That's not a credit card. The credit limit is equal to the deposit you make.

They're called secured cards, and they're very common. My first card was secured, it's a way to get access to a functional credit card (purchase protection, credit reporting, etc) with bad or non-existing credit.

I didn't downvote you but fyi: https://en.wikipedia.org/wiki/Credit_card#Secured_credit_car...

The 2nd to last paragraph in that section starts with: "Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available."

My first credit card was a secured VISA card and it had a high interest APR of 21%. The high interest rate was irrelevant to me. What was most important was that I had a credit card at all. When I got the card, I remembered the first thing I did was order music CDs from the web. This level of convenience wasn't possible by mailing in money orders. Since I paid off the full balance every month, whatever high interest rate the card had didn't affect me.

I don't know the answer, but I'm going to guess that it's because they want to build or rebuild their credit, and would not be eligible for credit cards otherwise, even at a rate of 28% with unsecured credit. For example, maybe they have recently become bankrupt, or their credit score is really bad, or they have no credit history, so the only way they can get a credit card is with a secured card. This would allow them to build positive credit history in a way that paying with cash or a debit card would not.

In the UK: https://www.moneysupermarket.com/credit-cards/guide-to-credi...

Then why is there an APR. Does it eventually go from pre-paid to credit? Nothing about this makes sense.

It's not prepaid, its secured.

It's exactly like requiring a security deposit on an apartment. You still have to pay rent every month, but the landlord holds onto some money in case you stop paying rent. In this case the lender holds onto some money in case you stop making payments.

You still have bills, you still must make payments on time, you still have the option of only making minimum payments and carrying a balance. The collateral you deposit is only returned when you close the account or the account is upgraded to a non-secured card.

It's not prepaid, it's a deposit. It usually gets refunded after you've gone some amount of time without missing a payment.