What the American Express Secured Card Is

The American Express Secured Credit Card is a card designed for people building or rebuilding credit history. You put down a cash deposit, usually between $250 and $2,500, and that deposit becomes your credit limit. American Express reports your account activity to the three major credit bureaus — Equifax, Experian, and TransUnion — so on-time payments help raise your credit score over time.

The card itself works like any other American Express card: you can use it to make purchases, pay the full balance or a portion of it each month, and earn rewards on some purchases. The main difference is that your deposit sits in a separate account and secures the card issuer against the risk that you won't pay your bill.

American Express does not automatically convert this card to an unsecured card after a set period. Conversion happens only if American Express invites you to upgrade, which typically occurs after you've shown consistent on-time payments and your credit profile has improved. You can also request a review after six months of responsible use.

Key Takeaways

  • Your cash deposit becomes your credit limit, and American Express holds it in a separate account while you use the card.
  • Monthly payments are reported to all three credit bureaus, so the card can help you build credit if you pay on time.
  • The card carries an annual fee of around $95, which is charged to your account in the first month and each year after.
  • You can request a credit limit increase after six months, which may require an additional deposit.
  • Conversion to an unsecured card is not automatic and depends on American Express reviewing your account and deciding to offer it.

Deposit Requirements and Credit Limits

When you open the account, you choose your deposit amount between $250 and $2,500. This deposit is held in a money market account and earns a small amount of interest, though the rate varies. Your credit limit equals your deposit — if you deposit $500, your limit is $500.

You can request a credit limit increase after six months of on-time payments. If American Express approves the increase, you'll need to provide an additional deposit equal to the increase amount. For example, if your current limit is $500 and you want to raise it to $750, you would deposit another $250.

Your deposit remains separate from your monthly bill. Even if you pay your full statement balance each month, the deposit stays in the money market account and is not applied to your account. You get the deposit back only when you close the account or when American Express converts it to an unsecured card.

Annual Fee and Other Costs

The American Express Secured Card charges an annual fee of approximately $95. This fee is charged to your account in the first month and then once per year on your account anniversary. The fee is not waived in the first year, so you should factor this into your decision about whether to open the card.

There are no other regular fees for basic card use. You will not be charged a fee for making a purchase, paying your bill, or checking your balance. However, if you miss a payment, American Express may charge a late fee, and if you go over your credit limit, you may face an over-limit fee. Both of these are avoidable if you pay on time and stay within your limit.

If you use the card for a cash advance or balance transfer, American Express charges a fee for that transaction, typically 3% to 5% of the amount. These fees are separate from the annual fee and are charged each time you use these services.

How Payments and Credit Reporting Work

You can make payments online, by phone, or by mail. American Express typically requires a minimum payment each month, usually around 1% to 3% of your balance, though paying the full balance is the best way to avoid interest charges. Payments are due on a set date each month, and American Express reports whether you paid on time to the credit bureaus.

Your payment history is the most important factor in your credit score, so on-time payments directly help you build credit. American Express reports your account to Equifax, Experian, and TransUnion, so the positive history shows up on your credit report with all three bureaus. If you miss a payment, that also gets reported and can lower your score.

Interest charges explore to any balance you carry from month to month. The interest rate (APR) for purchases varies based on your creditworthiness at the time you open the account, but it typically ranges from 19% to 24%. You can avoid interest entirely by paying your full statement balance each month before the due date.

Rewards and Cardholder Benefits

The American Express Secured Card earns 1% cash back on all may be able to access purchases. This means for every dollar you spend, you earn one cent back. The cash back is credited to your account and can be used to pay your bill or withdrawn as a statement credit.

The card includes some basic cardholder protections, such as fraud liability protection — if someone uses your card without permission, you are not responsible for unauthorized charges. American Express also offers purchase protection on certain items, though the coverage is more limited than on some of their other cards.

The card does not include travel insurance, extended warranty protection, or concierge services. If these benefits are important to you, you may want to compare this card with other secured options before opening an account.

Steps to Open an Account

You can open an account online through American Express's website or by calling their customer service line. You'll need to provide your Social Security number, date of birth, income information, and current address. American Express will run a credit check, though they may open accounts for people with limited or poor credit history.

Once your process is submitted, American Express typically makes a decision within a few minutes to a few hours. If approved, you'll be asked to fund your deposit. You can transfer money from a bank account, and the deposit usually appears in your money market account within one to two business days. Your card is typically mailed to you within 7 to 10 business days after your deposit is received.

When your card arrives, you'll need to set up it before you can use it. American Express sends set up instructions with the card, and you can set up online or by phone. After set up, you can begin making purchases right away.

When to Request a Conversion to an Unsecured Card

American Express may invite you to convert to an unsecured card after you've demonstrated responsible use. There is no set timeline for this — it depends on your payment history, credit score improvement, and American Express's internal review process. Some cardholders are invited after 6 to 12 months, while others may wait longer.

You can request a review of your account after six months of on-time payments. Call American Express customer service and ask if they will consider converting your account. They may say yes, no, or ask you to wait a bit longer. If they decline, you can ask again in a few months.

When conversion happens, your deposit is returned to you, usually within 7 to 10 business days. Your credit limit on the new unsecured card may be the same as your secured limit or higher, depending on American Express's decision. The annual fee continues on the unsecured card, so conversion does not eliminate that cost.

Frequently Asked Questions

Can I use the card right away, or do I have to wait for it to arrive?

You have to wait for the physical card to arrive and be activated. American Express does not offer when ready card numbers or digital wallet access for the secured card before the physical card is activated. Once activated, you can use it in stores, online, and anywhere American Express is accepted.

What happens to my deposit if I close the account?

Your deposit is returned to you, usually within 7 to 10 business days of closing the account. Make sure your account balance is paid in full before you close it, because any remaining balance will be deducted from your deposit before it's returned to you.

Will the annual fee hurt my credit score?

The annual fee itself does not directly affect your credit score. However, if the fee causes you to miss a payment or go over your credit limit, that can hurt your score. As long as you budget for the fee and pay your bills on time, it will not damage your credit.

Can I increase my credit limit without depositing more money?

No. Any credit limit increase requires an additional deposit equal to the increase amount. If you want to raise your limit from $500 to $750, you must deposit another $250. American Express does not offer unsecured credit limit increases on this card.

What credit score do I need to open this card?

American Express does not publish a minimum credit score requirement for the secured card. People with limited credit history, poor credit, or no credit history may be approved. Your approval depends on factors beyond just your credit score, including your income and account history with American Express.