secured
si-KYOORD
/sɪˈkjʊərd/
Backed by collateral or a cash deposit, which protects the lender in case of default.
Secured credit cards require a cash deposit that usually equals the credit limit, making them low-risk for banks and ideal for building credit.
The story behind the word. From the Latin 'securus', meaning 'free from care or anxiety', from 'se-' (without) and 'cura' (care). In finance, a secured loan leaves the lender 'free from care' because they hold collateral to cover any losses.
Word relationships
- collateralized: Collateralized is a more formal, institutional term, whereas secured is used for both consumer and commercial finance.
- unsecured: Unsecured credit is backed only by the borrower's promise to pay, with no collateral.
Commonly confused with
- guaranteed: Guaranteed means a third party promises to pay if you default, whereas secured means physical assets or cash are held as collateral.
Word family
- secure (verb): To protect or obtain.
- security (noun): Collateral or protection.
Collocations
- secured card
- secured loan
- secured debt
Example sentences
- "A secured credit card requires a cash deposit as collateral, making it easier to get approved." Credit building advice
Memory hook
The lender feels 'secure' because they have your deposit or collateral in their hands. Lender is secure because of collateral.
When not to use
Do not use to describe standard credit cards that do not require a deposit (those are 'unsecured').
Fun facts
- Secured credit cards are one of the most effective tools for rebuilding credit after bankruptcy because approval is almost guaranteed.
Explore more words
collateral, default, reservation, pawnbroker, credit, creditor
Also appears in
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