Best Secured Credit Cards

A secured credit card is primarily considered for building credit from the beginning of rebuilding credit after a catastrophic setback. Secured cards require a specific cash security deposit similar to the credit limit of a person. If the borrower does not pay the bill on time, the issuer is liable to keep the deposit; the deposit is returned when the person upgrades the current secured card to an unsecured one or returns the amount borrowed. People that have a weak credit score can be guaranteed secured cards with a high probability rate because of the deposit they pay to the issuer.

The credit history of a person, which involves the transactions carried out over some time, is reported to the major credit bureaus from where the individual’s credit score is issued. That credit score is used to evaluate the individual’s credit history when a credit card is issued. So it is wise to go for the best secured cards available in the financial industry.

The article will discuss what secured credit cards are and what steps should be taken before buying one. We will also include the advantages and disadvantages that come with secured cards. The article will highlight how a person can get a credit card that matches his needs. Also, we will show the perks of various secured credit cards.

What is Secured Credit Cards?

To rebuild the credit, a person can use a secured credit card which helps them out. These cards come with several fees and costs and even hidden charges that must be catered for when deciding. However, it is important to look at the conditions imposed, such as the APR rate.

Unsecured credit cards are available for people with bad credit, but some come with exorbitant annual percentage rates and a slew of fees. As a result, these finest secured credit cards are frequently preferable to some unsecured credit cards that cater to people with bad credit.

The operations of Secured credit cards are identical to conventional credit cards, except a cash deposit backs them. The deposit is insurance that the issuer can use against the borrower if they default on a payment. If an individual owns a secured credit card but leaves it unused, it’s their choice as a fee will be charged nevertheless.

How Are Prepaid Debit Cards Different From Secured Credit Cards?

People often consider secured credit cards and prepaid debit cards the same. These are two completely distinct things. Every time people use a prepaid card, they withdraw from a debit account. A person is unable to develop credit with a prepaid credit card. However, with a secured credit card, a person can develop their credit history and improve their score by reporting to the three main credit agencies.

Pros of Using Secured Credit Cards

  • Because these cards pose a lesser credit risk, approval is easier.
  • These cards have lower annual percentage rates (APRs) than typical unsecured credit cards for persons with weak credit.
  • Credit limits that are lower lessen the danger of overspending.
  • Suppose a person is careful in his expenses concerning the credit card. In that case, they will qualify for an unsecured credit card with a higher credit limit, and no deposit would be needed.

Cons of Using Secured Credit Cards

  • A cash deposit is necessary to open an account.
  • Secured credit cards come with higher interest rates relative to unsecured credit cards that have lower interest rates.
  • Some secured credit cards have fees buried in the fine print, so read it carefully.

Things to Consider While Choosing the Right Secured Credit Card

Attempt to avoid paying annual fees

Any upfront fees you must pay may deplete your initial credit limit bank deposit, forcing you to begin your credit development journey with less credit available. While some secured credit cards have an annual cost, we recommend starting with a secured card with no fees, such as the majority of the cards listed below.

Check the minimum deposit requirements

Check the minimum deposit amounts, as certain cards allow you to get started with a lower initial collateral deposit. If you don’t have much cash available, a small upfront deposit may be necessary.

Check any card you’re thinking about reporting to the three credit bureaus

The purpose of getting a secured credit card should be to build credit, which is why your card must report your credit activity to the three credit bureau companies. Every card on this list discloses your payments and balances to the credit bureaus, so start with the cards we’ve reviewed.

Check for additional charges and read the fine print

Also, make sure to read the fine print for charges, particularly hidden fees. Some secured credit cards have application and annual fees, and others have a monthly maintenance fee. The cards on this list have no hidden fees, which is why we recommend them.

How to Get a Secured Credit Card

Who Can Get the Approval?

The approval process is relative for each person and depends on several factors:

The issuer will almost always check your credit report for signals that you’re a high-risk borrower. If a person is dealing with bankruptcy or is late on payment on other accounts they may have, it would be difficult for them to be guaranteed approval. 

A person has to show that they can pay the credit card bills and have the financial capacity for it. The issuer will keep your deposit, but it will only be used as a last resort to pay your bill. You must pay your bill regularly.

How does the Entire Process Work?

The procedure varies from one issuer to another, but the following are the common steps that they follow:

  1. You fill out an application for the card. The issuer evaluates the creditworthiness of a person, and if they qualify for the evaluation, they get approved.
  2. The issuer is liable to pay the deposit. You must pay a security deposit before the issuer can open your account. In some situations, you will be required to include bank account information with your application to make the deposit immediately. Other times, the issuer will offer you some leeway to put the deposit together. If you fail to make the deposit, the issuer will alter your application’s status from accepted to refused.
  3. The borrower receives the credit card. The issuer will return the amount deposited once all the obligations have been fulfilled. So you can use it like any other credit card. 
  4. The card will be delivered to you. But it is important that a person does not spend more than 30% of their available credit at once; therefore, it is advised to not max off the credit limit of the credit card. It is better to use the card for a small number of transactions and pay it off as soon as possible.
  5. Pay the bill promptly. Because secured cards have such high-interest rates, it’s better to pay off your balance in full each month to prevent financing costs. All transactions are reported to credit bureaus, which helps you develop credit.
  6. You make a change. You’ll be able to qualify for better cards when your credit improves from terrible to ordinary to good:
    • Some issuers will check your account to see whether you qualify for an unsecured card. The issuer returns the deposit when the borrower is switched to an unsecured credit card by the issuer.
    • You may need to directly request an upgrade from other issuers. It may be necessary to convert your secured account to an unsecured account or to close your secured card and start a new unsecured account. You will receive your deposit returned in either case.
    • A person can apply separately for another type of credit card like an unsecured card if the issuer fails to provide you with it. But it should be noted that not all issuers provide different kinds of cards. To recuperate your money, you’ll need to close the protected card at some point.

What could You Use instead of Secured Credit Cards?

Unsecured Credit Cards for Bad Credit

There are a few issuers who specialize in unsecured credit cards for people with bad credit; many financial institutions do not endorse them. This is because these “subprime specialty” cards come with many costs and charges. As a result, the minimum deposit is mostly exceeded, and so they charge an annual fee of $99 along with the application fee, processing fee, and other monthly charges that have hidden fees. The deposit on a secured credit card is a non-refunded expense that will not be returned, unlike the unsecured card that does not ask for a deposit.

Debit Cards with a Prepaid Balance

Prepaid debit cards are convenient and safer than carrying cash, but they do not assist in the development of credit. You can use a debit card to put money into the card and then use that money to make purchases. The credit score is not affected since the borrower is not asking for any loan or money.

Loans that Help You Build Your Credit

Several financial institutions like credit unions and certain banks work towards helping people build their credit lines. The money that is loaned to you isn’t directly handed to you. Instead, it’s put in a savings account as a liability while the individual works to pay back the loan every month. After this, the money that was put down as a deposit is returned, and that is reflected in your credit history, which positively adds to your credit score.

Loans for Individuals

These loans are available as secured or unsecured loans. Unsecured loans do not require any security deposit and come with a higher interest rate on loans borrowed from secured loans. Your interest rate will most likely be cheaper if you have good credit. Conversely, those who have bad credit will have to pay very high rates if they are granted a loan.

Best Secured Credit Cards

Capital One Platinum Secured Credit Card

The Platinum secured credit card by Capital One is well known for the low deposit that makes it the obvious choice. However, the card has several other interesting features and perks that make it an obvious choice for anyone looking to get a credit card. 

They include the following:

  • There are no annual or hidden costs. In a matter of seconds, find out if you’ve been accepted.
  • The credit card will help a person build their credit line by improving their credit score. 
  • There is a refundable security deposit starting at $49 to get a $200 initial credit line
  • No foreign transaction fees
  • No annual fee
  • Report to three major credit bureaus
  • Qualify with limited/bad credit

Despite the advantages offered by Capital One, certain drawbacks must be catered for, which include

  • No rewards
  • High APR
  • Requires minimum deposit

Discover it® Secured Credit Card

The Discover it Secured credit card is famous for its rewards schemes and upgrading strategies. It compels people, particularly those looking to get rewards out of a card. The card has the following features that should be considered:

  • There is no annual fee; you can receive cash back and improve your credit by using it responsibly.
  • By using a secured credit card, a person can build their credit history, which is reported to the credit bureaus when evaluating the credit score. Prepaid and debit cards, in general, are unable to do so.
  • By putting down a refundable deposit of $200, a person can establish a tax return file and build up their credit line. An individual must provide their personal information to the Bank when submitting their deposit.
  • A person can get a chance to get back 2% of the amount they spent up to $1000 in accumulation at specific transactions like at gas stations and restaurants every quarter. Moreover, a 1% cashback is received on all the other purchases through the credit card.
  • The company’s credit cards are widely accepted across the United States.
  • New cardholder bonus offer

The certain disadvantages that this card includes:

  • High APR
  • Requires minimum deposit

Capital One Quicksilver Secured Cash Rewards Credit Card

The Capital One Quicksilver Secured Cash Rewards Credit Card allows you to develop or rebuild your credit while still reaping the benefits of a simple, clear rewards rate.

Features of Capital One Quicksilver secured cash rewards credit card includes:

  • There are no yearly or hidden fees, and you can earn up to 1.5 percent cash back at any time. In a matter of seconds, find out if you’ve been accepted.
  • To acquire a $200 initial credit line, put down a $200 refundable security deposit.
  • Suppose a person can use the credit card in an effective way that involves making payments promptly. In that case, they might qualify and get their security deposit back in terms of a statement credit.
  • Enjoy the assurance of $0 Fraud Liability, which means you won’t be held liable for illegal charges.
  • CreditWise from Capital One will aid the people to keep a check on their credit score and take steps to make sure they fall in a good credit range. This is complementary and is not chargeable, and keeping an eye on your credit does not impact the credit score.
  • Earn a limitless amount of 1.5 percent cash back on every transaction, no matter where you go. There are no rotating categories or earnings caps. It’s that easy.

The biggest benefits offered by this card are:

  • Even among unsecured cards, the $0 annual charge card earns 1.5 percent cash back on all transactions, which is a great rate. It comes with a six-month automatic credit limit review and a Capital One upgrading path to a conventional, unsecured card.

With huge advantages come some drawbacks, these include:

  • A deposit is required, as is the case with all protected cards. The $200 minimum may be a difficult barrier to overcome for some.

OpenSky Secured Visa Credit Card

OpenSky Secured Visa Credit Card has several main features that should be catered for. They include: 

  • The issuer carries no credit check out, and you will know right away if you’re approved.
  • With an acceptance rate of 85 percent over the last five years, OpenSky gives everyone the chance to repair their credit.
  • The company considers it important to send monthly reports to all three main credit bureaus to help people with a credit problem.
  • Over half of OpenSky cardholders who make on-time payments boost their FICO score by 30 points or more in the first three months.
  • The credit limit is directly proportional to the refundable deposit, and in some cases, it has been at $200.
  • The application process is quite easy and simple to understand and is completed quickly.
  • The due payment dates can be chosen from a calendar based on when a person can pay back the amount, giving the borrower options.
  • With $0 fraud liability, you’re safe from illegal purchases.

The biggest benefits offered by OpenSky Secured Visa Credit card are the following:

  • You can qualify even if you have terrible or no credit.

This card also has a few things that you may not like. The list includes:

  • No rewards
  • Has annual fee
  • Requires minimum deposit

Chime Credit Builder Visa Credit Card

The next Secured Credit Card on the list is Chime Credit Builder Visa Credit Card. The features included in this card are as follows:

  • No credit check is necessary to apply, there are no yearly fees or interest charges, and there is no minimum security deposit. 
  • The card can be used anywhere where a visa card is widely acceptable such as for groceries or other day-to-day expenses. 
  • With your own money, you can help enhance your credit history. You can spend the money you put into the Credit Builder protected account on your card (no minimum deposit necessary!) Enable Safer Credit Building to have your monthly balance paid on time automatically. The Chime will notify you.
  • Paying your dues on time will improve the credit line by 30 points, which will positively impact their credit score. 
  • Real-time transaction alerts can also be enabled from the settings. Then, to help prevent illegal activity, use Chime’s instant in-app deactivate card option.
  • Customer service is available all day long to help the customers with their problems. 
  • After you sign up for a Chime Spending Account and receive a qualifying direct deposit of $200 or more, you can apply for a secured Chime Credit Builder Visa Credit Card. 

The biggest benefits offered by Chime are:

  • No APR
  • Adjustable credit limit
  • No credit check
  • No annual fee

This card includes the following disadvantages too:

  • No upgrade path
  • No rewards
  • Must open a Chime account

Petal 1 “No Annual Fee” Visa Credit Card

Petal 1 “No Annual Fee” Visa Credit Card belongs to the category of No deposit alternatives. 

Small businesses and startups often issue these cards, and many do not demand any type of security deposit. 

A few facts about Petal 1 card are:

  • There is no annual fee.
  • Credit limits range from $300 to $5,000.
  • Increase your credit limit in as short as six months. The following terms and conditions apply.
  • What if you have no credit history? It’s no problem. Instead, if you’re eligible, we’ll calculate your Cash Score.
  • Cashback ranges from 2% to 10% at certain stores.
  • APRs for variable loans range from 19.99 to 29.49 percent.
  • The card has a feature to see your credit score without negatively impacting your credit. This feature opens the door for the pre-approval process too. 
  • There are no yearly or international transaction fees.
  • Several Petal 1 members can help a newcomer improve their credit line.
  • Petal’s mobile app makes managing your money, tracking your spending, and automating payments simple.
  • Petal submits credit reports to all three main credit bureaus.
  • There are no deposits necessary.

These are the benefits offered by Petal 1 credit card:

  • Qualify with limited/bad credit
  • No annual fee
  • Reports to the three major credit bureaus
  • No foreign transaction fees

The drawbacks of getting this credit card are:

  • No intro APR offer
  • No bonus offer

Frequently Asked Questions

What’s the difference between a secured credit card and a standard one?

To qualify for a secured credit card, a person has to pay a security deposit, but this is not needed in the case of a standard or unsecured credit card. A specific amount is required to open an account involving a secured credit card. The amount is typical $200 but can vary from one issuer to another. The deposit acts as a liability for the borrower that will be used up by the issuer when a default payment is carried out. Secured credit cards have a higher percentage to qualify for since they pose less risk to the issuer.

Does a secured credit card come with a minimum deposit?

Secured credit cards normally need a minimum deposit of $200 to $300; however, some have higher minimums of $500. See the chart above for the deposit requirements.

Is the deposit necessary to own a credit card with a security deposit?

No. A protected credit card is not the same as a prepaid debit card, which you may “load” with money. With a prepaid debit card, a person can put money in the card and carry out transactions. A secured card functions similarly to a standard credit card in that you make purchases with it and then pay it off later. If the payment is not carried out promptly, then the deposit is used up by the issuer. 

What credit limit does a secured card have?

Most credit cards have a deposit limit — for example, $2,500 or $5,000 — limiting your credit line. In many cases, the credit limit is the same as the deposit made to the issuer. So, if you deposit $300, your card will have a $300 credit limit. You’ll have a $1,000 limit if you deposit $1,000, and so on.

Does an individual choose to increase the credit limit on their card?

The card determines it. The credit card limit can be improved by depositing money in the card to carry out expensive transactions. Others will need you to apply for a raise when the payments are made on time, and a person does not go over the credit limit or default on existing payments, then certain issuers will increase the credit limit on your credit card. Depending on the card, it may also be possible to receive a greater credit line without depositing extra money.


The best credit card solution for people with no credit or bad credit is Secured credit cards. Almost all people can get approval for secured credit cards, and then they can start building a credit profile. The primary step is to put down a cash deposit of an amount equal to the credit card’s limit into a collateral account. There are two ways to get the deposit returned: by closing a secured account in good standing or by upgrading the secured card to a non-secure one. 

The decision to choose the right type of credit card is a very confusing one. A solution to this should include looking for various available options and carrying out their due diligence. This includes knowing about interest rates and then making timely payments to free oneself from default payments.

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Robert Ferry

We are an unbiased knowledge center for finance and our goal is to help you make your own, educated decisions about getting your credit life turned around.