Secured credit cards offer a way to help improve your credit score if you don’t have the credit to qualify for an unsecured credit card. They require a one-time, refundable security deposit as collateral, but by paying your monthly bill on time, you could start to see an improvement in your credit.
Once your credit is higher, consider applying for better unsecured cards that feature rewards and other perks.
- Intro Offer
-
No current offer
- Annual fee
- $0
- APR
- 29.74% (Variable)
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- No Credit History
- Rewards rate
-
N/A This card doesn’t offer cash back, miles, or points
The Capital One Platinum Secured Credit Card* may give you $200 in credit when you deposit $49 or $99 -- making it one of the few secured cards to offer actual credit. (Your particular terms depend on your specific application and credit history.) And this card checks all of the boxes: $0 annual fee, modest minimum security deposit of $49 -- and the opportunity to get your deposit back as a statement credit after demonstrating responsible card usage.
You could also be automatically considered for a higher credit line in as little as six months. Also nice: Capital One may preapprove you with a soft credit check, providing a peek at eligibility before you submit an official application to the credit card company.
See our full review of the Capital One Platinum Secured Credit Card for more details.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 29.74% (Variable)
- Balance Transfer Fee
- $0 at this Transfer APR
The Capital One Platinum Secured Credit Card* may give you $200 in credit when you deposit $49 or $99 -- making it one of the few secured cards to offer actual credit. (Your particular terms depend on your specific application and credit history.) And this card checks all of the boxes: $0 annual fee, modest minimum security deposit of $49 -- and the opportunity to get your deposit back as a statement credit after demonstrating responsible card usage.
You could also be automatically considered for a higher credit line in as little as six months. Also nice: Capital One may preapprove you with a soft credit check, providing a peek at eligibility before you submit an official application to the credit card company.
See our full review of the Capital One Platinum Secured Credit Card for more details.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 29.74% (Variable)
- Balance Transfer Fee
- $0 at this Transfer APR
- Intro Offer
-
No current offer
- Annual fee
- None
- APR
- 25.49% Variable
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- N/A
- Rewards rate
-
N/A This card doesn’t offer cash back, miles, or points
The BankAmericard Secured Credit Card* offers the table stakes: a $0 annual fee and an opportunity to get your deposit back and transition to a standard credit card account. It’s got a competitive minimum credit line of $200 with a maximum of $5,000. This is a solid offering from a well-known national bank with comprehensive online tools and plenty of retail locations.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 25.49% Variable
- Balance Transfer Fee
- 3% of the amount of each transaction
The BankAmericard Secured Credit Card* offers the table stakes: a $0 annual fee and an opportunity to get your deposit back and transition to a standard credit card account. It’s got a competitive minimum credit line of $200 with a maximum of $5,000. This is a solid offering from a well-known national bank with comprehensive online tools and plenty of retail locations.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 25.49% Variable
- Balance Transfer Fee
- 3% of the amount of each transaction
- Intro Offer
-
Cashback Match™ Intro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
- Annual fee
- $0
- APR
- 27.49% Variable APR
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- No Credit History
- Rewards rate
-
1% – 2% Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter.; Earn unlimited 1% cash back on all other purchases – automatically.
Another excellent choice, the Discover it Secured Credit Card* offers a $0 annual fee and $200 minimum credit line. Discover will automatically review your account starting at seven months to see if you can transition to an unsecured line of credit and have your deposit returned.
It’s worth noting that this card also features a rewards program -- though be cautioned that it could tempt you to spend more than you can afford. And if you’re approved for the card with a lower credit line limit, the 2% cash back at gas stations and restaurants (on up to $1,000 in combined quarterly purchases, then 1%) and 1% cash back on other purchases won’t amount to much, anyway.
Check out our full review of the Discover it Secured Credit Card for more details.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- N/A
- Regular APR
- 27.49% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
Another excellent choice, the Discover it Secured Credit Card* offers a $0 annual fee and $200 minimum credit line. Discover will automatically review your account starting at seven months to see if you can transition to an unsecured line of credit and have your deposit returned.
It’s worth noting that this card also features a rewards program -- though be cautioned that it could tempt you to spend more than you can afford. And if you’re approved for the card with a lower credit line limit, the 2% cash back at gas stations and restaurants (on up to $1,000 in combined quarterly purchases, then 1%) and 1% cash back on other purchases won’t amount to much, anyway.
Check out our full review of the Discover it Secured Credit Card for more details.
- Intro Balance Transfer APR
- 10.99% for 6 months
- Intro Purchase APR
- N/A
- Regular APR
- 27.49% Variable APR
- Balance Transfer Fee
- 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)*
- Intro Offer
-
No current offer
- Annual fee
- $35
- APR
- 21.89% (variable)
- Recommended Credit A credit score is used to indicate an applicant’s credit worthiness and may provide guidance about account eligibility. It does not necessarily guarantee approval for any financial product.
- No Credit History
- Rewards rate
-
N/A This card doesn’t offer cash back, miles, or points
The OpenSky Secured credit card application doesn’t require a credit check, making it a good option -- and perhaps a last resort -- for people with low credit scores. If you’re a student and just starting out, or you’ve been declined by another issuer, this card may be a good second choice.
But you’ll have to pay the price: There’s a $35 annual fee. And given that part of the credit rehab process is leaving credit accounts open for as long as possible -- in order to build back a credit history and work toward lower credit utilization, you may end up paying that annual fee for years to come. Still, if the card helps rebuild your credit, it’s well worth the cost.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 21.89% (variable)
- Balance Transfer Fee
- N/A
The OpenSky Secured credit card application doesn’t require a credit check, making it a good option -- and perhaps a last resort -- for people with low credit scores. If you’re a student and just starting out, or you’ve been declined by another issuer, this card may be a good second choice.
But you’ll have to pay the price: There’s a $35 annual fee. And given that part of the credit rehab process is leaving credit accounts open for as long as possible -- in order to build back a credit history and work toward lower credit utilization, you may end up paying that annual fee for years to come. Still, if the card helps rebuild your credit, it’s well worth the cost.
- Intro Balance Transfer APR
- N/A
- Intro Purchase APR
- N/A
- Regular APR
- 21.89% (variable)
- Balance Transfer Fee
- N/A
What is a secured credit card and how does it work?
When it comes to making purchases, a secured credit card is similar to an unsecured credit card; you charge purchases and then pay the balance, or a portion of the balance, off each month. But secured cards require a security deposit that serves as collateral. A traditional, or unsecured card, does not require a collateral; rather, if you have a sufficient credit score, the issuer extends you a revolving line of credit.
For most secured cards, the initial security deposit is $200 though you can deposit more up to a specified maximum. However much you deposit will set your credit line. Of course, as always, the risk is spending more than you can afford.
Secured cards are designed for people with a limited credit history. The transactional activity gets reported to the three major credit bureaus: Equifax, Experian and TransUnion. Paying off your entire balance bill on time every month will increase your credit score -- as will keeping your account in good standing over time.
Note that some secured cards require a credit check, but they tend to have lighter-weight credit score requirements than standard credit cards. Usually the credit card issuer just wants to verify there are no glaring issues on your credit report such as bankruptcies or multiple debts.
Who should get a secured credit card?
If you’re just getting started and don’t have much of a track record or have a low credit score, a secured card may be easier to get than a traditional credit card. These cards are explicitly designed for people with a limited or poor credit history and can help you establish or rebuild your score over time when used responsibly.
Eligibility for a secured credit card
Even though secured cards are intended for people with lower credit scores, you’ll still need to meet a few eligibility requirements. A card issuer will want to confirm that you have an income and some will want to run a credit check.
How to choose a secured credit card
Credit score
If your credit score is below 580, you should consider a secured card. If it’s less than that, or if you have limited credit history, secured cards offer you a good opportunity to increase it as they have more lax credit requirements. Pay your bill on time each month and you should start to see an improvement in about six months.
If you’re able to deposit the maximum security deposit, it could help increase your credit score faster. A higher credit limit will help raise your credit score by keeping your credit utilization low.
Security deposit
All secured credit cards require a one-time, refundable deposit once you’re approved. Some credit card issuers may refund this deposit after you keep your account in good standing for a number of months – especially if you use your card to make at least a few purchases and then make your monthly payment on time.
Deposits range from $200 up to a specified maximum. Depositing as much as you can will provide a greater credit limit, which could help improve your credit.
Fees
Some issuers charge an annual fee for a secured credit card -- we recommend that you avoid those, given that there are plenty that do not. In the event that you choose to opt for an unsecured credit card designed to build credit, you may need to pay an annual fee.
It’s also worth noting that secured credit cards may feature higher fees than unsecured credit cards. If you pay at least the minimum monthly payment on time consistently, you shouldn’t have to worry about that.
Rewards
The primary reason to use a secured card is to burnish your credit score. As such, not all secured credit cards offer rewards -- though some do. If you’re looking for a secured card that also has a rewards program, we recommend the Discover it Secured Credit Card, which also offers a welcome bonus. Just keep in mind Discover will do a credit check which could impact your credit.
APR
One of the most important factors to consider is a card’s annual percentage rate, or APR -- the rate at which your credit card balance accrues interest. You only accrue interest if you carry a balance from month to month.
Though it’s best to pay off your entire statement balance each month, it’s critical to at least pay the minimum payment to avoid fees and penalty APRs.
How to apply for a secured credit card
Follow these steps to apply for a secured credit card:
- Choose the secured card that fits your needs.
- Apply securely on the credit card issuers site by following one of the links above.
- Deposit as much of a security deposit as you’re comfortable with. Remember, having more credit will be better for your scores, so long as you won’t be tempted to make unnecessary purchases.
- Pay your bill on time (and if you can, in full) each month.
FAQs
We recommend depositing no more than $300 to $400 for a secured credit card. Given that you want to keep your credit utilization low by paying off the account two or three times per month, the actual limit doesn’t matter too much. Any additional funds should be placed in a bank account (either checking or savings) to ensure you’re keeping your card balance at $0.
Credit scores are calculated by looking at a variety of factors related to your personal credit, including length of credit history, payment history, amounts owed, new credit and credit mix. The exact weight of each factor depends on the score model (FICO, VantageScore, or other) and your own credit history. If, for example, you have no credit history, the other factors may be weighted more heavily. (Check out this article for more information on credit scores.)
After opening a secured credit card account, it will take around one to two months for the secured credit card issuer to report it to a major credit bureau, at which point it will begin impacting your credit report and your credit score. Then it takes several additional months before the account’s activity is substantial enough to make a difference. If you maintain a low or $0 balance and manage the rest of your finances well, you could raise your score several hundred points in a year or two, but it’ll depend on your particular situation. If you have a longer credit history with a number of issues, it will take longer. If you have a shorter history, each month’s activity will play a much larger role.
By paying off your account more than once a month, you greatly reduce the risk of paying late, missing a payment or getting charged interest for an outstanding balance. We recommend choosing set days to make payments, like the 15th and 30th of every month, or the 10th, 20th and 30th.
Swipe it two or three times a month to ensure the account is considered active. There’s just no reason to use it any more than that, or make it your primary way of paying for things. A secured credit card is a tool for repairing damaged credit from an unsecured card or cards or establishing and building credit. To simplify your finances, it’s best to make other purchases with cash or a debit card. Studies show that consumers who pay with credit tend to spend more than they would if they paid with cash, so if you’re trying to right the ship or start on the right track, it’s best to first establish a budget through cash or debit card purchases to ensure you don’t spend beyond that budget.
Yes. Keeping the account open, active and with a $0 balance will continue to improve your credit score as the length of the credit history grows and you maintain a low credit utilization.
No. We don’t ever recommend transferring a balance to a secured credit card. Some websites may tout particular secured credit cards for introductory 0% APR offers but we strongly advise against transferring a balance. If you’re looking for a card for balance transfers, check out our article on the best balance transfer credit cards or look into other ways of dealing with credit card debt.
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*All information about the BankAmericard Secured Credit Card, Capital One Platinum Secured Credit Card, and the Discover it Secured Credit Card has been collected independently by CNET and has not been reviewed by the issuer.
The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
