[DarkStar851]

Sure it's required and they should have to comply, but this is a secured LoC, so there's no interest to gather in the first place. Unless I'm grossly misunderstanding this? That's a stupid high APR, but you should effectively have a bill of $0.

[astura]

Secured cards work exactly like non-secured cards, the only difference is the bank holds onto collateral, usually equal to your credit line. You still have a bill to pay, minimum payment, due date, you can pay the minimum and carry a balance, rack up late fees, etc.

The collateral is only returned to you when you close your account or upgrade it to a non-secured card. You don't use the collateral for the monthly bills, just like if you rent an apartment you don't use the security deposit to pay the monthly rent.

[asavadatti]

Does the bank pay interest on the collateral? I'm assuming not

[yrxuthst]

Depends on the issuer. In this case they do not - see https://www.synchronybankterms.com/gecrbterms/pdf/Amazon.com..., section V

[aeternus]

It really is the greatest business plan ever though. They figured out how to loan money at 28% APR without actually having to loan out any money.

Very impressive.

[dwild]

They also make the credit card fee from the merchant!

[munificent]

This has to be the moment capitalism finally jumped the shark:

1. You give a business some of your money.

2. Business gives you some of it back.

3. Business charges you insanely high interest on the amount they gave you back, until you return your money back to them.

4. Profit. So much profit.

[prostoalex]

Secured credit cards have been around for quite a bit, but they're far from profit centers, which is why they're hard to get from major large banks and rarely advertised.

The only reason someone would apply for one is to build credit, and missing the grace period while subjecting oneself to high APR is pretty much the worst thing one can do at that point. It's worse than not getting the card at all.