Best secured credit cards for September 2023

There are a number of cards available for people with a limited credit history and even people with no credit history. However, getting approved for unsecured credit cards can be difficult. If you don’t prequalify or fail to get approved for an unsecured credit card, a secured card is an accessible option that can help you build credit and give you time to show off your responsible credit habits. 

Learn more: How to get a credit card with no credit history

If you have bad credit (a FICO score of 580 or lower), you likely have a few negative marks on your credit report. Factors that hurt your score include carrying too much debt, making late payments, defaulting on a loan or filing for bankruptcy. Some secured cards don’t require a credit check or a minimum score to apply. These cards could be your best or even only option as you work to rebuild your credit and wait for some of those negative marks to fall off your credit report.

If you’re new to the fair credit tier (a FICO score of 580 to 669), your credit score may not be high enough yet to qualify for the best credit cards in this credit range. There also aren’t a lot of unsecured credit cards for fair credit with low interest rates. If you tend to carry a balance or just need more time to grow your credit score, a secured card can help. Some cards, like the OpenSky card and Merrick Bank Secured Credit Card have competitive interest rates that are lower than many credit cards — even those for good or excellent credit.

Another type of loan that might help with improving credit history is a credit-builder loan. If a lender approves your credit-builder loan application, it will hold funds in a savings account that earns interest. You then pay off the loan in fixed monthly payments, which the lender reports to the credit bureaus, allowing you to build a positive payment history. Since 35 percent of your FICO score is payment history, making on-time monthly payments could boost your credit score.

Once the loan is paid off, you get access to the funds in your credit-builder account, which you can then save or spend as you choose.

While unsecured credit cards for people with bad credit don't require a security deposit, they typically come with high fees, interest rates, penalties and low credit limits.

For example, the Credit One Bank® Platinum Visa® for Rebuilding Credit* has a high APR and annual fee that increases in the second year ($75 for the first year, then $99 annually, billed at $8.25 per month). 

If you’re working on positive spending habits and building credit, a lower-cost secured card that has a pathway to graduation might be a better option.

*Information about Credit One Bank® Platinum Visa® for Rebuilding Credit has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

A credit-building card’s cost has a large influence on its overall score and our decision to include it in our best cards list. This is because cards in this category tend to be much pricier than traditional credit cards designed for people with a good or better credit score. 

We compare a card’s total cost, including any annual fees, account activation fees, monthly fees and more against the total cost of other cards in the credit-building category and assign each card a score based on its affordability. We also factor rewards-earning potential into our assessment of a credit-building card’s total cost, subtracting expected earnings from the sum of its fees. 

To get a sense of a credit-building card’s rewards-earning potential, we estimate its average annual rewards rate and average annual earnings based on the most popular spending categories (as covered in the latest Bureau of Labor Statistics consumer spending report). 

However, we use a slightly lower spending assumption ($300 per month or $3,600 per year) to estimate average earnings, assuming credit-builders will start out with a lower credit limit, will want to keep credit utilization low and will focus primarily on small purchases they can easily pay off.

While low-cost credit-building cards will always be at a major advantage in our scoring system and will likely earn a higher spot on our best cards list, no-annual-fee credit-building cards can be hard to come by, especially if you’re looking for an unsecured card. With this in mind, we may include unsecured cards with high fees in our list if they offer other benefits for credit-builders, like a high starting credit limit or useful perks.

A card’s APR is also a major factor in its credit-building score. Each card’s average APR is compared against the average APR of other cards in the category, and the cards with lower-than-average APRs receive a higher rating. 

Given the many costs students face — from textbooks to laptops — the presence of an introductory APR on purchases or balance transfers also plays a role in a student card’s score and its inclusion on our list. 

Though high APRs are hard to avoid when you’re just starting out or working on your score, credit-builders and students should strive for as low an APR as possible since they’re likely to either be new to managing cards or trying to establish better financial habits and avoid falling into debt.

Along with a credit-building card’s cost, we consider how easy the card makes it to build credit. To asses this, we evaluate its credit limit potential and minimum deposit requirement.

Unsecured cards with a high starting credit limit and secured cards that let you put down a large deposit and get a matching high credit limit will score the highest according to our “Ease of building credit” rubric and are more likely to appear on our list. 

This is because a high credit limit can make it much easier to keep your credit utilization low, a primary credit-building factor that makes up 30 percent of your FICO credit score. 

Secured cards have a slight advantage in this category since the maximum credit limit on a secured card tends to be much higher than the typical starting credit limit on an unsecured card. However, unsecured cards have the upper hand in another key aspect of building credit: accessibility. 

Cards that carry no or a low deposit requirement can also receive a high score according to our “Ease of building credit” rubric since these cards offer a lower barrier to entry than secured cards that require you to put up hundreds of dollars in an upfront deposit. 

Indeed, some users may prefer to pay a non-refundable $50 annual fee while they work on their credit score than tie up hundreds in a refundable security deposit.

We evaluate a student or credit-building card’s benefits based on how useful they are for someone looking to build a positive credit history or save money on everyday spending. 

We consider the inclusion of a rewards program, student-centric perks, access to your credit score or a credit monitoring service of prime importance, along with the ability to prequalify for the card with only a soft credit pull and a clear path to increase your credit limit or graduate to an unsecured or full-fledged rewards card.

Cards that include these benefits are likely to score higher according to our credit-building card and student card scoring rubrics and are more likely to earn a place in our list.

No credit cards offer guaranteed approval. A secured card may be more accessible because of more lenient credit requirements, but an issuer could still deny your application. 

With a secured card, you’ll have to apply and put down a security deposit (usually a minimum of $200). This security deposit typically acts as your credit limit, but it doesn’t fund your account. Like any other credit card, the issuer loans you the money you’re using with a secured card. Using a secured card can help you build credit, but since you’re borrowing money, you’ll have to watch out for interest rates and late fees.

Although secured cards are among the easiest credit cards to qualify for, not everyone will make the cut. Your application for a secured credit card might be denied if you have serious problems with your credit history, such as bankruptcy. Fortunately, some credit cards don’t automatically disqualify you for having a bankruptcy on your credit report.

Learn more: What to do when your credit card application is denied

When you close the account, typically you will receive your full deposit back as long as there are no outstanding charges. Check the issuer’s terms and conditions to confirm the refund policy.

That depends on your finances and the minimum and maximum amounts allowed. If you don’t plan to use the card much and can pay your balance in full each month, just putting down the minimum security deposit could work.

If you plan to use the card often and think you may carry a balance from time to time, try to put down a larger deposit to get a matching credit limit. Having a higher credit limit and only using a small percentage of it can help you maintain a low credit utilization ratio.

You might be able to increase your credit limit by increasing your security deposit (though there may be a cap). Some secured cards will automatically review your account after a set time period and consider an increase in your credit limit with responsible card use. However, not all cards offer credit limit increases. Check with the issuer to see if an increase is possible and how.