Cashback cards save more dollars for shoppers who pay the full bill every month. Savings-secured cards save very little in deposit interest, but they help start or rebuild credit. A savings-secured card is a secured credit card backed by a refundable cash deposit that sets the credit line. According to the Consumer Financial Protection Bureau, a user might put in $500, spend up to that amount, and paying the bill restores the spending amount (how to start or rebuild credit).
Table of Contents
- How does each card save money?
- How much does deposit interest pay?
- Can a secured card also earn cash back?
- When does interest erase the savings?
How does each card save money?
A savings-secured card saves through interest paid on the deposit, when the issuer pays it. Commerce Bank says its Secured Visa holds a minimum $400 deposit in an FDIC-insured Secured Savings account that earns interest, with the deposit equal to the credit line (Commerce Bank Secured Visa terms).
A cashback card saves through a rebate on spending. Citi says its Double Cash card pays unlimited 2 percent back on every purchase, 1 percent when buying plus 1 percent when paying, redeemable as statement credit, direct deposit, or check.
How much does deposit interest pay?
Very little at average rates. The FDIC reported a 0.38 percent national-average savings rate in October 2026, so a $400 deposit earns about $1.52 per year (FDIC national rates).
That is far less than 2 percent back on regular spending. A household spending $500 per month would earn about $120 per year at 2 percent, compared with a few dollars of deposit interest.
Can a secured card also earn cash back?
Sometimes, but the main job stays credit-building. Discover says its it Secured card holds the deposit as collateral and applies no interest to the deposit, so not every secured deposit earns savings interest.
The same Discover card still earns 5 percent back in activated quarterly categories up to the quarterly maximum plus 1 percent on other purchases, with a first-year dollar-for-dollar match. That combination can help a new cardholder, but the credit line and rewards are usually smaller than on a standard cashback card.
- Choose savings-secured if you need to establish a score or qualify with limited history.
- Choose cashback if you already qualify and pay in full each month.
- Ask whether your secured deposit earns interest before counting it as savings.
When does interest erase the savings?
Carrying a balance erases cashback fast. Federal Reserve data reported by Motley Fool Research put average card APR at 21.19 percent across all accounts and 22.36 percent on accounts assessed interest in August 2026 (average credit card rate research).
That cost is far larger than 1 to 2 percent back. Pay the statement balance in full, keep spending inside your budget, and move to a stronger cashback card after your credit improves.
