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 in these cases 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.
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.
Best Pick For
Earning Rewards, No Annual Fee
|Introductory Bonus Offer|
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, especially considering the Cashback Match.
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’s no annual fee to use this card.
You’ll also get a few other benefits, like free Social Security number alerts and Discover’s FICO Credit Scorecard. This allows you to check one of your FICO 8 credit scores whenever you’d like, based on your TransUnion credit report.
Read more in our Review of the Discover it® Secured Credit Card.
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Low Security Deposit
Instead you’ll be told a minimum required security deposit, based on your creditworthiness. This will be one of the following:
Whichever amount you’re required to pay, this will fund an initial credit limit of $200. So even if you’re only required to deposit $49, you’ll still get a $200 credit limit.
Capital One will 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 (so a deposit of $1,000 will get you a $1,000 credit line).
Deposits must be made within 80 days of being approved for the card, and before activating the card. Once you activate the card your initial credit limit will be set.
But cardholders have a way to increase the credit limit later on, too. After making your first five 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 free 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 access to actual details from your TransUnion credit report.
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 and easy account management tools through a mobile app, make the Capital One Secured Mastercard a cut above average.
This card has no annual fee, and no foreign transaction fees either.
Read more in our Review of the Capital One® Secured Mastercard®.
Learn more about Capital One® Secured Mastercard® »
Best Pick For
High Credit Limit
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 Card breaks the mold, with a maximum security deposit of $10,000. The minimum deposit is $300. Your credit limit will be equal to your deposit.
So you can get a much higher credit limit with this card than other secured cards, which tend to provide 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.
You must have an existing Wells Fargo checking or savings account to apply for this Secured Visa card. But if you really need a high credit line and can’t get one otherwise, it might be worth it for you to open an account. 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 may not 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 card. That card doesn’t provide rewards but it does have a 0% intro APR for 18 months on purchases and balance transfers, followed by a regular rate of 13.74%-27.24% Variable.
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No Bank Account Required
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 Secured Mastercard 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 help 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 some travel protections along with Purchase Protection. That will cover your eligible purchases against damage and theft, but only under certain conditions.
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No Credit Check Required
There are some 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 relatively low.
If you’ve been denied for other secured cards these may be your last options. Since they won’t check your credit you can probably get one of the following cards as long as your finances can handle it (some cards like these may check your credit, but they don’t necessarily use it to make the approval decision). You may still be denied if your identity can’t be verified, or if your income is too low.
These cards don’t require credit checks for approval but they’re known for having relatively poor customer support, and the payment processing systems may be slower or buggier than with other cards. This makes them riskier to use, and we don’t recommend them unless you truly can’t get anything else (even then, they probably aren’t a good idea). Some cards like these don’t require bank accounts, making them more attractive for people in certain situations.
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.
- First Progress Platinum Elite Mastercard® Secured Credit Card (Review): $29 annual fee, security deposit/credit limit of $200 to $2,000
- OpenSky® Secured Visa® Credit Card: $35 annual fee, security deposit/credit limit of $200 to $3,000, can provide deposit by wire transfer, Western Union, mailed check, or money order
- Green Dot primor® Secured Visa® Platinum Card (Review): $39 annual fee, security deposit of $200 to $5,000
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 line of credit 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. In some cases you can make an additional deposit later on to increase the credit line.
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 use of your cards, 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 a 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, unlike with prepaid cards or debit cards. 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 very negative effects.
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 interest 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 Credit Cards for Bad Credit. And if you’re looking for unsecured cards for limited or no credit, see the Best Credit Cards for Limited or No Credit.
Consider a secured credit card if you:
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 so it’s worth checking. When building a credit history it’s better to have your monthly payment activity recorded with all three credit 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 some out there.
- Additional benefits: Most secured cards come with a very basic set of extra benefits, like Purchase Protection and some others. Occasionally you’ll find a secured card with more valuable benefits, like the ability to get a higher credit line with Capital One.
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 a security deposit as you comfortably can to get as large a credit limit as possible. This will make it easier to keep your credit utilization lower, which is better for credit scores. 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. Aim to pay off your statement 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 using a free credit monitoring service to be sure that you’re making progress, and to get specific tips based on your credit reports.
- 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 (some issuers also have programs that let you upgrade to an unsecured card account).
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.
You can typically open business credit cards based on your personal credit, and, like regular consumer cards, it’s possible to start with a secured business card if your credit isn’t so great. 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.