Secured Credit Cards

Brendan Harkness

Brendan Harkness

Updated Apr 16, 2018

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If you have bad or limited credit you won’t qualify for the best credit cards on the market. But there are still options available, including secured cards.

Secured credit cards require a refundable security deposit when you’re approved. This deposit will fund your credit limit for the card. Card issuers require a security deposit because it makes the deal less risky for them.

Secured cards are meant for establishing or rebuilding your credit, so they don’t usually offer rewards. And their benefits are typically very limited.

“Secured” does not refer to credit card security features. It refers to the security deposit you need to make when the account is opened.

You can use secured cards like these to improve your credit scores over time. Eventually, after proving that you can use credit and credit cards responsibly, you’ll be able to qualify for more rewarding cards.

Credit Card Insider’s Top Secured Credit Card Picks

BEST FOR CARD
Earning Rewards, No Annual Fee Discover it® Secured Credit Card (Review)
Low Security Deposit Capital One® Secured Mastercard® (Review)
High Credit Limit Wells Fargo Secured Credit Card
No Bank Account Required Citi Secured® Mastercard® (Review)
No Credit Check Required Various Cards
Military Members and Families USAA Secured Card® American Express (Review)

The Best Secured Credit Cards of 2018

Best for Earning Rewards, No Annual Fee

Discover it® Secured Credit Card
Apply Now

Discover it® Secured Credit Card

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 24.24% Variable
Quick Card Facts
  • Double all the cash back you've earned at the end of your first year automatically - only for new cardmembers*
  • 2% cash back at restaurants and on gas - up to $1,000 per quarter.* 1% cash back on all other purchases.
  • New Freeze ItSM on/off switch lets you prevent new purchases, cash advances & balance transfers on misplaced cards in seconds by mobile app & online.*
  • Free FICO® Credit Score on statements, online & by mobile app.* And 100% U.S.-based service any time.
  • No annual fee. No overlimit fee. No foreign transaction fee. No late fee on first late payment & paying late won't raise your APR.*
  • Each Discover purchase is monitored. If it's unusual, you're alerted by e-mail, phone or text and never responsible for unauthorized purchases on your Discover card.
  • *See rates, rewards, free FICO® Credit Score terms & other info by clicking “Apply.”

The Discover it Secured Credit Card (Review) is one of the only secured cards to offer rewards, and it’s actually a pretty good program.

  • 2% cash back at restaurants and on gas (up to $1,000 in spending per quarter, then 1% cash back)
  • 1% cash back on all other purchases
  • 5–50% cash back at a variety of retailers through the Discover Deals shopping portal
  • Cashback Match: get double the cash back in your first year

So not only will you be improving your credit, you’ll be able to earn some cash back too. That Cashback Match means you’ll be getting 4% cash back at restaurants and gas stations in the first year, and 2% back for all other purchases.

A rewards program like this is rare to find on a secured card. That’s also true for the Discover Deals shopping portal, where you’ll get discounts or cash back at even more merchants. There are dozens of retailers included, like Starbucks, Uber, and Walmart.

This card requires a minimum security deposit of $200. The maximum allowable deposit will be determined by your creditworthiness, with an upper limit of $2,500. Your credit limit will be equal to the amount you deposit.

Discover will review your account and your credit every 8 months. With responsible card use, they may return your security deposit and allow you to continue using the card. There is no program to upgrade to a different Discover card.

There is no annual fee to use this card.

You’ll also get a few other benefits, like the FICO Credit Scorecard. This allows you to check one of your FICO 8 credit scores whenever you’d like. It will be based on your TransUnion credit report.

Another perk is Price Protection, a feature that could come in useful if you pay more than was necessary for an eligible item. If you see it being advertised for a lesser price later on, you could be reimbursed for the difference.

Read more in our Review of the Discover it Secured Card

Best for Low Security Deposit

Capital One® Secured Mastercard®
Apply Now

Capital One® Secured Mastercard®

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 24.99% Variable
Quick Card Facts
  • No annual fee, with all the credit building benefits
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • Free access to your credit score and learn how everyday decisions can affect your score using Capital One® Credit Wise
  • Your minimum security deposit gets you a $200 credit line
  • You may qualify for a credit line increase based on your payment history and creditworthiness with no additional deposit required
  • Easily manage your account 24/7 with online access, by phone, or using our mobile app
  • It's a credit card accepted at millions of locations worldwide

With most secured cards, your credit limit will be equal to the amount you provide for the security deposit. But that’s not necessarily true for the Capital One Secured Mastercard (Review).

Instead, you’ll be told a minimum required security deposit that you must provide, based on your creditworthiness. This will be either:

  • $49
  • $99
  • $200

Whichever amount you’re required to pay, this will fund an initial credit limit of $200. Capital One will also allow you to deposit more than your minimum required amount, up to a maximum of $1,000. If you deposit more, the total amount deposited will become your credit limit.

Deposits must be made within 80 days of being approved for the card, and before activating the card. Once you activate the card your credit limit will be set.

Cardholders have a way to increase the credit limit later on, too. After making your first 5 payments on time you’ll be granted access to a higher credit line. This might be a small increase, but it’s a good feature to have on a card with a low limit like this.

There’s also the CreditWise service, a tool for tracking your VantageScore 3.0, based on your TransUnion credit report. You can use this to monitor your credit and get specific tips to improve, based on the key factors affecting your score. CreditWise also provides actual access to your TransUnion credit report, a feature that only Capital One seems to provide currently.

Credit monitoring is another great benefit to have on a secured card, where the whole purpose is to improve your credit scores. The CreditWise tool, along with access to a higher credit limit, make the Capital One Secured Mastercard a cut above average.

Best for High Credit Limit

Wells Fargo Secured Visa Card
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Wells Fargo Secured Visa Card

For People with
No Credit

  • Annual Fee: $25
  • Interest Rate: 18.99% (Variable)
Quick Card Facts
  • Emergency Card Replacement
  • Free Online Credit Education Courses
  • Choose Your Due Date
  • Verified by Visa®: Protect your card with a unique password.

Most secured cards come with a fairly small credit limit, compared to what you can get on better rewards cards. But the Wells Fargo Secured Visa Credit Card breaks the mold, with a maximum security deposit of $10,000. The minimum deposit is $300.

So you can get a much higher credit limit with this card than other secured cards, which tend to be around $3,000 at the most. If you need a card with a high limit so you can spend a lot during each billing period, this is probably your best option when it comes to secured cards. Your credit limit will be equal to your deposit.

You must have an existing Wells Fargo checking or savings account to apply for their Secured Visa card. But if you really need a high credit line, it might be worth it for you to open an account with them. You can open a checking or savings account for as little as $25, though there will be a monthly service fee unless you maintain a certain minimum balance. That would require $1,500 in the checking account, or just $300 in the savings account.

So the cheapest option would probably be to open a $300 savings account, and then apply for this secured card. If you’re prepared to put down a security deposit as large as $10,000 or so, that $300 cost probably won’t slow you down too much. And you’ll even earn a bit of interest on the $300 because it’s in a savings account. You won’t earn interest on the security deposit.

There’s also a $25 annual fee for this card. But again, if you’re planning to put down a big security deposit this probably won’t be an obstacle.

Wells Fargo will periodically check your card activity, and your overall credit, to see if you qualify for an upgrade to an unsecured card. If you’re eligible, they will offer you the Wells Fargo Platinum Visa. This card doesn’t provide rewards but it does have a 15-month 0% intro APR on purchases and balance transfers.

Best for No Bank Account Required

Citi Secured® Mastercard®
Apply Now

Citi Secured® Mastercard®

For People with
No Credit

  • Annual Fee: None
  • Interest Rate: 23.99% Variable
Quick Card Facts
  • A minimum security deposit of $200 is required when opening the card, with a maximum of $2,500
  • The credit limit will be equal to the security deposit
  • Users can qualify with limited credit
  • Citi Identity Theft Solutions
  • No rewards
  • No annual fee
  • Purchase and balance transfer APR of 23.99% Variable

The Citi Secured Mastercard (Review) is about as simple as they come. No annual fee, no rewards, and very few benefits.

But if you don’t have a bank account, this will be one of your only secured card options. Although it will be easiest to use a bank account, you can also fund the security deposit of this card by applying for it in person at a Citibank location.

You’ll need to put down a minimum deposit of $200 when approved for this card, with a maximum of $2,500. Your credit limit will be equal to whatever you deposit.

Most of the other cards on this page require a bank account to fund the deposit. So if you don’t have one you’re usually out of luck. The Citi Simplicity will be one of your only options, and it’s not too bad overall.

If you can’t qualify for one of the better secured cards, this could still be a good option to let you improve your credit for free. Just pay your statement balance in full every billing period, and you’ll be able to prevent interest from ever accruing on purchases.

You’ll get some very basic benefits from Mastercard, such as Purchase Protection. That will cover your eligible purchases against damage and theft, but only under certain conditions.

Read more in our Review of the Citi Secured Mastercard

Best for No Credit Check Required

There are several secured credit cards that don’t require a credit check when applying, which means you’re almost guaranteed to be approved. There is still a possibility of denial, but it’s very low.

If you’ve been denied for other secured cards these may be your last option. Since they won’t check your credit you can probably get one of the following cards as long as your finances can handle it. You may still be denied if your identity can’t be verified, or if your income is too low.

These cards don’t require a credit check but they’re known for having relatively poor customer support, and the payment process may be slower than with other cards. This makes them riskier to use, and we don’t recommend them unless you can’t get anything else. You can apply for these cards without hurting your credit because they don’t pull any of your credit reports. Some cards like this don’t require bank accounts.

If you use one of these cards, be sure to completely understand how to make on-time payments so you don’t wind up accidentally hurting your credit instead of helping it.

Best for Military Members and Families

USAA Secured Card® American Express®
Apply Now

USAA Secured Card® American Express®

For People with
Bad Credit

  • Annual Fee: $35
  • Interest Rate: 11.15–21.15% Variable
Quick Card Facts
  • Best for members rebuilding or establishing credit.
  • Determine your own credit limit ($250 to $5,000) with an interest-earning CD.
  • No foreign transaction fees when you travel outside the United States.

The USAA Secured Card American Express (Review) can be a good option if you qualify for USAA membership. It doesn’t have the best features, and it comes with an annual fee, but USAA credit cards also provide special benefits for servicemembers. And these might make the card worth your while.

If you’re on active duty in the military and you qualify for the SCRA, you can get reduced interest rates with every credit card issuer, and certain fees might be waived too. Barclays and Citi will actually drop your APR to 0%, meaning you can carry a balance while on active duty without paying any interest.

This card requires a security deposit of $250 to $5,000. The amount you deposit will be the card’s credit limit. And you can make additional deposits later on to increase the limit (up to $5,000 total).

This deposit will be placed in a Certificate of Deposit (CD) account for two years, where it will actually earn interest. The APY is currently 0.54% Variable, though this will change periodically throughout the term.

So, if you were to deposit $1,000, for example, you’d end up getting back $1,010.86 after those two years are up. If you deposit the maximum of $5,000, you’d get $5,054.28.

It’s interesting to find a secured card that will actually pay you interest for your deposit, although it won’t amount to a whole lot. Most other secured cards won’t do that, including all the others listed on this page. But take note that if you close your card and withdraw the deposit before the two-year term is up, you may be charged a penalty fee. For a two-year term, this fee will be 180 days worth of interest.

This card has an annual fee of $35. There are no foreign transaction fees, making it a good spending option when deployed abroad.

Servicemembers might want this card over a non-USAA card for the special rates and benefits available while on active duty or deployed. All credit card issuers must abide by the guidelines of the Servicemembers Civil Relief Act, which caps interest rates on pre-existing balances at 6% while on active duty. But USAA will go even further, providing a 4% APR that continues for one year after you end active duty.

USAA also has another feature that other card issuers don’t offer: they’ll apply that 4% rate to all balances, both pre-existing and new, when you’re deployed or on a permanent change of station (PCS). Other card issuers will only apply the reduced rate when you’re on active duty and qualify for the SCRA.

You can also get expert assistance from USAA, during and after your deployment. They have specially trained reps to help make dealing with your finances as easy as possible while you’re serving your country.

This card could be a good option to help you improve your credit, but it may be better to use your SCRA benefits to get reduced interest rates and fees with other issuers. See our picks for the Best Military Credit Cards to learn more about those possibilities.

There’s another Visa version of this card, the USAA Secured Card Visa Platinum (Review). It’s pretty much exactly like the Amex version, with just a few small differences in the extra benefits.

Read more in our Review of the USAA Secured Card American Express

What Are Secured Credit Cards, and Are They Right For You?

Secured credit cards are designed to give people with poor, limited, or no credit history a way into the world of credit.

Unlike other types of cards, a secured card requires a refundable security deposit when you’re approved. This will fund the credit limit for the card. Your credit limit will usually be equal to your deposit. Make a $500 deposit, for example, and you’ll get a credit limit of $500 with the card.

Most secured cards require a bank account to fund this deposit. The Citi Secured Mastercard is one exception; if you don’t have a bank account you can apply for this card in person at a Citibank.

In some cases, if you show responsible credit usage, the card issuer may offer to return your deposit and allow you to continue using the card. Some issuers have a program to upgrade you to new, unsecured credit card.

Otherwise, you’ll get your security deposit back after you pay off the balance completely and close the card. If you don’t pay your bills, the card issuer will use your deposit to pay off the balance and you won’t get the money back.

Secured cards don’t usually offer many rewards or extra perks. But in some cases they might be the best option for repairing bad credit or establishing a credit history for the first time.

You can use secured cards to build up your credit because your card activity will be reported to the credit bureaus. Most card issuers report all activity to the three main consumer bureaus: Experian, Equifax, and TransUnion. Using the card properly will build a positive credit history, while making late payments or failing to pay altogether will have a very negative effect.

Eventually, after proving that you’re a responsible credit user, you’ll be able to qualify for more rewarding cards with points or cash back, and valuable extra benefits.

Other than the deposit, secured cards are pretty much just like any other credit card. You need to pay your bills on time. And if you carry a balance from month to month you’ll be charged interest, usually at a very high rate.

In some cases it could make sense to apply for an unsecured card before settling for a secured card. This might be a good strategy if your credit is not too awful, or if your credit history is limited but your credit scores aren’t too bad. If you’re looking for unsecured credit cards for bad credit (which do not require a deposit), check out the Best Unsecured Credit Cards for Bad Credit.

Consider a secured credit card if you:

  • Have poor, limited, or no credit and want to improve
  • Can put down a security deposit, usually at least $200
  • Will use it responsibly to build or rebuild your credit
  • Understand how to pay off your card correctly every billing period
  • Checked out other unsecured credit card options first

How To Build Or Rebuild Credit With Secured Credit Cards

Using a secured card is basically like using any other credit card. Most of the same rules apply, but a refundable deposit is also involved.

  • When approved for the card, make as large of a security deposit as you comfortably can to get as large of a credit limit as possible. This will make it easier to keep your credit utilization lower. And you won’t have to worry as much about hitting the limit when shopping, because you’ll have more available credit.
  • Always pay your bills on time. Make at least the minimum monthly payments.
  • We recommend paying more than just the minimum payment. Try to pay off your balance in full each month to avoid interest and help your credit utilization.
  • Be patient. The only way to establish a positive credit history is to consistently make on-time payments over a long period.
  • Track your credit scores using a free credit monitoring service to be sure that you’re making progress, and to get specific tips based on your credit reports. Discover and Capital One both have free credit monitoring tools.
  • As your credit improves, eventually you’ll be able to qualify for more rewarding credit cards. You can always check to see if you’re pre-qualified for any cards without hurting your credit scores at all.
  • When you’re ready to move on to an unsecured card, pay off your card balance in full. Then you can close the card account and get your security deposit back.

Selection Criteria: What Makes A Great Secured Credit Card?

Secured cards are designed for poor or limited credit, so they sometimes have high fees and unfavorable terms. If you don’t have good credit, your options will be limited. But some secured cards are definitely better than others, and there are several factors to look out for to find the best card for you.

  • No annual fee, or a reasonable fee: The best secured cards either have no annual fee or the fee is quite manageable, around $30 to $50.
  • No extra fees: Some secured cards have additional costs like application fees, card issuance fees, monthly maintenance fees, and others. Avoid cards with fees like these!
  • Reports to all three of the major consumer credit agencies: The major credit card issuers will report to all three major credit bureaus, but this isn’t always the case for smaller credit unions. When building a credit history it’s better to have your monthly payment activity recorded on more credit reports. Prepaid and debit cards won’t report your activity to the bureaus.
  • An appropriate security deposit and credit limit: Secured cards have different maximum credit limits. Depending on your spending habits and financial needs, you may want a card with a very large maximum limit. Or you might be satisfied with a smaller limit.
  • A program to refund the security deposit: Some card issuers will refund the security deposit and allow you to continue using the card, if you prove yourself to be a responsible credit user.
  • A program to upgrade to a different card account: In some cases, depending on your creditworthiness, card issuers will offer an upgrade to a completely different, unsecured credit card.
  • Rewards, in some cases: It’s rare to find a secured card with a rewards program, allowing you to earn points or cash back. But there are a few out there.
  • Additional benefits: Most secured cards come with a very basic set of extra benefits, like Purchase Protection. Occasionally you’ll find a secured card with more valuable benefits, like getting a higher credit line with Capital One.

Learn More: Q&A Videos

Will I Build Credit Faster with a Secured Credit Card?

Why Do Banks Turn Down Applications for Secured Cards?

 Does Closing or Converting a Secured Credit Card Hurt My Credit Score?

Credit Builder Loans

If you have poor or limited credit there are a few different routes available to you. As an alternative or complement to a secured card, you may want to look into credit builder loans. A credit builder loan is a special type of installment loan that’s designed to build a positive credit history and good credit scores.

If you’re approved for one of these loans, the amount of the loan goes into a special account you can’t access. You make payments every month to “pay off” the loan, and the bank reports this positive activity to credit bureaus. Once you’ve paid the entire amount of the loan, you’ll get the money that was “loaned” to you from the special account that you couldn’t access until the loan was paid off.

Learn more about credit builder loans offered by Self Lender

Secured Business Credit Cards

When starting a new business entity, your business needs to build credit too. While you can often open business credit cards based on your personal credit, it’s also possible to start with a secured business credit card. This could be a good option if you’ve been denied for unsecured business cards.

Learn more about secured business cards and see if one could be right for you

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