Best Secured Credit Cards – 2016

Brendan Harkness

Brendan Harkness | Editor's Best Card Picks

Jan 08, 2016 | Updated Aug 05, 2016

The cards on this page have been chosen from the widest possible selection of cards that we could find when the page was last updated on August 5, 2016. Although Credit Card Insider does receive compensation from some card issuers as advertisers, this does not in any way influence our choice of cards or the order that cards appear on the page. We have attempted to determine the best cards in this category, regardless of our advertising relationship with the issuers.

Learn more about how we rate credit and charge cards.

Is A Secured Card Right For You?

If you have bad or no credit, with a FICO® score less than around 660, you’ll have trouble getting approved for most regular credit cards.  Credit card issuers could see you as too great a risk, and may deny your applications.

People in this situation do have a special option to help build up their credit, however: secured credit cards.

Insider Tip: If you have bad credit but don’t want a secured credit card, check out The Best Unsecured Credit Cards for Bad Credit – 2016.

How Do Secured Credit Cards Work?

With normal credit cards, the card issuer extends a line of credit to the cardholder that they can use to make purchases. This is the credit limit.

With secured credit cards, however, the cardholder is required to fund part or all of the credit limit themselves when the account is opened by placing a security deposit.

So, if you open a secured card and place a security deposit of $500, you’ll often get a credit limit of $500 or more.

Secured cards are designed to give you the convenience of a credit card while improving your credit at the same time.

They typically have higher-than-average interest rates because they are meant for riskier borrowers, but if you take our advice and pay your balance in full each month you’ll be able to avoid all interest charges. If you avoid interest you can use secured cards to build your credit without paying any fees at all.

By using a secured card responsibly, always paying your bills on time and following the card terms to the letter, you’ll prove that you can handle a line of credit without becoming delinquent.

This will improve your credit score, and you’ll eventually be able to qualify for a normal, non-secured card, like a more valuable general rewards credit card.

If you’ve been a responsible user and you decide to close your secured card or upgrade to non-secured, you’ll get your security deposit back.

Our Editor’s Picks for the Best Secured Credit Cards

These cards were picked because:

  • They have no annual fees
  • They’re offered by reputable card issuers
  • They come with some great features that people with poor credit will find valuable

There are many secured cards out there with very unfavorable terms, like annual fees, fees for paying your bills, and insanely high interest rates, with bad customer service to boot. It’s extremely important to shop around and understand what you’re getting into before applying for a secured credit card.

Insider Tip: If you’re enrolled in college or are in the military (or you have a family member in the military) you have some unique options open to you:

  • Students can get offers designed for people with limited or no credit, who are just beginning to build their credit file
  • Members of the military and their families can get secured credit cards with fantastic terms from both USAA and the Navy Federal Credit Union

Discover it® Secured Credit Card

In my opinion this is the best secured credit card available.

Why is this the best secured card?

Because it comes with almost all of the terms and features of the regular Discover it card, including the great rewards. Rewards like these are an extremely rare find in the world of secured credit cards, which may offer 1 point per dollar at the very best (because they are meant for building credit, not rewards).

The interest rates are high but the fees are great:

  • An introductory balance transfer APR of 10.99% *Variable for 6 months
  • A purchase and balance transfer APR of 23.24% *Variable
  • A cash advance APR of 25.24% *Variable
  • No penalty APR
  • No foreign transaction fee
  • No late fee for your first late payment
  • No overlimit fees

You’ll also get:

  • 2% cash back at restaurants and on gas, up to $1,000 per quarter
  • Double the cash back you receive in your first year (current promotional offer, subject to change)
  • Access to the Discover Deals online marketplace, where you’ll find more cash back opportunities at a wide variety of stores
  • The ability to see your FICO score at any time, for free (great for people rebuilding their credit who want to stay on track)
  • Shopping benefits like purchase protection, extended warranties, and return guarantees
  • Travel benefits like auto rental insurance and flight accident insurance
If you like what you see here and want to learn more about the card, take a look at our Editor’s Review of the Discover it Secured card.

Discover it® Secured Credit Card

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 23.24% *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.”

Capital One® Secured MasterCard®

Another card with no annual fee from a well-known issuer.

You’ll be able to make a security deposit in 3 different amounts:

  • $49
  • $99
  • $200

The lowest security deposit will get you a credit line of $200, while the highest will get a credit limit of up to $3,000. This is quite a good deal compared to other secured cards.

The interest rates and fees are:

  • 24.9% APR for purchases (Variable)
  • 24.9% for cash advances (Variable)
  • Late payments cost up to $35

This card also comes with quite a few minor benefits and a convenient way to keep track of your credit as you improve it:

  • The Capital One Credit Wise service includes advice on how to improve your score, a score simulator that lets you see how certain actions will affect your credit, and alerts about updates to your TransUnion® credit report.
  • The ability to choose your own due date
  • Purchase benefits like extended warranties and price protection, which gives you a discount on items you find being advertised for less than what you bought them for
  • Travel benefits like 24/7 travel assistance, auto rental insurance, and travel accident insurance

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

DCU Visa® Platinum Secured Credit Card

This secured card is offered by the DCU, the Digital Federal Credit Union, and it has no annual fee, low interest rates, and some nice extra benefits.

The interest rates are very low, even for non-secured cards, and there are few fees:

  • Purchase, balance transfer, and cash advance APR of 11.5% (Variable)
  • No fee for balance transfers or cash advances
  • Penalty APR of 18% (Variable) (may be applied if you make a late payment)
  • Late payments cost up to $35
  • No overlimit fees

And you’ll get a few nice little benefits as well:

  • An extended warranty on most purchases
  • An auto rental collision damage waiver, covering damage or theft of rented vehicles
  • Visa Travel Services, which include Travel Insurance Coverage of $500,000 and hotel room guarantees
  • A payment protection plan, which can help you out if you’re having trouble making payments

DCU Visa® Platinum Secured Credit Card

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 11.75% *Variable
Quick Card Facts
  • No annual fee
  • Extended Warranty
  • Travel Insurance
  • Build credit with this card and graduate to a better one

Applying For A Secured Credit Card

Want to apply for these cards or learn more? Just click the name below.

Discover it® Secured Credit Card

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 23.24% *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.”

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

DCU Visa® Platinum Secured Credit Card

For People with
Bad Credit

  • Annual Fee: $0
  • Interest Rate: 11.75% *Variable
Quick Card Facts
  • No annual fee
  • Extended Warranty
  • Travel Insurance
  • Build credit with this card and graduate to a better one

Did your favorite secured card make this list? How do you like using secured cards to build your credit? Let us know in the comments below, we’d love to hear from you!

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