by 
The Curious Bag
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There are two primary classes of credit cards: secured and unsecured. The primary difference between the two is how they are funded, or backed. Your credit history often determines which card is right for you.
Secured Credit Card
A secured credit card works like any other credit card, except that you must make a deposit into a collateral account to fund it. Your credit limit or line equals the amount of your deposit.
Unsecured Credit Card
An unsecured credit card is more common. In this case, a bank or other financial entity extends credit to a consumer. You promise to repay the lender under the terms of the agreement you signed with them.
Deposits
With secured credit cards, you must make an initial deposit to fund the card, and make ongoing deposits in order to keep it funded. With an unsecured card, there are no deposits; rather, you are granted a predetermined credit limit upon approval.
Considerations
According to Bankrate.com, secured credit cards tend to be most useful if you have poor or no credit history. After establishing or improving your credit, you often have the option of obtaining an unsecured card.
Benefits
While unsecured credit cards have benefits, they can cause problems such as excessive debt. A secured card operates more like a savings account, which does not allow you spend more money than you have.
Source:
Bankrate.com: Secured Credit Card Information
WellFargo.com: Sample Terms and Conditions for a Secured Credit Card
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