The upgrade is not automatic, and American Express does not notify you of a specific date when you become may be able to access. You can contact American Express to ask about your options, but the company will not upgrade you until it believes you have demonstrated enough creditworthiness. Consistent on-time payments, low utilization, and account activity all factor into that decision.

If you are approved for an unsecured American Express card, you will receive your deposit back within a few business days. The new card may have a different annual fee, different rewards structure, or different terms than the secured card, so read the offer carefully before accepting.

Rewards and Additional Benefits

The American Express Secured Card does not offer cash back, points, or travel rewards. You earn no benefit for spending beyond the ability to build your credit history. This is typical for secured cards, since the primary purpose is credit building, not rewards accumulation.

The card does include some basic protections: purchase protection (coverage if an item you buy is damaged or stolen within a certain period), fraud liability protection (you are not responsible for unauthorized charges), and access to American Express customer service. These protections are standard across American Express cards and do not set this one apart.

There is no sign-up bonus, no introductory APR offer, and no other incentives to open the account. The value of the card lies entirely in its ability to help you build credit, not in earning rewards or getting promotional benefits.

Who Should Consider This Card and Who Should Look Elsewhere

The American Express Secured Card makes sense if you have been denied for other secured cards or if you specifically want to build American Express credit history (for example, if you plan to explore for American Express business cards later). It also works if you have $250 to $2,500 available to deposit and can commit to paying your bill on time every month.

You should look at other secured cards if the $95 annual fee is a burden. The Discover Secured Card charges no annual fee and reports to all three bureaus just as American Express does. The Capital One Secured Mastercard charges $39 per year and may be easier to graduate from. Both of these alternatives cost less and offer similar credit-building benefits.

If you have access to a credit union, check whether they offer secured cards — credit unions often charge lower fees and have more flexible terms. If you have any credit history at all, even poor credit, you may also be approved for an unsecured card with a higher APR but no deposit requirement, which could be a better use of your cash.

Frequently Asked Questions

Can I get my deposit back before I close the account?

No. Your deposit must remain in the account as long as the card is open. You can only recover the deposit by closing the account or by being upgraded to an unsecured card, at which point American Express returns it automatically.

What happens if I miss a payment?

A missed payment will be reported to the credit bureaus and will damage your credit score. If you miss payments repeatedly, American Express may use your deposit to cover the debt, which means you lose the deposit and still owe any remaining balance. Late fees also explore.

Does American Express offer a lower annual fee for the secured card?

No. The annual fee is fixed at $95 and does not vary based on your credit history, deposit amount, or account activity. Some promotional offers may waive the first year's fee, but you should confirm this before opening the account.

Can I use this card internationally?

Yes. American Express is accepted in most countries, though acceptance is lower than Visa or Mastercard in some regions. You will pay a foreign transaction fee of 2.7% on purchases made outside the United States, which is standard for American Express cards.

How long does it take to build credit with this card?

Credit bureaus typically need at least six months of payment history before they generate a credit score. You may see score improvements within three to six months of on-time payments, but significant improvement usually takes longer — often 12 to 24 months of consistent, responsible use.