It’s no secret that having bad credit reduces your odds at a credit card approval, but with a secured credit card, everyone has a better shot at starting to establish a good credit.
A secured card is similar to an unsecured card in that it has a credit limit, incurs interest charges, and offers rewards. The key distinction is that clients must place a cash deposit to activate a secured credit card.
Cardholders can convert their secured card to an unsecured version and get their deposit returned if they use it responsibly. Similarly, the deposit will be reimbursed when a secured card is closed in good standing.
To help you find the best cards for establishing or repairing your credit, we analyzed 10 secured credit cards geared to people with no or poor credit. We looked at things including safety deposit minimums, fees, incentive programs, and APR.
Our Top Picks For Best Secured Cards
- Discover It® Secured Credit Card
- Capital One Platinum Secured Credit Card
- Navy FCU nRewards® Secured Credit Card
- OpenSky® Secured Visa® Credit Card
- Citi® Secured Mastercard®
- U.S. Bank Altitude® Go Visa® Secured Card
- Bank of America® Unlimited Cash Rewards credit card
- First Progress Platinum Prestige Mastercard® Secured Credit Card
- Petal® 1 “No Annual Fee” Visa® Credit Card
- U.S. Bank Secured Visa® Card
Discover It® Secured Credit Card
Whether you don’t have a credit history or have a terrible credit, the Discover it® Secured Credit Card is your best friend. It’s a credit builder’s dream come true, in more ways than one.
If you’re not able to graduate to a standard card within the specified time period, you’ll get your deposit refunded instead. Discover will begin reviewing your account after seven months to see whether you qualify for an upgrade. In addition to the 0% yearly cost, the card offers incentives, which are uncommon for secured credit cards. If you want to switch to a conventional credit card or end the account in good standing, you will need to put down a security deposit of at least $200.
Welcome Offer
During your first year as a cardholder, Discover it Secured Credit Card will match your cash back dollar-for-dollar, up to a maximum of $1,000.
Minimum Deposit to Activate
$200
Rewards
- Cash back of 2% on up to $1,000 every quarter in total gas station and restaurant purchases.
- Purchase on everything else will automatically earn you 1% cashback, and you may earn as much as you want!
- At the end of your first year with Cashback Match, you will get a limitless match of all the cash back you have earned.
Annual Fee
$0
Intro APR Offer
For the first six months, purchases get a 0% introductory APR, while balance transfers have a 10.99 introductory APR. Then the Standard Variable Purchase APR ranges from 13.74 percent to 23.74 percent.
Regular APR
23.74% variable
Capital One Platinum Secured Credit Card
Getting a secured credit card might be difficult if you don’t have the money to put down a security deposit, which is one of the finest ways to establish or repair your credit. The Capital One Platinum Secured Credit Card is one of people’s favorite secured cards since it makes deposits a bit less scary.
The Capital One Platinum Secured Credit Card is an excellent way to develop credit because it has no annual fee and a few features tailored to those who want to improve their credit score.
Welcome Offer
N/A
Minimum Deposit to Activate
$49-200
Rewards
None
Annual Fee
$0
Intro APR Offer
N/A
Regular APR
24.99% variable
Navy FCU nRewards® Secured Credit Card
In every way, the Navy Federal Credit Union® nRewards® Secured Credit Card is ideal. Security deposits are required, but there are no yearly fees or “account management” costs. If you’ve been making your payments on time, your account will be upgraded to unsecured status in six months.
Additional benefits, such as incentives, are also included with the nRewards® Secured Credit Card from Navy Federal Credit Union.
This card is ideal for those who are just starting out with their finances or those who are trying to repair their credit after a financial setback.
You can’t get the card unless you’re a member of Navy Federal Credit Union. Moreover, you must fulfill specific eligibility requirements in order to join this credit union.
Welcome Offer
N/A
Minimum Deposit to Activate
$200
Rewards
Secured credit cards from nRewards give you one point for every dollar spent. The term “net purchases” refers to the amount of all qualifying purchases less any returns or refunds you have made.
Annual Fee
$0
Intro APR Offer
N/A
Regular APR
18% APR (varies according to market conditions based on the US Prime Rate).
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card is unique in that it does not require a bank account or a credit check to be approved. If you want to use a secured card to build or rebuild your credit but are unable to do so due to your lack of a bank account or low credit, this is a viable choice for you.
Although the card is reasonably easy to obtain, it is otherwise unremarkable. The card has an annual charge, which is unusual for secured cards from large banks. If you have been responsible with your card for several months and want your security deposit refunded, you will have to end the account since you cannot upgrade to an unsecured card.
Welcome Offer
N/A
Minimum Deposit to Activate
$200
Rewards
None
Annual Fee
$35
Intro APR Offer
N/A
Regular APR
17.64% variable
Citi® Secured Mastercard®
Because it’s created for folks with little or limited credit, the Citi Secured Mastercard is a little different from other secured credit cards. Since it doesn’t require an annual fee and reports to all three major credit agencies, it’s an excellent option for those who qualify. If you borrow wisely and pay back your debts on time, it can help you build good credit.
Due to the long time it might take to decide if you are qualified to get your deposit refunded early, it falls short of the top secured credit cards. You have 14 days from the time you open the account to pay the $200 deposit in full, which may be a challenge.
Welcome Offer
N/A
Minimum Deposit to Activate
$200
Rewards
None
Annual Fee
$0
Intro APR Offer
N/A
Regular APR
23.24% variable
U.S. Bank Altitude® Go Visa® Secured Card
The U.S. Bank Foodie Rewards Credit Card is a no-fee option for foodies. Some consider the Bank Altitude® Go Visa Signature® Card to be the pinnacle of credit cards.
What’s for dinner on this card? Among cards with a $0 annual fee, this card has the most rewards-earning potential for restaurant expenditures. But it’s not just a one-trick pony either. Aside from petrol stations and food stores, the card also gives good earnings at approved streaming services.
Unlike other cards in its class, it does not earn additional benefits on entertainment expenditures, such as movies, concerts, and sporting events. This may be a key consideration if you frequently go out on the town. Of course, if you prefer to prepare your meals at home rather than go out to eat, you’ll save money in the long run.
Welcome Offer
When you spend $1,000 in eligible purchases in the first 90 days of your account creation, you will receive 20,000 bonus points.
Minimum Deposit to Activate
$300
Rewards
- Takeout and delivery count toward the 4 points per $1 spent on food.
- Every $1 spent at grocery shops, petrol stations, EV charging stations, and qualified streaming services earns you two points.
- All other qualifying purchases earn you one point for every one dollar spent.
Annual Fee
$0
Intro APR Offer
Purchases and debt transfers get a 0% introductory APR for the first 12 billing cycles.
Regular APR
15.74%-24.74% Variable
Bank of America® Unlimited Cash Rewards credit card
Only the $0 annual fee Bank of America® Unlimited Cash Rewards credit card offers flat-rate cash back.As a Bank of America client, you’ll get the most out of this card by using it in conjunction with other Bank of America credit cards.
If you don’t have a bank account or Merrill Lynch account with Bank of America, you’ll earn an excellent rewards rate of 1.5% on all purchases. Despite this being the industry norm, the strong 2% incentive rate given by numerous rivals is better. In addition, the 0% intro APR on balance transfers does not beat comparable credit cards as a debt-reduction tool. A longer interest-free period is available elsewhere.
You can use it to reward yourself or pay off debt, but it isn’t the ideal solution.
Welcome Offer
After making at least $1,000 in purchases in the first 90 days of your account creation, you will get a $200 cash incentive.
Minimum Deposit to Activate
$200
Rewards
You’ll earn 1.5 percent of your purchases back in cash. To qualify for a 2.62 percent cash back reward, you must earn at least 25% to 75% more cash back on each purchase.
Annual Fee
$0
Intro APR Offer
No APR for the first 15 billing cycles on purchases and no APR for the first 15 billing cycles on balance transfers for all balance transfers made during the first 60 days.
Regular APR
14.74% to 24.74% variable
First Progress Platinum Prestige Mastercard® Secured Credit Card
If you are trying to develop or repair your credit, the First Progress Platinum Prestige Secured Card is a fantastic alternative for you. It also offers one of the most affordable continuous annual percentage rates (APR) among secured cards. Applying does not necessitate running a credit check, nor does it require any sort of credit history or credit score. However, there is an annual charge associated with this card.
Applicants in most states can apply for this credit card, but not all. This card cannot be used by residents of Arkansas, Iowa, New York, or Wisconsin.
Welcome Offer
N/A
Minimum Deposit to Activate
$200
Rewards
None
Annual Fee
$49
Intro APR Offer
N/A
Regular APR
10.74% Variable
Petal® 1 “No Annual Fee” Visa® Credit Card
There are two Petal® 1 “No Annual Fee” Visa® Credit Cards in WebBank’s portfolio that can help newcomers establish credit without exclusively relying on standard FICO ratings. Both cards have no annual fee.
Other than that, the Petal 1 is an excellent beginner credit card, with the ability to report to all three main credit agencies as well as the opportunity to earn reward points. As a result, it does not demand a security deposit and it does not include the kinds of hidden costs that are common with unsecured cards for those with poor credit.
Petal’s other card, the Petal® 2 “Cash Back, No Fees” Visa® Credit Card, is intended for those who don’t have the necessary cash flow or credit history to be eligible for this version. That program has more substantial benefits, as well as a reduced APR and a bigger credit limit, making it a better option. “No fees of any kind” is a promise that Petal 2 makes, which isn’t always the case with Petal 1.
Welcome Offer
N/A
Minimum Deposit to Activate
$0
Rewards
When you use your card to make a purchase at a participating retailer, you can earn 2–10% cash back.
Annual Fee
$0
Intro APR Offer
None
Regular APR
20.74% – 30.24% variable
U.S. Bank Secured Visa® Card
For those who want to establish or repair their credit in the U.S., with no annual charge, the U.S Bank Secured Visa Card is a secured credit card. Customers must submit a minimum $300 security deposit, either online or by mail, in order to use their credit cards. Free monthly TransUnion credit score access, 0% fraud liability coverage, and fraud protection are just some of the perks of the card. The variable APR on purchases and debt transfers is 25.99 percent.
Welcome Offer
N/A
Minimum Deposit to Activate
$300
Rewards
None
Annual Fee
$0
Intro APR Offer
N/A
Regular APR
25.99% variable
Pros and Cons of a Secured Credit Card
Secured credit cards have both advantages and disadvantages, but the advantages exceed the disadvantages by a wide margin. However, not everyone is a fan of them. Secured credit cards can help you establish or repair your credit if you’re starting from scratch or if you’ve had your credit damaged.
Secured credit cards, in contrast to unsecured ones, demand a down payment. The card issuer’s risk is mitigated by this deposit, which serves as security for the purchases made on the card. The card issuer will keep the deposit if the cardholder does not pay off their debt. Alternatively, the deposit will be refunded to the cardholder when the account is closed or after a specified period of time.
In spite of these changes, secured credit cards can be used in the same manner as any other credit card. Your credit limit permits you to spend as much money as you can afford, as long as you pay it off on time and in full each month.
Pros
Using a secured credit card might help you build or restore your credit. Secured credit cards have a number of advantages.
Great credit builder
Secured credit cards transmit your account information to credit bureaus in the same way that ordinary credit cards do. This implies that if you routinely pay your bills on time, they will appear on your credit report and help you establish credit.
Easier account approval
In the event of a payment default, your card issuer is less concerned because of the collateral deposit you provide. You don’t need a perfect credit score to get approved for one of these cards because the issuers don’t care as much about it.
Reward potential
Secured credit cards can come with similar benefits to unsecured ones, such as travel insurance, credit monitoring, and cash back, although this isn’t very typical. Consider utilizing the cash back from your credit card to help pay down your monthly bill if it is available.
Deposits are fully refundable
Your deposit will be returned to you if you do not default on any payments. The most you’ll lose if you go into default is your deposit, provided you owe no more than what you put down as a down payment. Late payments on secured cards, on the other hand, might have a negative influence on your credit.
Forerunner to a non-secured credit card
A secured credit card might be a first step toward an unsecured credit card for those who have worked hard to establish or improve their credit score. Secured cards are an excellent way to diversify your credit portfolio, even if you only qualify for one for now.
Cons
If you do your homework and choose wisely, you’ll avoid many of the pitfalls of a secured credit card. However, it’s necessary to be aware of the main issues with secured credit cards.
Safety deposit is mostly required
Many secured cards need a $200 deposit, which may not be financially feasible at this time. If you’re concerned that a card will be out of your grasp because of this, look into the few that just demand a small deposit. Just keep in mind that the deposit you make has a direct relationship to the credit limit you’re given by the bank.
Fees tend to be high
Your secured card may have significant fees, just like any other credit card. Applications, processing, and renewal fees are examples of them. You should look around for a card that doesn’t impose too many additional fees.
Often has high APR
Given that secured credit card issuers expect a high default rate among customers who have poor credit, these cards often do not have low interest rates, which increases your monthly expenses. Interest rates on secured credit cards typically range between 15% and 25%, making this one of the more easily avoided drawbacks.
Usually comes with low credit limit
A limited credit limit may prevent you from making a major purchase. Low credit limits might hurt your credit score by making it more difficult to maintain your credit use. Keeping your balance below $100 will prevent your score from decreasing if you have a $300 limit.
Upgrade isn’t guaranteed
No matter how hard you work, getting an unsecured credit card is always a gamble. Your credit history may suffer if you close your account to apply for a new card, which might hinder your score from reaching the required level for an unsecured credit card.
How to Find the Best Secured Card for You
Credit Reporting
Paying your bills on time is a requirement if you want to raise your credit score, as the credit bureaus keep track of all your payments. TransUnion, Experian, and Equifax are the three main credit bureaus. It’s ideal if the card you use reports your account activity to all three, but even two reports is an improvement over none.
Having a credit card that doesn’t report to the credit agencies is a waste of time. To build your credit, you can’t get around this. The terms “no credit check” and “credit reporting” are not interchangeable when it comes to credit cards. As part of the application process, a credit card firm reviews your credit history. Following the time you receive the card, the credit reporting agency receives information about your account from the firm. A credit card that does not need a credit check should nonetheless be transmitting credit information to creditors.
Security Deposit
People with poor or no credit can use a secured credit card because of the security deposit. In order to create a credit card account, you must pay a fee to the card issuer, which keeps that money as security. As a rule, you can’t use your credit card to make purchases that exceed the amount of the security deposit. Withdrawal of your deposit is available when upgrading your account or closing it in good standing.
Deposits of $200 or $300 are required for most secured credit cards. Deposit extra money to increase your limit. To get the most out of your credit score, keep your balance under 30% of your credit limit.Staying below 10% is much better, so you may be able to get away with depositing more than the minimum. In the case of a secured credit card, the maximum deposit amount may be just as important as the minimum deposit amount. If you don’t already have a credit card deposit saved up, you may want to consider doing so.
You may be required to deposit immediately after approval, while others may offer you a bit more time to save up the money for the deposit. For this reason, it’s preferable if you have the funds on hand before you apply, in case your application status changes from authorized to refused.
Fees
There is no annual fee on many of the top secured credit cards. For the money you’re paying, you should get something in return, like a cheaper interest rate or the chance to qualify without a credit check. The secured card you pick should have an annual charge of no more than $50, as a general rule.
The yearly charge should be the only one associated with a solid secured card. Do not open an account using a credit card that charges a fee to apply or for “processing.” Every time you use your card or make a payment online, certain cards charge you an additional fee. If you want to boost your credit, don’t get one of these cards. Bad credit does not imply that you are entitled to a poor credit card.
Paying late or taking out a cash advance are two of the most common activities that lead to costs while using a credit card.
Upgrade Feature
A long-term commitment to a secured credit card is not recommended. To improve your credit, obtain a card like this first.
Secured credit cards from issuers with strong or exceptional credit are among the best. Your deposit will be refunded to you once your credit has improved sufficiently to allow you to switch to an unsecured card. It is possible to keep your current account but link a new credit card to it by upgrading. Having accounts that have been open for a long time will improve your credit score.
Some credit card issuers provide an automatic upgrade. After seven months on the Discover it® Secured Credit Card, for example, you may be eligible for an upgrade to an unsecured Discover card.It’s your responsibility to seek an upgrade with other credit card companies. Keep an eye on your credit score to see whether you qualify for an improvement. Be sure to seek assistance if you need it by calling customer support.
As a final point, certain secured credit cards are issued by companies that specialize in dealing with people with poor credit. As a result, they may not be able to provide you with a suitable update. If you want your deposit returned, you’ll either have to terminate your account or leave it open for a time and see it as an investment in your credit score with these issuers. The “No Upgrade” option does not indicate that you should never use a secured credit card from that provider. Simply accept that your upgrade will lead you in a different direction.
Grace Period
The grace period is common on most credit cards, although certain credit cards for those with poor credit do not. Check to see if yours does as well.
A grace period is, as the name suggests, a period of time during which a party has the opportunity to make a decision.
If you carry a debt on your credit card from month to month, you’ll be charged interest on all transactions as soon as they appear on your statement if you don’t pay the entire amount due. After your next statement’s due date, no interest will be charged on future purchases if you pay off the balance of your previous bill in full. The grace period is the interest-free time.
You shouldn’t have to pay any interest if you pay your credit card bill in full each month, and you should also pay it on time each month. Because of the high interest rates associated with secured credit cards, it’s critical to include a grace period in the terms of the agreement.
Application Requirements
Secured credit cards may appear to ensure acceptance on the surface. After all, you’re often protecting the full credit limit with cash that the card issuer may retain if you default.
However, if your income or credit history does not satisfy the standards of the card issuer, your application may be denied. A Capital One account that is past due won’t allow you to apply for a new one.
Furthermore, if your credit record shows a bankruptcy that hasn’t been dismissed, you’re unlikely to be approved for any type of credit card. Some card issuers may even provide a grace period following the date of discharge.
Look into the pre-approval processes offered by several card issuers to get an idea of your chances of being approved before making a final decision. Also, be sure to read the small print or call the card issuer to find out if there are any potential disqualifiers.
Since no credit check is necessary to apply for the OpenSky® Secured Visa® Credit Card, it may be an excellent option if your credit is in bad shape.
Card benefits
The ultimate purpose of a secured credit card is to develop or rebuild your credit, but it doesn’t hurt if the card you’re using gives incentives and bonuses as you go along.
The Capital One Quicksilver Secured Cash Rewards Credit Cards offer up to 1.5 percent cash back, which is competitive with some of the best cash back credit cards available.Additionally, there is no annual charge for this card, and you may receive your deposit back if you want to without having to close the account.
Discover it Secured, on the other hand, gives 1% cash back on all other transactions and 2% cash back on up to $1,000 spent quarterly at petrol stations and restaurants in combination. Additionally, on the anniversary of your account, Discover will match 100% of the cash back you earned in your first year. There is no yearly fee associated with this card.
This time around, it’s possible to be sidetracked by the gimmickry of incentives, but if you’re disciplined enough, it might seem like frosting on the cake.
Final Thoughts
Avoid accepting the first secured credit card offer you encounter if you’re wanting to develop or rebuild your credit history. As a result, instead of rushing into a decision, spend some time researching and comparing your possibilities.
Secured credit cards aren’t for life, but a good one may make your life simpler and even provide value as you strive to establish your credit.
Frequently Asked Questions on Secured Cards
Do you need income for a secured credit card?
Even if your income is limited, you may be able to obtain credit through the use of a secured card. A refundable security deposit is required to obtain a secured credit card account. If you are unable to make your monthly payments, the deposit will be returned to the credit card company.
Can I be denied for a secured card?
A current or recently discharged foreclosure, collections, or repossessions on your credit report are all examples of things that could result in a secured card denial.If you don’t fulfill the issuer’s minimal standards for approval, you might be refused.
What do I need to open a secured credit card?
A non-P.O. Box U.S. address and a valid Social Security number, ITIN, or passport are required. A deposit is normally required for a secured credit card application, and the deposit amount becomes your credit limit.
How much will a secured credit card raise my score?
Within a year, your credit score might rise by 200 points if you carefully handle your secured credit card. Opening 3 secured credit accounts and a credit building loan may raise your credit score from the 500s to the 700s in as little as a year if you have weak credit.
Can I add more money to my secured credit card?
Under some circumstances, a secured credit card might raise your credit limit. Your security deposit can be increased up to a maximum of $25,000 in specific instances. You may also be eligible for an increase in your credit limit if you make timely payments for a long period of time.
How quickly will a secured card build credit?
Once you start using your secured credit card, it might take anywhere from one to two months for it to have an impact on your credit score. If you’re just beginning to develop credit, it might take up to 6 months for your credit score to appear on your record.
Do you get your money back when you close a secured credit card?
Security deposits are usually repaid when your credit card account is canceled or changed to an unsecured one after the account amount has been paid in full. The issuer’s regulations on when you can receive your deposit refunded are detailed in the card’s terms and conditions.
