A secured credit card is backed by a cash deposit or item from the cardholder. Since there is collateral with the account, the cardholder can usually get a credit card despite having low credit or a high debt to income ratio. The collateral will be seized if the cardholder cannot make payments or if they default on their payments.
When you apply for these credit cards, there will be an amount you have to deposit to get the credit card. In most cases, the cash deposit will be equal to the credit card limit. So, if your credit card limit is $500, the cash deposit you need to put down is also $500.
Credit card issuers might make you do this if they view you as a risky borrower and are worried you might not be able to make payments.
Discover it® Secured
Reward Details
Current Offer
Credit Rating
Annual Fee
0% Intro
APR
The Discover It Secured credit card is a great way to build your credit history while still earning cash back rewards like a normal credit card. This is a great credit card option for students as well as folks trying to repair their credit history. Establish your credit line by providing a refundable security deposit from $200-$2,500 after being approved.
Bank information must be provided when submitting your deposit. Automatic reviews starting at 8 months to see if Discover can transition you to an unsecured line of credit and return your deposit.
- Rewards Plan: 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter and unlimited 1% cash back on all other purchases
- APR: 28.24% Variable
- Annual fee: $0
- Balance Transfer Fee: 5%
- Foreign Transaction Fee: 3%
- Sign Up bonus: Discover will match all the cash back you’ve earned at the end of your first year.
- 0% APR Introductory Rate period: None
- Build Credit History
- Cash Back Rewards
- Flexible Redemption Options
- Refer a Friend for Cash Back
- Put Down a Refundable Deposit
- Less Merchant Acceptance
- High Purchase APR
Is it necessary to provide proof of income?
You are unlikely to be required to provide proof of income for either card.
What are the income requirements for the card?
There is no minimum income requirement. Because Discover It Secured designed for people with bad credit, your income is just one of the factors the card issuer will consider when deciding whether you qualify for the card.
Does it send payment information to all credit bureaus?
Your payment activity will be reported to all three major credit bureaus by Discover. Furthermore, Discover offers a platform for tracking your credit score, allowing you to keep track of any changes as you use the card and work on other ways to improve your credit.
How long should I keep the card in order to improve my credit score?
Discover will review your account after seven months to see if your credit score has improved enough to qualify for an unsecured card. As a result, you should plan on using the card for at least seven months.
Is it possible to add an authorized user?
Yes, you can add an authorized user to your account. This enables a family member or friend to link their own card to your account.
Citi® Secured Mastercard®
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Annual Fee
0% Intro
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The Citi® Secured Mastercard® stands out from other secured credit cards. It's specifically designed for individuals with no credit or limited credit history, but it’s not available to those with bad credit. If you qualify, it's a great option since it has no annual fee, and it reports all your card activity to the three major credit bureaus.
The Citi Secured Mastercard offers no rewards. Some of the benefits you can get from using this card include; free FICO score access, account alerts and flexible payment due date. However, there is a high annual percentage, which is one of the disadvantages of using this card.
- APR: 21.24% – 29.24% (Variable)
- Annual fee: $0
- Balance Transfer Fee: $5 or 3%
- Foreign Transaction Fee: 3%
- Rewards Plan: None
- Sign Up bonus: None
- 0% APR Introductory Rate period: None
- Build Your Credit
- No Annual Fee
- Protection
- No Rewards/Intro 0% APR Periods / Sign Up Bonus
- High APR
- Deposit Needed
Capital One Secured Mastercard
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Current Offer
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Annual Fee
0% Intro
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On Capital One website , Terms Apply
Building your credit with a reliable secured credit card is a smart move, but not all secured cards are created equal. The Capital One Secured Mastercard has some unique features that set it apart and can help earn your trust. One standout benefit is that Capital One makes the deposit requirements more manageable, which makes this card an attractive option for those looking to build credit.
Capital One Secured Card does not give any reward. However, using this card comes with some benefits: zero fees on a foreign transaction, travel accident insurance, secondary car rental insurance, extended warranty, and 24-hour travel assistance services. Some of the limitations of using this card are the relatively low initial credit limit and the no bonus offer program than other card issuers.
- APR: 29.99% (Variable)
- Annual fee: $0
- Balance Transfer Fee: None
- Foreign Transaction Fee: $0
- Rewards Plan: N/A
- Sign Up bonus: N/A
- 0% APR Introductory Rate period: N/A
- Build Your Credit
- No Annual Fee
- No Foreign Transaction / Balance Transfer Fee
- Flexible Security Deposit
- No Rewards
- High APR
- Put Down a Refundable Deposit
Can I add an authorized user?
Yes, the Capital One Secured allows you to add an authorized user to your account. This will allow a family member or friend to have their own card linked to your account.
Do the cards report payments to all credit bureaus?
Capital One will report your payment activity to all three of the major credit bureaus. Additionally, it provides a platform to monitor your credit score, so you can keep track of any changes as you use the card and work on other ways to improve your credit.
How long does it take for card approval?
The Capital One Secured offers pre approval, which means that you can get an approval decision in a matter of minutes. If you decide to proceed, there should be a minimal delay and you can expect your new card in seven to 10 days.
How long should I use the card to improve my credit score?
A good rule of thumb is three to six months. However, Capital One will review your account after six months to determine if your credit score has increased sufficiently to upgrade to an unsecured card. So, you should be looking at using the card for at least six or seven months.
What are the top reasons not to get this card?
The top reason not to get the Capital One Secured is if you’re looking for a card that offers rewards. This is a very basic secured credit card that aims to help you build or rebuild your credit, but there are no other major benefits.
OpenSky® Secured Visa® Credit Card
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Current Offer
Credit Rating
Annual Fee
0% Intro
APR
The No Credit Check feature is probably the most exciting thing about the OpenSky Secured Credit Card. This is perfect for anyone trying to build credit, whether you’re just starting out or trying to rebuild previously damaged credit.
The OpenSky Secured Credit Card operates like the conventional unsecured credit card, except that it doesn’t check your credit. This means a poor credit score will have no impact on your account approval. You are only required to pay a refundable security deposit ($200 – $3,000) when you create an account. This deposit is what determines your credit card limit. So if you deposit $400, your credit card limit is set to $400. And you can begin using it immediately.
This card can be used to make regular purchases wherever Visa is accepted. It offers you fraud protection and the ‘secured’ status of your card is kept confidential. You are even eligible for special Visa discounts.
- APR: 25.14% Variable
- Annual fee: $35
- Balance Transfer Fee: N/A
- Foreign Transaction Fee: 3%
- Rewards Plan: None
- Sign Up bonus: None
- 0% APR Introductory Rate period: None
- No Credit Check
- Flexible Credit Limit
- You Don’t Need A Bank Account
- Reports To The Three Major Bureaus
- No Grace Period
- Annual Fee
- No Signup Bonus
- $200 Minimum Deposit
How long will I use the card until my credit score goes up?
This really depends on your circumstances and spending habits. If you’re regularly using the card and making your payments on time, you should start to see your credit score increasing in several months.
According to OpenSky, half of its customers who make payments on time see a FICO score increase of 30 or more points after just three months.
Do the card providers report payments to all credit bureaus?
Yes, OpenSky (Capital Bank) reports your payment activity to all three major credit bureaus; TransUnion, Equifax and Experian which can help to boost your credit score in a matter of months.
What are the top reasons not to get the card?
The top reason not to consider the OpenSky Secured visa is similar. While you can have some flexibility about your credit limit according to the amount you provide as a deposit, it is dollar for dollar. At a base $200 deposit, you’ll only get a $200 limit. There are other secured credit card options that provide a $200 limit with a deposit as low as $49.
What’s the initial credit limit?
The credit limit for an OpenSky Secured Visa credit card is determined by your deposit. You can provide a security deposit of $200 to $3,000 and this will act as your credit limit. So, if you pay a $500 security deposit, you’ll have a $500 limit. However, after six months you may be eligible for a credit limit increase without needing to provide an additional deposit.
What are the card income requirements?
The OpenSky has flexible requirements, so you don’t need to worry about your income to qualify. In the case of OpenSky, you simply need to prove that your income is greater than your typical monthly expenses.
First Progress Platinum Secured
Reward Details
Current Offer
Credit Rating
Annual Fee
0% Intro
APR
While there are several secured cards available to help you rebuild your credit, the First Progress Platinum Elite has some advantages. You can open an account with a deposit of $200 to $2,000. Your credit limit will be determined by the amount of your deposit. So, if your deposit is $500, you'll have a credit limit of $500.
In addition, the First Progress Platinum Elite reports to all three major credit bureaus. Every monthly payment you make is reported to Equifax, TransUnion, and Experian. This makes it easier to build your credit faster.
This is a basic secured card, but you should be aware that there are fees and charges associated with your account. The annual fee for the card is $29 , which is lower than that of comparable secured cards.
- APR: 25.24% Variable
- Annual fee: $29
- Balance Transfer Fee: N/A
- Foreign Transaction Fee: 3%
- Rewards Plan: None
- Sign Up bonus: None
- 0% APR Introductory Rate period: N/A
- Easy Application
- No Credit Check
- Set Your Own Credit Limit
- Reports to All Three Credit Bureaus
- Annual Fee
- No Upgrade Possibilities
- No Rewards & Sign up Bonus
Secured Cards - Table of Content
What You Should Look For in a Secured Card?
There are many things you need to look for when trying to choose a secured credit card. You need to make sure you are choosing the right one for you while still getting a limit you can use. Make sure to check for cards with the following features so you can be sure you are getting the best secure card for you:
- Make sure the card reports to a credit agency. This is very important if you want to be able to build credit and one day get a credit card that is unsecured. Reporting to the three credit bureaus means you will be able to raise your credit score every time you make the payment on time.
- Get a card that has regular reviews. Regular review is important because it might mean you can get an unsecured card sooner. Otherwise, you might have to apply for a new card on your own which can be more difficult.
Ask the company how often they review borrowers and what you need to show to be able to get an unsecured card sooner.
- No fees or low fees. Putting down a cash deposit can be hard enough, but it will be harder if there are high fees you need to pay for and keep up with. Try to look for a card that doesn’t have any fees.
- Rewards. Any credit card that has rewards is a good idea because it will allow you to be able to earn points and cashback while you are doing your regular spending.
How Secured Card Can Help You Build Credit?
If you have low credit, you might not be able to get credit cards right away because card issuers might view you as a risky borrower. If you are given a credit card, you might only have one with very high-interest rates or very low credit limits. This can make it difficult for you to be able to spend or have money when you need it.
Sometimes a person might be offered a secured credit card. Having a secure credit card can give you a way to be able to raise your credit. As long as you can make the cash deposit, you will be able to use the credit card just as you would use one that is unsecured.
Just make sure you are always making payments on time and try to pay off the full amount, not just the minimum payment if you can.
4 Tips to Make The Most of Your Secured Card
Using your secured card the right way will ensure you are not overspending and that you are using the secured card in the right way. Follow these tips to make sure you are maximizing your secured card:
- Make sure you are paying off the full balance. Paying off the balance every month shows you are a responsible spender and that you are using the secured card in the right way.
- Use the card regularly. You will be able to raise your credit score faster if you are using the card regularly. Just make sure you are not spending too much or more than you can pay back once the billing cycle is over.
- Make sure you don’t reach the spending limit. Even though your spending limit might be high, this doesn’t mean you need to max out the card every month. Consider only making small purchases that keep you well under the spending limit.
- Set reminders for the payment. Make sure you know the days that the payments are due and do not forget them as this can cause you to lose your cash deposit if you are defaulting on payments. It will also be reported to the credit bureaus that you are not making payments on time.
What Will my Credit Limit?
Your credit limit will depend on your credit score and finances. People with higher credit scores or low debt to income ratios are often given higher credit limits because they are viewed as less risky. If it’s your first credit card and you are building credit for the first time, your credit limit will probably be low, usually between $200 to $500.
Credit limits can be increased once you have had the credit card for a while and are making regular on-time payments. You will need to request the credit limit through the credit card company.
Who Should Consider a Secured Card?
A secured credit card is a great first card for people who are building credit and have never had a credit card. It can also be a good choice for those who have low credit and are trying to build it and make it higher. It will help you rebuild credit.
When I Can Apply For an Unsecured Card?
You will need to wait for your credit score to improve some before you apply for an unsecured card. Sometimes the credit card company will alert you when you might be eligible and it will give you ways to apply.
Make sure you are waiting until you are pre-qualified before you apply for one.
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How We Picked The Best Secured Credit Cards: Methodology
To identify the best secured credit cards, our team meticulously evaluated offerings from various issuers, focusing on major banks and financial institutions. We rated these cards based on four key categories tailored for individuals looking to build or rebuild their credit:
Security Deposit & Credit Limit (20%): We assess the terms related to security deposits and credit limits, including the minimum and maximum deposit amounts allowed, the ratio of the security deposit to the credit limit, and any potential opportunities for credit limit increases over time. Cards with flexible deposit requirements and higher initial credit limits earn higher scores in this category.
Card Features, Fees & Terms (50%): This category evaluates the fee structure and terms associated with the card, including annual fees, interest rates, penalty fees, and any additional fees such as application or maintenance fees. Cards with low fees, competitive interest rates, and favorable terms for cardholders seeking to build credit receive higher scores.
Credit Building Features (20%): We examine features specifically designed to help individuals establish or improve their credit history, such as reporting to major credit bureaus, access to credit education resources, and tools for tracking credit progress. Cards offering robust credit-building features and transparent policies earn higher ratings in this category.
User Experience & Support (10%): We scrutinize the ease of application, customer service quality, and online account management tools provided by the issuer. Cards with streamlined application processes, responsive customer support, and user-friendly online portals or mobile apps receive higher ratings, ensuring a positive experience for cardholders seeking to build credit.
This comprehensive evaluation ensures that the best secured credit cards offer accessible credit-building opportunities, reasonable fees and terms, and a positive user experience, empowering individuals to improve their creditworthiness responsibly.
