What is the key feature that differentiates a secured credit card from an unsecured credit card?

A secured credit card is primarily distinguished by the requirement of a cash deposit that acts as collateral, making option B the key differentiator. When you open a secured credit card, you typically need to pay a sum of money upfront, which serves as your credit limit. This mitigates the risk for the lender, as they hold the cash deposit in case you default on your payments.

This feature makes secured credit cards an excellent option for individuals who are looking to build or rebuild their credit history, as they can demonstrate responsible use of credit by making timely payments. In contrast, unsecured credit cards do not require a cash deposit and are granted based on the applicant's creditworthiness and financial history.

While other options, such as having higher interest rates or the absence of a credit limit, might apply to certain credit cards, they do not specifically define secured cards, which rely on the cash deposit as a defining characteristic. Thus, the cash deposit requirement is essential to understanding how secured credit cards function and who they are designed for.