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Best Secured Credit Cards

March 2024

All things considered, a secured credit card is one of the best ways to establish a credit history if you need to rebuild your credit or you don’t have a credit history.
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Borrowers typically use secured cards to establish credit if they are new to borrowing, or to fix credit if they've made some mistakes in the past. Secured cards require you to provide a cash security deposit, usually equal to your credit line. The issuer holds the deposit in case you don't pay your bill. You'll get the deposit back when you upgrade to a regular "unsecured" card or close the account in good standing. Because the deposit protects the issuer from losing money, secured cards are easier for people with bad credit or no credit to qualify for.
As you use the card, the card issuer will report back your payment activity to the credit bureaus that compile credit reports and credit scores. Pay your bill on time every month, and you can begin to strengthen your credit.
That said, secured credit cards aren't ideal for many people. They require a security deposit — one card's deposit is as low as $49, but most require at least $200 or $300 — which some low-income consumers may not be able to afford.
But if you can afford the upfront deposit, here are secured credit cards that rise above the rest.
Compare All Credit Cards

FAQs on Secured Credit Cards

How does a secured credit card work?

A secured card is an actual credit card, unlike a debit card or prepaid card. As the name implies, a secured credit card is secured by money that you deposit with the issue (by contrast an unsecured card requires no cash deposit). In some cases, the deposit is saved in an interest-earning account tied to the secured credit card. The issuer holds the deposit in case you don't pay your bill. You'll get the deposit back when you upgrade to a regular "unsecured" card or close the account in good standing.

How to pick the right secured credit card

To make sure you're getting the best deal, compare rates and terms of several secured credit cards as well as SuperMoney community reviews. A key feature to look out for is a secured card without an annual fee. Also make sure to review cards that offer rewards and a grace period before interest is charged.

Do secured credit cards build credit fast?

Using a secured card can be an effective way to establish a positive credit history, but it's not a one-size-fits-all strategy. For some consumers, using a secured credit card can help their credit within as little as six months of opening the account — for others, notable improvement can take much longer.

Can you be denied a secured credit card?

Even though secured credit cards are available to people with bad credit, and even though the security deposit reduces the risk to the issuer, approval is not guaranteed for everyone.
In most cases, the credit card issuer will still check your credit. You may not get approved if you have a bankruptcy on your record, a history of missed payments or other red flags.
You'll also have to show that you have income so you can pay your credit card bill. Yes, the issuer has your deposit, but it will use that money to cover your bill only as a last resort. You're expected to pay your bill every month, so you'll need income.

What's the difference between secured and unsecured credit cards?

A secured credit card is a credit card that is funded by you. The amount you deposit for the card determines your limit. On the other hand, an unsecured card does not require you to fund it. Another big difference between the two is that secured cards are usually easier to get. They are known as second chance cards for a reason.

How long should I keep a secured credit card?

Keep the secured card for at least a year. After 12 months of positive activity, you should start looking closely at your score.

How do you apply for a secured credit card?

Every issuer handles things a bit differently, but the process of applying for, receiving and using a secured credit card works like this:
  1. You apply for the card. The issuer evaluates how risky you are (a process called underwriting), and if you pass muster, you're approved.
  2. You fund the deposit. Before the issuer will open your account, you have to pay your security deposit. In some cases, you must provide bank account information with your application so the deposit can be transferred right away. Other times, the issuer will give you some time to pull together the deposit. If you neglect to fund the deposit, the issuer will change the status of your application from approved to rejected.
  3. You receive the card. Once your deposit is funded, the issuer will send you your card. You can then use it just like any other credit card. In general, it's best to use less than 30% of your available credit at any given time, so don't go maxing out your secured card. Use it for a few small purchases each month and pay them off promptly.
  4. You get your bill and pay it each month. Because secured cards tend to charge very high interest rates, it's best to pay your bill in full every month to avoid finance charges. The issuer reports your payments to the credit bureaus, which helps you build credit.
  5. You upgrade. As your credit moves from bad to average to good, you'll be in a position to qualify for better cards.

What are some alternatives to secured credit cards?

Prepaid debit cards

Prepaid debit cards offer convenience and are a safer alternative than carrying cash, but they don't help you build credit. With a prepaid debit card, you "load" money onto the card, and the purchases you make are paid for with that money. Since you're not borrowing money, there's no effect on your credit score. See SuperMoney's best prepaid cards.

Credit-builder loans

Secured credit cards are best if you don't anticipate having problems with overspending. But if that's not the case, consider a credit-builder loan instead. With credit-builder loans, loan proceeds are typically placed into a certificate of deposit (CD). The CD is used as collateral for the loan and the borrower makes monthly payments to pay the loan off. When the loan is paid off, the CD goes to the borrower. If you're going ahead with a secured card, stay vigilant with your budget. Borrowers should make a budget and be honest with themselves if they can commit to managing the card properly. Otherwise, they may be starting off on the wrong foot, or revert to making previous mistakes. Learn more about credit-builder loans.

Personal loans

These loans can be secured or unsecured. Unsecured loans (those without collateral, such as a car title) generally have higher interest rates than secured loans. The better your credit, the lower your rate is likely to be. Conversely, those with bad credit can expect to pay very high rates, if they can get a loan at all. Learn more about personal loans.

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