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Author: Robin Saks Frankel, @robinsaks | Last Updated: September 7, 2018
Here at Bankrate, we’re pretty serious about finding the best credit card for you. Bankrate experts have studied 228 secured credit cards to try and identify the best deal. Each card has been awarded a Bankrate score out of 100.
If you need a secured credit card, you’re probably focused on establishing or re-establishing credit. Our experts know that and have made sure to pay extra attention to this aspect of a secured credit card. Bankrate’s proprietary scoring method takes lots of factors into account when analyzing a card — the opportunity to build credit, the cards annual fees, security deposit, APR rates, introductory bonuses, balance transfers, hidden fees, rewards value, travel perks, and any extras and discounts. For secured cards we focused on the following factors:
This is one of the only no-fee secured cards that offer rewards, which are competitive with some unsecured credit cards.
This is one of the only secured cards with a deposit requirement that could be lower than your limit.
If you have the kind of credit score that would make a banker blush, the OpenSky Secured Visa Credit Card might be your savior. To apply for this card, you don’t need any credit history and there’s no credit check either.
If you’re looking for a secured card with an ultra-low APR, the First Progress Platinum Prestige Mastercard Secured Credit Card fits the bill. With an APR 10.24% variable, this rate bests even that of most unsecured cards.
There are two notable attributes of the Green Dot primor Visa Classic Secured Credit Card: the card has a low fixed APR of 13.99 percent and your security deposit om the card will remain in an interest-bearing account. That may make this card a winner for some.
One of the things we like best at Bankrate about USAA credit cards is that they all offer ultra-low APRs and other benefits to those serving active duty. The standard APR for those who qualify for this credit union secured card is a variable 11.65% to 21.65%. The low end of this range is pretty good even for an unsecured card. But, deployed military personnel qualify for an APR of just 4% for debt incurred prior to deployment.
A secured card functions similarly to a prepaid debit card. In most cases, the amount you put down as a security deposit on a secured card is equal to the amount of credit you’re granted. With a prepaid debit card, the amount of value on the card is equivalent to the amount you deposit. There are a few key differences though between the two types.
Unlike a prepaid debit card which just stores the value of the money you’ve put on the card, a secured card functions like a credit card in that you don’t have to pay the entire balance at the time of purchase.
For example, with a prepaid debit card, if you have $500 on the card, and you make a $250 purchase, you have $250 left to spend on the card. After that, there’s no money left on the card unless you add more funds. With a secured card, if you have a $500 credit limit because you made a $500 security deposit, you can spend $250 on an item, but you don’t have to pay it immediately at the time of purchase. Just like with an unsecured credit card, you can pay back a portion of that $250 charge each month until it’s paid off but you will also accrue interest for each month you carry a balance.
It’s important to know that if you have poor credit due to prior financial missteps, carrying a balance on your secured card is only likely to further hurt your score, as the APRs on many secured cards are high. The best reason to own a secured card is because you want to show good payment habits and behaviors to the credit reporting agencies so you can improve your financial standing.
The main reason to own a secured card is to help repair or build your credit if you don’t qualify for an unsecured card—which is a typical credit card that allows you to charge up to a predetermined limit without depositing any money first as security. Secured cards, like unsecured cards, will charge you interest if you don’t pay your balance in full and on time every month. Because these cards are designed for those with little to no credit, the APRs on a secured card generally are higher than those of unsecured cards.
A secured card could be a good fit if:
Even if a secured card may initially seem like a good fit for you, it’s important to know if the card reports to at least one of the credit reporting agencies. Without reports of good payment behavior to the credit bureaus, your credit standing won’t improve.
Maintain good payment habits, and eventually, you’ll be able to switch to an unsecured card. It’s a good idea to choose a secured card that will allow you to “graduate” to an unsecured card after a period of time. This means the issuer will let you switch your card to another one within their portfolio that doesn’t require a security deposit. This can be a big deal as it allows you to avoid two things that can ding your credit—applying for a new line of credit and closing a card you’ll no longer use.
|Card Name||Bankrate Score||Annual Fee||Best For|
|Discover it® Secured||95/100||$0||Overall Best|
|Capital One® Secured Mastercard®||84/100||$0||No Annual Fee|
|OpenSky® Secured Visa® Credit Card||68/100||$35||No Credit Check Required|
|First Progress Platinum Prestige Mastercard® Secured Credit Card||65/100||$49||No Minimum Credit Requirement|
|Green Dot primor® Visa® Classic Secured Credit Card||71/100||$39||fixed APR|
|USAA® Secured Card American Express®Card||85/100||$35||Military Families|
* See the online application for details about terms and conditions for these offers. Every reasonable effort has been made to maintain accurate information. However all credit card information is presented without warranty. After you click on the offer you desire you will be directed to the credit card issuer's web site where you can review the terms and conditions for your selected offer.