I agree... why is this a top story on HN? Am I missing anything or is this just:
"Amazon offers a credit card w/ no annual fee... like almost every other company"
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.
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.
It feels more like an ad than news.