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Compare the Best Secured Credit Cards

Finding the best secured credit card may seem like a headache if you have no credit or bad credit. Let BestCards.com help with its comprehensive secured credit card reviews and up-to-date details. Get answers to “What is a secured credit card?” and find the best offer for you today.

What are the best secured cards of 2020?

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FEATURED CARD – READ REVIEW

First Progress Platinum Select Mastercard® Secured Credit Card

No Credit History or Minimum Credit Score Required

First Progress Platinum Select Mastercard® Secured Credit Card
  • Regular Purchase APR 13.99% variable based on the Prime Rate
  • Cash Advance APR 19.99% variable based on the Prime Rate
  • Annual Fee $39
  • Credit Needed Poor , No Credit Required
  • Processing Network Mastercard
Best Benefits
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum Mastercard® Secured Credit Card
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • 24/7 Online Access to Your Account
Rates & Fees
  • Regular Purchase APR: 13.99% variable based on the Prime Rate
  • Cash Advance APR: 19.99% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 3% of the amount of each cash advance, whichever is greater
  • Annual Fee: $39
  • Foreign Transaction Fee: 3% of the transaction amount
  • Late Payment Penalty Fee: Up to $40
  • Return Payment Penalty Fee: Up to $29
  • Minimum Deposit Required: $200

FEATURED CARD – READ REVIEW

OpenSky® Secured Visa®

No Credit Check to Apply

OpenSky® Secured Visa®
  • Regular Purchase APR 17.39% variable based on the Prime Rate
  • Cash Advance APR 17.39% variable based on the Prime Rate
  • Annual Fee $35
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • Build credit with on-time payments
  • Reports to the three leading credit bureaus
  • Credit limist between $200 and $3,000
  • Visa benefits and protections
Rates & Fees
  • Regular Purchase APR: 17.39% variable based on the Prime Rate
  • Cash Advance APR: 17.39% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $6 or 5% of the amount of each cash advance, whichever is greater.
  • Annual Fee: $35
  • Foreign Transaction Fee: 3% of each transaction in U.S. dollars
  • Late Payment Penalty Fee: Up to $38
  • Return Payment Penalty Fee: Up to $25
  • Minimum Deposit Required: $200
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

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Showing 57 Cards

Date Reviewed: August 01, 2019

Golden 1 Platinum Secured Visa® Card

Golden 1 Platinum Secured Visa® Card
  • Regular Purchase APR 13.79% variable based on the Prime Rate
  • Balance Transfer APR 13.79% variable based on the Prime Rate
  • Cash Advance APR 13.79% variable based on the Prime Rate
  • Annual Fee None
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • No annual fee
  • Funds used for deposit will earn dividends
  • Credit limit: $250 to $3000
  • Low APR
Rates & Fees
  • Regular Purchase APR: 13.79% variable based on the Prime Rate
  • Balance Transfer APR: 13.79% variable based on the Prime Rate
  • Cash Advance APR: 13.79% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $5 or 2.5% of the amount of each cash advance, whichever is greater
  • Foreign Transaction Fee: Up to 1.4% of each transaction in U.S. dollars
  • Late Payment Penalty Fee: Up to $15
  • Return Payment Penalty Fee: Up to $25
  • Minimum Deposit Required: $250
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

Date Reviewed: June 21, 2019

Wells Fargo Business Secured Credit Card

Wells Fargo Business Secured Credit Card
  • Regular Purchase APR 15.15% variable based on the Prime Rate
  • Balance Transfer APR 15.15% variable based on the Prime Rate
  • Cash Advance APR 23.99% variable based on the Prime Rate
  • Annual Fee $25 per card
  • Credit Needed Poor , No Credit Required
  • Processing Network Mastercard
Best Benefits
  • Perfect for companies with little or no credit history
  • No foreign transaction fees
  • Up to 10 employee cards
  • Earn 1 point on every $1 spent
  • Receive 1,000 bonus points when your company spend is $1,000 or more in any monthly billing period
Rates & Fees
  • Regular Purchase APR: 15.15% variable based on the Prime Rate
  • Balance Transfer APR: 15.15% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 5% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 23.99% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Annual Fee: $25 per card
  • Late Payment Penalty Fee: Up to $50
  • Return Payment Penalty Fee: $29
  • Minimum Deposit Required: $500

Date Reviewed: June 19, 2019

SunTrust Secured Credit Card

SunTrust Secured Credit Card
  • Regular Purchase APR 19.99% variable based on the Prime Rate
  • Balance Transfer APR 19.99% variable based on the Prime Rate
  • Cash Advance APR 24.99% variable based on the Prime Rate%
  • Annual Fee $32
  • Credit Needed Poor , No Credit Required
  • Processing Network Mastercard
Best Benefits
  • Earn 2% cash back on up to $6,000 spent annually on gas and groceries
  • Earn 1% unlimited cash back on all other qualifying purchases
  • Earn interest on your security deposit while you build your credit
  • Get set up with SunTrust Loyalty Cash Bonuses
Rates & Fees
  • Regular Purchase APR: 19.99% variable based on the Prime Rate
  • Balance Transfer APR: 19.99% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 4% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 24.99% variable based on the Prime Rate%
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Annual Fee: $32
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $39
  • Return Payment Penalty Fee: Up to $39
  • Minimum Deposit Required: $300

Date Reviewed: June 14, 2019

Bank of the West Secured Credit Card

Bank of the West Secured Credit Card
  • Regular Purchase APR 20.99% variable based on the Prime Rate
  • Balance Transfer APR 20.99% variable based on the Prime Rate
  • Cash Advance APR 24.99% variable based on the Prime Rate
  • Annual Fee $25
  • Credit Needed Poor , No Credit Required
  • Processing Network Mastercard
Best Benefits
  • No credit history or minimum credit score needed to qualify
  • Credit limit is set by the amount deposited into an interest-earning savings account
  • $25 annual fee
  • Ability to help build credit with on-time payments
Rates & Fees
  • Regular Purchase APR: 20.99% variable based on the Prime Rate
  • Balance Transfer APR: 20.99% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 4% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 24.99% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Annual Fee: $25
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $38
  • Return Payment Penalty Fee: Up to $38
  • Minimum Deposit Required: $300

Date Reviewed: May 20, 2019

BBVA Secured Visa® Business Credit Card

BBVA Secured Visa® Business Credit Card
  • Regular Purchase APR 16.24% variable based on the Prime Rate
  • Balance Transfer APR 16.24% variable based on the Prime Rate
  • Cash Advance APR 25.24% variable based on the Prime Rate
  • Annual Fee $0 for the first year. After that, $40
  • Credit Needed Fair , Poor
  • Processing Network Visa
Best Benefits
  • 3X points at office supply stores
  • 2X points at gas stations and restaurants
  • 1X point for every $1 in purchases
  • Free employee cards
  • Annual fee is waived the first year
Rates & Fees
  • Regular Purchase APR: 16.24% variable based on the Prime Rate
  • Balance Transfer APR: 16.24% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 4% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 25.24% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Penalty APR: 27.24% variable based on the Prime Rate
  • Annual Fee: $0 for the first year. After that, $40
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $49
  • Return Payment Penalty Fee: $25
  • Over Limit Penalty Fee: $39
  • Minimum Deposit Required: $500
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

Date Reviewed: May 20, 2019

BBVA Optimizer Credit Card®

BBVA Optimizer Credit Card®
  • Regular Purchase APR 22.24% variable based on the Prime Rate
  • Balance Transfer APR 22.24% variable based on the Prime Rate
  • Cash Advance APR 31.24% variable based on the Prime Rate
  • Annual Fee $40
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • Designed for people who need to build or improve their credit history
  • Credit line can be increased anytime with deposits to savings account
  • Acceptance at over 28 million locations worldwide that accept Visa®
  • Competitive APR on purchases
Rates & Fees
  • Regular Purchase APR: 22.24% variable based on the Prime Rate
  • Balance Transfer APR: 22.24% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 4% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 31.24% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Annual Fee: $40
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $37
  • Return Payment Penalty Fee: Up to $27
  • Minimum Deposit Required: $500
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

Date Reviewed: May 20, 2019

Key Secured Credit Card

Key Secured Credit Card
  • Regular Purchase APR 22.99% variable based on the Prime Rate
  • Annual Fee None
  • Credit Needed Poor , No Credit Required
  • Processing Network Mastercard
Best Benefits
  • No annual fee
  • This card reports your history to credit bureaus
  • Account is reviewed twice a year to determine if you're eligible for an unsecured credit card
  • Temporary lock feature allows you to freeze card activity if you misplace it
Rates & Fees
  • Regular Purchase APR: 22.99% variable based on the Prime Rate
  • Foreign Transaction Fee: 3% of the amount of each transaction in U.S. dollars
  • Late Payment Penalty Fee: Up to $39
  • Minimum Deposit Required: $300

Date Reviewed: May 10, 2019

Union Bank Secured Visa® Credit Card

Union Bank Secured Visa® Credit Card
  • Regular Purchase APR 18.99% variable based on the Prime Rate
  • Balance Transfer APR 18.99% variable based on the Prime Rate
  • Cash Advance APR 25.25% variable based on the Prime Rate
  • Annual Fee $25
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • Get started on setting up or repairing your credit history with this card
  • Free access to your FICO® Score
  • Chip security included
  • Receive supplemental coverage for damage and theft for your phone when you pay your mobile bill with the Union Bank Secured Visa® Credit Card
Rates & Fees
  • Regular Purchase APR: 18.99% variable based on the Prime Rate
  • Balance Transfer APR: 18.99% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 5% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 25.25% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $15 or 5% of the amount of each cash advance, whichever is greater
  • Annual Fee: $25
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $37
  • Return Payment Penalty Fee: Up to $35
  • Minimum Deposit Required: Disclosed after account opening
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

Date Reviewed: May 10, 2019

Union Bank Business Secured Visa® Credit Card

Union Bank Business Secured Visa® Credit Card
  • Regular Purchase APR 13.99% variable based on the Prime Rate
  • Balance Transfer APR 13.99% variable based on the Prime Rate
  • Cash Advance APR 25.25% variable based on the Prime Rate
  • Annual Fee $30
  • Credit Needed Fair , Poor
  • Processing Network Visa
Best Benefits
  • Establish your personal and business credit history with responsible use
  • Chip security included
  • 24/7 online account access
  • Easily set spending limits and establish alerts
Rates & Fees
  • Regular Purchase APR: 13.99% variable based on the Prime Rate
  • Balance Transfer APR: 13.99% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 5% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 25.25% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $15 or 5% of the amount of each cash advance, whichever is greater
  • Annual Fee: $30
  • Foreign Transaction Fee: 3% of the transaction amount in U.S. dollars
  • Late Payment Penalty Fee: Up to $39
  • Return Payment Penalty Fee: $35
  • Over Limit Penalty Fee: $35
  • Minimum Deposit Required: Disclosed after account opening
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

Date Reviewed: April 22, 2019

Regions Explore Visa® Credit Card

Regions Explore Visa® Credit Card
  • Regular Purchase APR 22.99% variable based on the Prime Rate
  • Balance Transfer APR 22.99% variable based on the Prime Rate
  • Cash Advance APR 24.99% variable based on the Prime Rate
  • Annual Fee $29
  • Credit Needed Poor , No Credit Required
  • Processing Network Visa
Best Benefits
  • Secured by a Regions Explore Card savings account, this can help build credit history with responsible use
  • Gain access to Purchase Security and Warranty Manager benefits
  • Use with Google Pay™, Apple Pay® and Samsung Pay
Rates & Fees
  • Regular Purchase APR: 22.99% variable based on the Prime Rate
  • Balance Transfer APR: 22.99% variable based on the Prime Rate
  • Balance Transfer Transaction Fee: Either $10 or 4% of the amount of each transfer, whichever is greater
  • Cash Advance APR: 24.99% variable based on the Prime Rate
  • Cash Advance Transaction Fee: Either $10 or 4% of the amount of each cash advance, whichever is greater
  • Annual Fee: $29
  • Late Payment Penalty Fee: Up to $39
  • Minimum Deposit Required: $250
Credit Card Deals
  • Spoil your pup with a FREE upgrade to BarkBox. - Offer Expires on December 31, 2020 - See Details
  • Save 10% on all Afternoon Tea orders - Offer Expires on December 31, 2020 - See Details
  • Save 10% on The Berlin Pass - Offer Expires on December 31, 2020 - See Details
  • Complimentary EZ Mini Crunchies (60g) when you spend S$120 - Offer Expires on December 31, 2020 - See Details
  • 10% off museum entry - Offer Expires on December 31, 2020 - See Details
  • Save up to 55% on London theater tickets - Offer Expires on December 31, 2020 - See Details
  • Save an extra 10% on Tower of London access tickets - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Alamo® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save 5% with Enterprise Rent-A-Car® at participating locations - Offer Expires on December 31, 2020 - See Details
  • Save an extra 5% on The Paris Explorer Pass - Offer Expires on December 31, 2020 - See Details
  • View All Deals -

#

How Does a Secured Credit Card Work?

If you have no credit history or you’ve had some issues with finances in the past, you may struggle to get approved for a credit card. Yet without one, it can be difficult to build or rebuild your credit score to qualify for future offers. 

To break this cycle, many issuers offer secured credit cards for bad credit, which gives consumers a chance to work on their credit with less risk. In exchange for a cash deposit, secured cardholders gain a small credit line and occasionally a few other perks to help them boost their scores. 

Secured vs Unsecured Credit Card

Most credit cards offer unsecured lines of credit, meaning they require no deposit for you to borrow against. Unsecured credit is risky for lenders – if you default on your account, they have no collateral to rely on to recoup the losses.  

The most obvious difference between a secured credit card and an unsecured card, then, is the need for a security deposit. Generally, issuers hold onto this deposit for the life of the account and even use it to determine your credit limitWith the deposit lowering the overall risk to lenders, these cards become some of the easiest to apply for. 

Some issuers require a deposit into a new bank account. For issuers you already have a relationship with, they may tie your secured card to an existing bank account. While tying the card to a current savings account may sound a lot like a debit card, this is not the case.

Since most applicants for secured cards have poor or little to no credit, these cards typically have higher interest rates as well. Some unsecured credit cards still market themselves to those with poor creditbut these usually impose high fees to offset the increased risk.   

Who Should Apply? 

While anyone can apply for a secured credit card, they’re best suited to those in need of a credit boost. This includes consumers with previous financial troubles affecting their credit, as well as those with a thin credit historySecured cards can also be useful to students who want to build a credit history, but aren’t ready to apply for an unsecured student credit card.  

How to Use a Secured Card

Though secured cards still operate similarly to their unsecured counterparts, it’s best not to use them the same way. For example, you don’t necessarily want to carry a balance on a secured card, due to the commonly high APRs. Plus, carrying a balance can significantly cut into an already-low credit limitThis will increase your credit utilization ratio and hurt your score. 

To get the most out of this type of credit card, it’s best to use it with care. This means: 

  • Using the card for smaller purchases. This will help you avoid maxing-out the credit line and make your payments easier to meet.  
  • Making payments on time each month. Payment history is the most important factor when it comes to your credit report, which means missed payments can really hurt your score. 
  • Paying off the balance in full. This frees up your credit line for the next month and thus keeps your credit utilization ratio down. Plus, you’ll avoid activating that high interest rate. 

Most of these are important factors when it comes to using any credit card, but they are especially vital for secured cards if you want to improve your credit. Once you’ve established a positive credit history, some issuers allow you to upgrade to an unsecured credit card directlyIf not, you can submit a new application for the unsecured card you want. 

Building Credit with Secured Cards

Building credit with a secured card is the same as with any other card, just with the safety net of a deposit and smaller credit limit. First, you need to understand how a credit score is calculated, with FICO being the most popular model with lenders.

building credit with a secured card

The FICO Scoring model judges an applicant’s risk based on five criteria:

  • New credit, also known as “hard inquiries.”
  • Length of credit history, also known as the age of the oldest open account
  • Types of credit, or credit mix (loans, mortgages, credit cards)
  • Payment history
  • The amount owed or “credit utilization.”

The first three criteria amount for a little over a third of your credit score and are easily minable. Simply keep credit applications to a minimum, keep older accounts open to increase your credit age, and you should be fine.

Payment History

Payment history makes up 35% of your FICO Score. Because payment history has the biggest impact on your score, its critical to pay your secured card statement on-time every month. Even one missed payment can lower your score. And, since late payments remain on a credit report for seven years, those late payments can still hurt you later in life.

Credit Utilization

Equally crucial to raising a credit score is how much you pay each month. Credit utilization – or the amount of your available credit you use – makes up another 30% of the FICO Score. Keeping your credit utilization below 10%, which is ideal, Will quickly boost a score.

Of course, not everyone can pay their balance in full every month, which is why secured cards like the Green Dot primor® Secured Visa® Gold Card is so impressive for those new to credit. Those planning of carrying balances should aim to keep their credit utilization below 30%. Keeping utilization below 30% helps build a credit score while reducing the amount of interest you’ll pay over time.

One of the best ways to keep credit utilization low is to only the carder for small purchases and incidentals. Only using a secured card for paying for things like drinks or snacks can help train you to use the card responsibly until you can move up to an unsecured credit card.

How to Compare Secured Cards

Here’s what to look for when comparing secured credit cards:

  • Annual Fees: Most secured cards come with an annual fee. Typically, these fees range between $25 and $50, but some can range as high as $100 or more. Cards from your local credit union, on the other hand, might have no fees at all. Check the annual fee and make sure you are getting good value for money. Does a card with a $49 annual fee offer an exceptional APR? Does the deposit earn interest? These are all things to consider.
  • Minimum Deposit Requirements: Many applicants choose a lower deposit to help them build credit while protecting their finances. Others might select a lower deposit amount because it is all they can afford. Still others might put several small deposits on a few cards. Either way, pay attention to the deposit requirements for the card. A difference of $200 and $300 might not seem like a lot, but to some, it can be the difference between being able to apply or passing a card offer up.
  • APR: Secured cards typically feature a fixed APR higher than most standard credit cards. Some, however, feature significantly higher than others. Still others feature lower interest rates, such as the Green Dot primor® Secured Visa® Gold Card or the First Progress Platinum Prestige Mastercard®.

What is the Best Secured Credit Card?

Whether it comes to the best secured cards for bad credit or no credit, you’ll want to look out for features like: 

  • Low deposit requirementsThe minimum security deposit issuers require you to make is typically around $200. If you’re short on cash, you may want to search for a card with a lower requirement. 
  • Opportunities to increase credit limit/upgrade to an unsecured card. Some issuers may reward positive credit card use with higher credit limits or upgrades with no hard credit check. 
  • Reporting to major credit bureaus. Not all cards report to major credit bureaus, which means they won’t help you grow your score.  
  • Interest payments on the security deposit. Some issuers place your deposit into a secured account for safekeeping. Others use a high-yield savings account or CD, which allows you to earn interest while the account is open. 

You may also want to look out for secured cards that offer rewards. Find out more about what to look for in a secured card in our in-depth article on this credit card category. 

Best Secured Credit Cards of 2020

Best Secured Credit Card to Build Credit: Green Dot primor® Secured Visa® Gold Card

If you want a Visa secured credit card with a low deposit and even lower APR, it’s tough to beat the Green Dot primor Gold Card.  Deposits start as low as $200, with the interest rate an impressive 9.99%. The Green Dot primor Visa is a full-fledged secured Visa credit card that offers impressive APR, monthly reporting, and credit building in one neat package. 

Best Secured Credit Card to Rebuild Credit: OpenSky® Secured Visa® 

With an already low credit score, it can be intimidating to apply for a new card – especially when it comes to the hard credit check. For that reason, OpenSky is a popular choice. This offer requires no credit check at all, with a lower-than-average APR for a secured card. 

Best Secured Business Credit Card: Wells Fargo Business Secured Credit Card 

Even business credit cards are available as secured cards. If you’re looking to start a business but your personal credit score is a little worse for wear, many recommend the Wells Fargo Business Secured Credit Card. It charges no foreign transaction fees, earns rewards for every dollar, and can provide a credit line up to $25,000. Plus, you can add up to 10 additional cards on the account for employee use. 

Best Secured Credit Card with Rewards: Discover it® Secured 

Discover’s secured card is one of the few that offers a rewards program  for useThis offer earns 2% cash back at gas stations and restaurants, and matches your earnings at the end of the first yearNot only that, Discover also eventually considers refunding your security deposit, essentially upgrading you to the unsecured Discover it® Chrome. 

Common Questions About Secured Cards

Since secured cards are not what people usually think of when they imagine a credit card, lots of questions are sure to come to mind. Here are the most commonly asked questions about secured credit cards:

Do Secured Cards Earn Rewards?

Many secured credit cards do not earn rewards. This is partially because secured cards are designed to help teach sound credit fundamentals and boost credit scores through on-time payments. The other major reason why most secured cards lack rewards is that most applicants place small initial deposits, so the credit limit isn’t sufficient for the kind of spending rewards cards require to be worthwhile.

That said, there are a handful of cards that require a security deposit and offer rewards. The most notable of these cards is the Discover It Secured. The card is like the Discover It chrome Card in that it earns 2% back on gas and dining.

It also comes with the same Discover Cashback Match after year one. The only difference with the secured version is that it requires a deposit of at least $200.

Two other secured cards with rewards are the SKYPASS Visa Secured Card and the LATAM Visa Secured Card. Both cards earn airline miles through purchases, with additional discounts on flights with Korean Air and LATAM, respectively.

How Can You Increase Your Credit Limit?

Since these cards require a deposit that also acts as the credit limit, you can always increase your credit line with an additional deposit. Most issuers have rules about how credit limit increases occur. These may include applications, extra checks, or simply transferring more funds.

How Much Should I Deposit?

Banks and lenders usually require a minimum deposit of around $200 to open a secured account. Some credit unions need as little as $50, on the other hand. On the flip side, most secured cards have a maximum initial deposit of between $3,000 and $5,000.

Again, this amount differs based on the bank and type of secured card. Business secured cards, for instance, have much higher maximum despots – sometimes up to $35,000 or more.

The amount you deposit depends entirely on your unique situation. Those new to credit should start with a small deposit. Once they get the hang of paying the balance in full (and on time), they can increase their deposit as they wish.

Those with higher credit scores can use the flexible deposits on secured cards to quickly increase their available credit. This, in turn, can promptly decrease their credit utilization rate, leading to rapid increases in their credit score.

Does My Security Deposit Earn Interest?

Like rewards, most credit cards that require a deposit do not earn interest on that deposit. Typically, deposits are held in a joint account by a card issuer. There the deposits sit until the cardholder either closes the account, or the bank claims the money due to non-payment.

Some credit union secured cards, however, do earn interest. Some popular options from larger banks do as well, such as the Green Dot primor® Secured Visa® Gold Card. While any interest cards like the primor Gold accumulate will not be enough to retire on, it is still an excellent perk worth looking out for.

Can You Be Denied for a Secured Card?

Yes. As with any other form of credit card, you can be denied a secured credit card. Despite the looser restrictions, card issuers wills till look at things like your employment, income, your payment history, and other relevant materials when you apply. If your credit history is full of late payments, you might struggle to get a secured card.

In those cases, unsecured cards like the Horizon Gold Card or the Group One Platinum Card might make sense. These cards offer a $500 unsecured line for credit for use in the Horizon outlet, which provides a wide selection of products, goods, gifts, and more. While not a Visa or Mastercard, they are still credit cards that report to the major credit bureaus. This can help you rebuild your credit with on-time payments.

Does American Express offer a secured card?

There are no secured American Express credit cards. American Express and Chase are two of the largest card issuers that don’t offer secured credit cards.

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Find the Best Card for You

The team at BestCards.com knows how hard it can be to rebuild credit, especially without the right tools and knowledge. That’s why we strive to provide insightful credit card reviewsas well as informative articles and advice to guide you. Take advantage of these resources and more to find a trusty credit-building card today!