Last updated on August 5th, 2021
When people want to rebuild their credit they usually look for personal loans to pay off debt or consolidate existing credit card balances. They may also consider using a credit repair service, or a credit reporting services.
One credit repair route that they should consider carefully, however, is secured credit cards. Secured cards allow build your credit history, boost your credit score and enjoy the purchasing power a real credit card. So, what are the best secured credit cards for rebuilding your credit of 2020?
The Best Secured Credit Cards for Repairing Your Credit Score
One of the most crucial aspects of rebuilding credit is creating a history of on-time payments and responsible use of credit products. While many might shy away from them, secured credit cards are an excellent option for those looking to bounce back from bankruptcy, default, or any other credit issues.
What Makes a Good Secured Credit Card?
When looking for a secured credit card for rebuilding credit, there are certain things to consider. First, note the minimum deposit. This deposit is what makes a secured card “secured.” The minimum deposit varies significantly and can make the difference between a good option or a bad one.
Look for a secured card with a minimum deposit of $200. This deposit level makes the card much more affordable for those with limited access to funds.
Here’s what to look for in a secured card:
- Modest annual fee (lower than $50)
- Low minimum deposit ($200 is a reasonable minimum)
- A purchase APR below the national average (lower than 18% APR)
- Regular reporting to the major credit bureaus: Experian, Equifax, and TransUnion
The Best Secured Credit Cards of 2020
Paying your statement valance in full each month is one of the best ways to repair a bad credit score quickly. Sometimes, however, you can’t pay your entire credit card statement. When this scenario arises, make sure you have a secured card that offers the versatility to carry a balance from month-to-month.
The First Progress Platinum Prestige is one of the best credit cards for carrying a balance. The card, which features a modest $49 annual fee, has an impressive variable-rate APR of 9.99%. Most secured cards have an interest rate double that figure, making the First Progress Platinum Prestige an excellent option to consider.
The Applied Bank Gold Preferred Secured Visa offers the same low APR as the First Progress Platinum Prestige and a similar annual fee ($48 per year). Thanks to monthly reporting to all the major credit bureaus, the Applied Bank Card is an ideal companion for those looking to build credit – but carry a small balance.
While the Assent Platinum Mastercard has a slightly higher interest rate than the First progress Prestige and Applied Bank Gold Preferred cards, at 12.99%, it is also one of the only secured credit cards that feature 0% intro APR on purchases.
New accounts enjoy six months of 0% introductory APR on purchases. For those planning on making a purchase they want to pay down over time, the $49 annual fee of the Assent Platinum Mastercard is more than worth the cost.
First Progress also offers a secured credit card with a similar APR to the Assent Card. The First Progress Platinum Select Mastercard offers features a variable 13.99% APR on purchases and a lower $39 annual fee.
The very reasonable APR and annual fee make this card perfect for those who plan on paying their bills fully each month but want the versatility to carry a balance if needed. The Platinum Select is a well-rounded secured card that appeals to anyone who wants to repair their credit.
The Best Secured Card Without a Credit Check
Carrying a balance is not advisable for those trying to rebuild their credit score. And, while paying interest and keeping a balance is a reality for many people, if you do not have to – don’t. Those who will pay their statement balance in full each month can pay less attention to the APR, and more to the annual fee.
The OpenSky® Secured Visa® Credit Card is one of the most popular secured cards on the market – and it’s easy to see why. The card features an annual fee of $35 and the usual purchasing power and security that comes from a full-fledged Visa credit card.
The real value of the OpenSky Secured, however, comes from the fact that there is no credit check required to apply. No credit check means applying for the card will not hurt your credit score. This feature lets you build credit quickly – and without any initial harm to your credit score.
Finding the ideal secured card to rebuild your credit can be challenging but paying attention to the tips provided can increase your chances significantly. Always take note of the annual fee, the minimum deposit, and the perks the card offers.
If you want a higher credit line, consider saving for an additional deposit amount – typically up to $2,000, depending on credit card issuers.
For those who still need to carry a balance, prioritize the APR, and stick with a card that provides the lowest possible interest rates. For those who want to protect their credit score, a card like the OpenSky Visa Secured does not require a credit check.
And for those in between, there is a great selection of secured credit card offers on our best secured credit cards listings page. We have offers from leading banks, like the Citi Secured Mastercard, Secured Mastercard from Capital One, and the Discover It Secured, which offers 2% back at gas stations and restaurants – plus credit cards for bad credit from local banks and credit unions.
Photo by Moritz Mentges on Unsplash
Related Article: Looking for a Secured Credit Card? Here Are Top Picks to Consider