Modern Secured Credit: Dynamic Funding Unlocks Growth and Financial Inclusion

Secured credit cards use deposits to guarantee credit lines, helping people with limited credit histories build or rebuild their credit while reducing issuers’ default risk. Under the traditional model, however, customers must provide both locked collateral and separate funds for repayments, effectively tying up money twice. After the Durbin Amendment to the 2010 Dodd-Frank Act capped debit card interchange fees in the United States, secured credit products also emerged as an option for banks seeking to balance revenue with financial inclusion.

PYMNTS Intelligence and Galileo Financial Technologies proposed a dynamic funding model in March 2026, and PYMNTS reported on it again on April 20. Their research found that more than 45 million people in the United States are underbanked and that subprime applicants are rejected at 2.3 times the rate of super-prime customers. Under the new model, a customer who deposits $500 and spends $100 would have only $100 locked, leaving the remaining $400 available for use.