Best Secured Credit Cards in December 2024

A secured credit card is a type of credit card that requires you to make a cash deposit upfront. This acts as collateral and secures your line of credit. The deposit amount is generally equal to your line of credit which means a $200 deposit would allow you to make up to $200 in purchases with your card.

How do secured credit cards work?

Secured credit cards work the same as unsecured credit cards (credit cards with no deposit). You can use your secured credit card to pay for purchases anywhere credit cards are accepted. Just like an unsecured credit card, a secured credit card can help build your credit history by reporting your payments to credit bureaus.

The best secured credit cards will report your credit activity to the three major credit bureaus: Equifax, Experian and TransUnion. Many secured credit cards offer regular reviews of your account after a period of time. Customers who pay their bills on time and stay well below their credit limit may be graduated to an unsecured card.

If, for some reason, you do not pay your credit card bill, the money you owe is deducted from your deposit and your account will likely be closed. In situations where you choose to close the account yourself, as long as you have no outstanding charges, your deposit will be returned in full.

The biggest difference is that an unsecured credit card does not require a deposit, while a secured credit card does. Unsecured credit cards generally have more stringent credit score requirements and offer better rewards. Secured credit cards are useful for people with poor credit or those just establishing credit.

There are unsecured credit cards available for consumers who have a poor credit score. However they are usually burdened with expensive fees so we recommend avoiding them.

Look for a secured card that offers transparent terms and no, or a low, annual fee because they can be a better tool to improve your credit without costing you anything.

TIP: Avoid unsecured credit cards designed for those with bad credit. These types of cards often charge a variety of fees such as a setup fee, an annual fee, a monthly maintenance fee, a fee to add an authorized user and other such fees. These fees often add up to more than $100 per year, which you will have to pay for the card’s entire life.

Secured credit cards are primarily best for two types of consumers: individuals with low credit scores due to mistakes in the past, and consumers with no credit history or limited credit history. But whether you’re looking to rebuild, establish or build your credit with the help of a secured credit card, it’s crucial to practice responsible card usage while doing so — by paying at least the minimum amount due on time each month and staying below your credit limit.

When deciding which secured credit card is best for you, ask yourself these questions:

What type of card do you need?

Most issuers will pull your credit report before approving or rejecting your application. If your credit history is so bad that you’re concerned it may lead to a rejection, a card with no credit check might help. Just be aware that the card will likely charge an annual fee.

Does it charge an annual fee?

You should avoid a secured credit card with an annual fee, if possible. This will not only save money, but will give you the option to keep the account open. You’ll likely move on to better credit cards, but you may want to maintain your secured card, as the overall age of your accounts is a major factor in credit scoring. Opening a card without an annual fee means you can leave your account open indefinitely without having to pay a fee each year. That said, sometimes an annual fee may be worth it, such as if you need a card with no credit check.

Do you want an opportunity to upgrade to an unsecured card?

Getting a secured card that offers a clear path to upgrade to an unsecured card and get your deposit back gives you a goal to work toward in your financial journey.

How much of a deposit can you make?

A minimum deposit requirement of $200 is fairly typical, but some secured cards will require a minimum deposit as high as $300 or even $500. With the Capital One Platinum Secured Credit Card, you may be able to start with just a $49 deposit. While you may be looking for the lowest deposit possible, you may want to consider a card that allows you to boost your deposit, to secure a larger credit line. This is because credit utilization (how much of your available credit line you are using) is a major factor in your credit score. A larger credit line will help you keep your utilization low, and may improve your credit score.

Do you want a card that earns rewards?

Building credit, not earning rewards, should be your main focus with a secured card. Still, as long as the credit card rewards don’t tempt you to overspend on your credit card, they can give you a little return on your spending.

Does your bank offer a secured credit card?

Not all banks offer secured cards, but if yours does, you might want to start by considering their card. An existing relationship with an issuer boosts your odds of approval, plus your bank is likely to offer you better cards down the line.

Here’s a list of some banks that issue secured credit cards:

• Bank of America
• Capital Bank N.A.
• Capital One
• Coastal Community Bank
• DCU
• Discover
• NFCU
• U.S. Bank

Applying for a secured credit card is simple and doesn’t take much time if you’re prepared. You’ll generally need to do the following:

1. Be prepared to provide some personal and financial information:

• Your name, date of birth and Social Security number
• Employment status and annual income amount
• Whether you rent or own your home and your monthly housing costs
• Your email address and phone number

2. Fill out the form as completely as possible. Submit your application and wait for confirmation.

3. Check your email and complete all follow-up steps, including sending (via mail or electronically) your deposit.

Once your credit card arrives, you will need to activate it. This is usually done by calling a toll-free number or logging in to your account online, according to the directions that come with your card.

As long as the credit card issuer reports account and payment activity to the three major consumer credit bureaus, using your card responsibly will help build positive credit history. Here are a few tips for building credit:

Pay on time

The most important factor in improving your credit score is to always pay on time; late and missed payments will hurt your score more than almost anything else. If your due date slips your mind, make the payment as quickly as possible, because many issuers don’t report a late payment to the bureaus until you’re behind 30 days or more. Also, set up automatic payments if possible (most issuers offer this option) — this will help keep your payment timely, while also helping you avoid expensive late fees and interest.

Keep your credit utilization low

Next, pay attention to your utilization — that is, how much of your available credit you’re using. The closer you are to maxing out your credit card, the riskier you seem to lenders and the more your credit score will suffer. A good rule of thumb is to keep utilization at 30% or less. For example, on a card with a $200 credit limit, aim to never have more than a $60 balance at any time.

Avoid applying for too many cards

In addition to payment history and utilization, avoid applying for new credit too frequently. When you apply for credit, the prospective lender checks your credit report, which generates what’s called a hard inquiry. Each hard inquiry may knock your credit score down a few points. Plus, opening new cards reduces your average age of accounts. A longer average age of accounts is better for your score.

Check your credit report

Take a close look at your credit report to see if you have any old debts in collections or errors on your credit report. While using a secured credit card can help you improve your score, taking care of blemishes on your credit report is also a crucial part of building credit. While you’re at it, take advantage of any credit scoring and credit-monitoring tools that your issuer offers — this will help you catch missed payments or suspicious activity on your credit report before it gets out of hand.

Some issuers allow you to graduate from a secured credit card to an unsecured one, and refund your deposit. Issuers like Discover and NFCU even offer clear timelines for account reviews and upgrades.

The following tips will improve your chances with these issuers:

• Use your card. Issuers like to see you’re using your card, not leaving it inactive for months at a time. If you’re concerned about overspending, consider putting a recurring subscription (such as Netflix or Spotify) on your card, setting up autopay and tucking your card away somewhere safe.
• Pay on time. This is the most important factor in demonstrating responsible credit management.
• Keep credit line utilization low.  Avoid maxing out your card. Pay in full every month if possible. Some issuers don’t offer a chance to move to an unsecured card. In that case, your best bet may be to build credit with a secured credit card for a year or more, and then apply for an unsecured card. If you pay off your secured card in full and close the account, you should be able to get your deposit back.

If you don’t have the cash available to put down as a minimum security deposit, or if you just want to consider all of your options, here are some alternatives to using a secured credit card:

• Become an authorized user on someone else’s credit card. If a parent, spouse or other family member can add you as an authorized user on their credit card, you’ll get the benefit of their credit history and on-time payments. You don’t even need to use the card at all yourself to benefit. Just make sure the primary cardholder has responsible usage and good credit history, otherwise they could end up hurting your credit score.
• Apply for a store credit card. Store credit cards, from retailers like Target, Lowe’s and Kohl’s, are usually easier for applicants with less than stellar credit to get approved for than traditional credit cards. You’ll typically get a low credit limit at first, but these cards do give you the chance to build your credit score over time.
• Consider student credit cards.If you’re a college student with limited credit history, you can also look into student credit cards. Just know, you must be at least 18 years old and have a source of income to qualify.
• Look into personal loans. A personal loan can help you build credit just like a credit card can, although you’ll typically pay higher fees and rates if you have a low credit score.
• Check out credit builder loans. You may be able to find a credit builder loan through a bank, a credit union or an online lender. Unlike with traditional loans, you don’t get money upfront, but only after finishing your payment plan. Also, know that credit builder loans aren’t free, and you’ll likely have to pay interest and perhaps a fee for opening the account. The benefit, however, is that your on-time payments will be reported to the credit bureaus.

The most obvious criterion for selecting the credit cards on this list is that all are secured cards, meaning you must submit a security deposit to the issuer. This protects the issuer in case you default on what you owe.

We also evaluated rewards programs. Many of the cards on this list earn cash back or points. While building credit should be your primary focus with a secured card, it’s still nice to have the opportunity to earn cash back on your normal spending.

Another factor was annual fees. Most of the secured cards on this list charge no annual fee, and the one that does (the OpenSky^® Secured Visa^® Credit Card) offers enough value to consumers with poor/limited credit that some will find the annual fee worth it.

Finally, if a card has other unique features — such as offering the chance for an unusually low security deposit or requiring no credit check to apply — that also weighed in favor of including the card here.

For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply