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Bankrate’s guide to the best secured credit cards
A secured credit card is a type of card backed by collateral, usually in the form of a deposit from the cardholder. The typical consumer who gets a secured card has no credit history or a low credit score, but the deposit makes a secured card easier to qualify for. You might have an opportunity to upgrade to an unsecured card with no deposit if you use the secured card responsibly.
As an alternative to paying a security deposit, some products give you access to a secured credit card after you establish your creditworthiness through a credit-building account that involves gradually paying off a small installment loan.
A secured credit card can be more than just a convenient way to make your everyday purchases. It can also give you an opportunity to establish or rebuild credit. Whether you need to build your credit history or get back on track financially, responsible use of a secured credit card could provide a starting point.
Check out the expert advice and recommendations on this page to get the information you need to know.
In this guide:
Compare our top picks for secured credit cards
|Secured Mastercard® from Capital One
||3.0 / 5
(Read full card review)
|OpenSky® Secured Visa® Credit Card
||No minimum credit score requirement
||3.2 / 5
(Read full card review)
|Discover it® Secured Credit Card
||Secured card with rewards
||4.0 / 5
(Read full card review)
|Citi® Secured Mastercard®
||No monthly maintenance fee
||3.0 / 5
(Read full card review)
|First Progress Platinum Prestige Mastercard® Secured Credit Card
||No required credit check
||2.6 / 5
(Read full card review)
|First Progress Platinum Elite Mastercard® Secured Credit Card
||Best for easy application and processing
||3.0 / 5
(Read full card review)
|Self – Credit Builder Account + Secured Visa Credit Card
||Best for building credit with savings
||One Time $9 + Secured Card $25
||3.0 / 5
(Read full card review)
A closer look at our best secured credit cards for 2021
Secured Mastercard® from Capital One
Best secured card for building credit
- This card is best for: Credit newcomers or those looking to rebuild their credit. The card allows for low credit scores and you can start with a security deposit as low as $49, an easy route to an opportunity to build credit.
- This card is not a great choice for: Cardholders who will likely carry a month-to-month balance. Carrying a balance is never ideal, but this card is a little extra costly with a 26.99% variable APR.
- What makes this card unique? With this card, you can start with a refundable security deposit of either $49, $99 or $200, but your initial credit limit will be at least $200. After demonstrating responsible habits, Capital One may automatically increase your credit limit in as little as six months.
- Is the Secured Mastercard from Capital One worth it? This minimal-fee card will report your payment history to the three major credit bureaus, offering an easy boost to your credit score as long as you pay on time. The credit-building perks and affordable deposit make it a great option for those looking to improve their credit.
Read our full Secured Mastercard from Capital One review.
OpenSky® Secured Visa® Credit Card
Best secured card for no minimum credit score requirement
- This card is best for: Someone with no credit history or a low credit score. With the OpenSky Secured Visa, there’s no minimum score to be approved, no credit check and perks that’ll help you grow your credit score.
- This card is not a great choice for: Anyone looking to avoid an annual fee on top of their initial deposit. Also, there’s no rewards opportunities here.
- What makes this card unique? This card doesn’t even require you to have a checking account to open the card, furthering the lenient approval process. And to start your credit-building journey right, this card allows you access to credit tips and a dedicated credit education page on their website.
- Is the OpenSky Secured Visa Credit Card worth it? This card comes with credit-building features, a low APR (17.39% variable) and has extremely lenient approval conditions . Although the $35 annual fee may be an obstacle, this card could clear a path for seemingly unsaveable scores to arrive at good credit.
Read our full OpenSky® Secured Visa® Credit Card review.
Discover it® Secured Credit Card
Best secured card with rewards
- This card is a good fit for: Someone looking to earn significant cash back rewards as they work to build their credit score. You can get 2 percent cash back at gas stations and restaurants (up to $1,000 per quarter in purchases) and 1 percent on all other purchases.
- This card is not a great choice for: Anyone looking to start with a minimal deposit. The minimum deposit required to initiate this card is $200, which is reasonable, but not the lowest available.
- What makes this card unique? The cash back rewards opportunity provided by this card is pretty much unheard of in a tier of credit cards designed for low credit scores. The best part: Discover will match all of the cash back you’ve earned at the end of your first year.
- Is the Discover it Secured Credit Card worth it? There’s no annual fee, generous rewards, and several credit-building features, making this a clear frontrunner in the world of secured credit cards.
Read our full Discover it® Secured Credit Card review.
Citi® Secured Mastercard®
Best secured card for no monthly maintenance fee
- This card is a good fit for: Cardholders who want a high credit limit while avoiding fees. This option has no annual fee, no monthly maintenance fees, and you can get a credit limit as high as $2,500 depending on your credit, income and other financial factors.
- This card is not a great choice for: Rewards seekers and anyone set on earning a sign-up bonus or welcome offer. Also, it should be noted that you’re ineligible if you have prior bankruptcy in the past two years.
- What makes this card unique? You’ll get access to the Citi Entertainment program, where you can find concerts, events and other fun-filled opportunities.
- Is the Citi Secured Mastercard worth it? You can avoid pesky fees while having your credit habits reported to the three credit bureaus. Although this can be a worthwhile option to grow your credit score with, some of the other cards here may carry more additional benefits.
Read our full Citi Secured Mastercard review.
First Progress Platinum Prestige Mastercard® Secured Credit Card
Best secured card for no required credit check
- This card is a good fit for: Those with no credit history or a low credit score. This card doesn’t require a credit check, making it a viable option even if you have an unsavory financial history.
- This card is not a great choice for: Anyone looking to avoid annual fees — this card’s is $49.
- What makes this card unique? The 9.99% variable APR is lower than most cards, making it a great choice if you know you’ll have to carry a balance. Also, with this card’s lack of a credit check, you’ll avoid a hard credit inquiry.
- Is the First Progress Platinum Prestige Mastercard Secured Credit Card worth it? With a $49 annual fee and a top feature that best helps those who expect to carry a balance, this card is only worth it for very particular consumers. If your expectation is to pay off your balance in full as you try to grow your credit score (as you should), there are better choices.
Read our full First Progress Platinum Prestige Mastercard Secured Credit Card review.
First Progress Platinum Elite Mastercard® Secured Credit Card
Best secured card for easy application and processing
- This card is a good fit for: Those who want the process of getting a credit card to be as pain-free and quick as possible. With an entirely-online application, this card has some of the easiest application procedures.
- This card is not a great choice for: People looking to earn rewards or avoid an annual fee with their secured card. This card has no rewards and features a $29 fee each year.
- What makes this card unique? First Progress reports all of its credit data to all three major credit bureaus — Equifax, Experian and TransUnion. That way, you know you’re giving yourself the best shot at speedy credit growth.
- Is the First Progress Platinum Elite Mastercard Secured Credit Card worth it? With generous acceptance and credit-building features that can help you climb to a healthy credit score, this card is a fine choice — but do consider the $29 annual fee before the fast application.
Read our full First Progress Platinum Elite Mastercard Secured Credit Card review.
Self – Credit Builder Account + Secured Visa® Credit Card
Why it’s the best secured card for building credit with savings
- This card is a good fit for: Someone with the goal of building up savings while establishing their credit history.
- This card is not a great choice for: Those who want a traditional credit card account. With this option, you open a Credit Builder Account and won’t actually receive a credit card until you’ve saved $100 and made three on-time monthly payments in a row.
- What makes this card unique? The savings account and credit card combination is a rarity in the first place, and even more so because you can begin building your credit score before ever obtaining a card. Plus, you can take advantage of credit utilization monitoring and your habits will be reported to the three major credit bureaus.
- Is the Self – Credit Builder Account + Secured Visa Credit Card worth it? For those with the time and patience to wait for a credit card, this is a unique and valuable opportunity. Opening two lines of credit (the credit builder account, which is a loan, and a credit card) without a hard inquiry is a nice addition to your credit file, and you can further boost your score with on-time payments.
Read our Self – Credit Builder Account + Secured Visa Credit Card review.
What are secured credit cards?
Most credit cards are unsecured, meaning that they don’t require you to put up any kind of collateral. When you get a secured credit card, you pay a security deposit that typically serves as both collateral and as your credit limit.
Why do you have to pay a deposit on a secured credit card? The deposit is kind of a tradeoff. You have to put money down, but it makes secured cards accessible for those with limited credit history or bad credit. Keep in mind that using a secured credit card responsibly could lead to:
If you practice good habits, you might be able to rely on good credit instead of collateral when you apply for your next card.
Who should get a secured credit card?
Getting a secured card can be an excellent path to take on the journey to a good credit score. Their relaxed application requirements make them a great fit for many types of people looking to build or repair their credit:
New credit users with no credit history
While the majority of credit cards don’t accept cardholders with no credit history, most secured cards will accept true credit beginners. By opening a secured credit card account, you have a chance to establish a history of responsible spending and timely payments. Sound credit habits make it easier to eventually enjoy the benefits that come with a good credit score.
Credit users with limited credit history
If you’ve opened a line of credit previously but haven’t had success in improving your score, a secured credit card could help. Credit cards in general can provide a useful way to build a credit score when they’re used responsibly. Plus, secured cards often come with free access to your credit score online, report your payment activity to major credit bureaus and feature other credit-building perks.
Someone with a bad credit score (below 579)
Anyone who has had to deal with debt, bankruptcy or anything else that undermines a credit score could take advantage of a secured credit card. Some secured cards don’t require a credit check or a minimum score to apply, making them among the most accessible options available.
How to maintain your secured credit card account
As with all credit cards, making timely payments is such an important part of using a secured card. There are major downsides to missing payments and it’s tough to catch up once you fall behind, so it’s essential to get into the habit of making sufficient payments on time. Here are some guidelines:
- Many secured cards offer features designed to help you keep a regular payment schedule, such as auto-pay settings and automated reminders. Put these features to work for you so that you don’t have to shoulder the entire load.
- Secured cards, like unsecured cards, charge interest if you don’t pay your balance in full and on time every month. Carrying a balance on your secured card could lead to costly interest charges, since the APR (annual percentage rate) on many secured cards is higher than the average rate.
- Late payments will also damage your credit score. Payment history accounts for 35 percent of your credit score, while credit utilization (how much of your available credit you’re currently using) makes up 30 percent. These heavily weighted factors make it extremely important to pay your credit card bill on time and in full.
Pros and cons of secured credit cards
Almost any product, including a credit card, can have advantages and disadvantages. Here’s a list of potential benefits and potential drawbacks of a secured credit card.
- A secured card lets you have a credit card for the times when a merchant doesn’t accept cash, like for a hotel reservation or a rental car.
- With regular on-time payments, you can improve your credit score.
- Because you can typically spend only up to the amount of your security deposit, a secured card can help keep your spending in check.
- Some secured cards may charge fees for opening the account, which can reduce the amount of available credit you have left to use.
- If you have a secured card that won’t let you eventually graduate to an unsecured card, you could be stuck with a card you no longer need when your credit improves.
- Many secured cards charge higher than average APR, which can be expensive if you don’t pay your credit card bill on time and in full.
How quickly can you build credit with a secured card?
If you’re shopping for a secured card, think of your credit as a house. You might need to build one from the ground up, or you might already have one that’s in need of some renovations. Either way, the job requires tools, planning and time.
Spending wisely with your secured card and making timely payments will reflect well on your overall credit, but the turnaround won’t happen overnight. Fortunately, you do have some options for addressing credit problems in a relatively short period of time, including:
Correct any errors on your credit report
Inaccurate information in your credit history can make you a less attractive customer in the eyes of lenders. Make sure that the information on your credit report, a long-term record of how you’ve used credit from the past to the present, is accurate and up-to-date.
Contact AnnualCreditReport.com to request a free copy of your credit report from the major credit bureaus: Equifax, Experian and TransUnion.
Getting ahold of your credit report is only half the battle — you also need to know how to interpret it. Check out our guide to reading your credit report
to make sure you’re not missing any errors.
Try a more suitable credit-scoring model
If you have a limited credit history, a so-called “traditional” credit score might not tell the whole story. Newer credit score products put added emphasis on good credit habits such as timely payments on your utility and cell phone bills and positive bank account balances.
Ultra FICO, Experian Boost or similar options could benefit someone who’s handled their finances responsibly but doesn’t have experience with credit cards or loans.
Limit your new credit applications
New credit applications that involve hard inquiries (also called hard pulls) temporarily lower your credit score. Be careful about applying for multiple credit accounts in a short period of time. Whenever possible, look for pre-qualified offers or applications that don’t require a credit check.
Upgrading to an unsecured card
After using your secured card responsibly for a while, your credit score should start to rise. The progress happens most quickly if you keep your balances low and make your payments on time. Once you’ve achieved a good credit score (FICO or VantageScore of 670 or greater), you can think about shopping around for an unsecured card that might offer better rewards programs and lower fees.
When it comes to going about your upgrade, you have a few options. Some credit cards have both a secured and unsecured version. If that’s the case with your secured card, you may be able to simply call the customer service line and ask to upgrade for free. Some issuers may even allow you to upgrade to a variety of unsecured cards while keeping the same account. Keep in mind that you may not be eligible for the new card’s sign-up bonus if you’re upgrading from a secured card.
The other option is to apply for an additional card instead of upgrading your existing account. With cards for fair credit and beyond, you have more options to explore credit cards from other issuers this way. However, your credit may take a temporary dip since the new account will decrease your average age of accounts.
Once approved for a new card, you can either keep your secured card open or cancel it. If your secured card comes with fees, such as a maintenance or inactivity fee, it may be a good idea to cancel it. Otherwise, there’s no harm in keeping it open for the occasional small purchase to add to the length of your credit history (15 percent of your credit score).
Secured credit card providers have different time requirements for graduating to an unsecured card
. In any case, you can contact your issuer and request to upgrade your card after you’ve demonstrated good habits. Set the trend for at least 6 months before reaching out for a better card.
Things to consider before you apply for a secured card
- Your application will require some basic details, including your name and Social Security Number. Have your information ready.
- Check your credit score. You can check your credit score for free online, and knowing where you stand is essential before you get started. Also, errors aren’t unheard of on credit reports, so it’s worthwhile to make sure there hasn’t been a mistake.
- Look for prequalified offers. Many cards and issuers will let you know ahead of time (with near-certainty) whether you’d be approved, so you don’t have to go through the full process or take a hit to your credit. The CardMatch™ feature is an easy way to find a selection of cards you may be prequalified for.
- Make sure you have enough money for the deposit. It could be as low as $49 or as high as a few thousand dollars, depending on the card and the issuer.
- Some cards require you to have a bank account to pay for the deposit, while others allow payment by check or money order.
- Look for a secured card that reports to at least one of the major credit bureaus, such as Equifax, Experian or TransUnion. Reports of good payment behavior to the credit bureaus are essential for building or repairing credit.
Alternatives to secured credit cards
Applying for a secured card is a simple and effective way to build up less-than-ideal credit. However, there are other avenues if you decide against it.
Become an authorized user
One way to dip a toe into credit building is to become an authorized user on a parent’s or spouse’s card. For young adults, this can be a good way to establish credit without the pressure of choosing a credit card. Once you’ve built up your credit, you’ll be more likely to be approved for the best credit cards.
Becoming an authorized user may be a good choice for parents who want to monitor their child’s purchases. However, those pursuing this option should trust their authorized user not to overspend; with most issuers, authorized users typically have as much spending power as the primary cardholder. American Express is one exception that allows cardholders to set spending limits for your authorized users.
Get a cosigner for an unsecured credit card
Some credit card issuers will allow you to apply with a cosigner — ideally someone who has good credit and trusts you to use your card responsibly. Though you are the primary cardholder in this situation, the cosigner is liable for all of your debts.
Like being an authorized user, having a cosigner could give you access to unsecured credit cards that you wouldn’t qualify for with your credit alone. But some issuers do not allow cosigning. If you don’t see the option on the application, you can call the customer service line to ask.
How we chose our list of best secured credit cards
Every card that Bankrate reviews is evaluated on a 5-star scoring system. If you need a secured credit card, you’re probably focused on establishing or re-establishing credit. Making our choices for cards this category involves putting special attention on factors such as:
A lot of secured credit cards will charge cardholders an annual fee. Our analysis takes into account the overall value offered by the card, through rewards and other perks, against the annual fee to help you find the most value.
Secured cards can sometimes have extra fees that you may not see on other credit cards. We pay close attention to the fine print so we can factor these fees into the overall scores and make sure you’re aware of them beforehand.
Some secured cards offer rewards programs, such as cash back. Rewards can be complicated, but we make it simple with a breakdown that clearly shows the real value they offer to cardholders.
Extras and perks
Some cards have extra advantages for cardholders. Introductory offers and credit monitoring are examples of benefits that add to a card’s overall value.
More information about secured credit cards and building credit
If you’re interested in secured credit cards, check out these Bankrate resources for more essential information:
Have more questions for our credit cards editors? Feel free to send us an email, find us on Facebook, or Tweet us @Bankrate.