What's the difference between a secured credit card and a traditional credit card?

A secured credit card and a traditional credit card function similarly. With both card types, you have a credit limit - meaning you can spend up to that limit.

When you use your card, you will owe the amount you spend to the financial institution. You can pay this balance in full at the end of the billing cycle, in which case you won't be charged interest; or you can pay a portion no lower than your minimum payment (this will fluctuate depending on how much of your limit you've spent), incurring interest charges on the remaining balance. The balance owed at the end of the month, your credit limit, and any late payments are all reported to credit bureaus. 

The difference between secured credit cards and traditional credit cards comes down to how your credit card limit is funded.

With a traditional credit card, your limit is a loan from the financial institution. In order to close the credit card, you must have no balance.

With a secured credit card, the credit limit is funded by a refundable cash deposit you make upfront. If you want a $500 credit limit, you'll deposit $500 with the financial institution and they'll place a hold on that $500 securing your credit limit. If you close the credit card, you will be refunded your deposit less any balance you owe on the card.

Secured credit cards are a great option to build or re-build credit.