Build your credit history with a secured credit card. Secured credit cards require a deposit, and may help build credit by reporting your activity to major credit bureaus. Browse the best secured credit card offers from our partners, apply to the card that suits you, make payments on time, and keep a low balance to help improve your credit score.
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Updated: April 12, 2018
If your credit isn't its best or you are new to credit, your options can be limited. But with a secured card, you can build your credit in a few months so that you can apply for a more rewarding unsecured card.
Secured cards require a refundable deposit that you are borrowing off of for your available credit limit. In many cases, they may be your only option. But they are a great way to build credit and to develop good payment habits.
We evaluated more than 200 secured credit cards using such criteria as: rates and fees, deposit amounts, ability to improve credit, customer service, and miscellaneous features and benefits. Below are our top picks for the best secured cards and further information to help you make your decision and improve your credit so you can qualify for even better offers. Here, we look at:
Wondering how to get a secured card? Or not sure how to use one? We explain below.
Secured credit cards analyzed: 228
Criteria used: Credit needed, ease of application, ability to move credit limits, deposit required, rates and fees, credit score tracking, other benefits and features, customer service, security, rewards rates
Secured cards are ideal for the consumer with credit that's not its best or someone new to credit. Because of this, bank issuers have certain systems in place to make sure their investment is protected. Here is what a secured card is and how it works:
A secured card is a credit card designed for a consumer with bad credit or a thin credit file. They require you to pay a refundable deposit, which secures your available credit, usually several hundred dollars. Because having a credit card is the easiest and fastest way to build credit, a secured card can be worth your while. Just make sure the issuing bank will report your credit behavior to the 3 major credit bureaus.
You can use a secured credit card in the same way you use an unsecured card – simply present the card to the retailer to make a purchase, provided the merchant accepts the network displayed on the front of your card (Visa, Mastercard or Discover).
You can use the card for all manner of purchases; to rent a car or hotel room; or even, in some cases, for rewards.
However, because the credit limit is typically only several hundred dollars, it's worth your while to limit use of the card to one or two small purchases a month, then pay off the bill in full before the due date. This will allow you to build your credit more effectively by keeping your balance low compared to your available credit, called your utilization ratio. Here's how it works:
If you have $500 in available credit, and you have a balance of $250, your utilization ratio is 50%, which is way too high. You want to keep your ratio as close to zero as possible and at least below 30%.
Because you don't know exactly when during the month that the card issuer will report your credit habits to the 3 credit bureaus, it's a good idea to pay in full several times a month, keeping the utilization ratio as low as possible. Create 3 reminders each month to ensure that you pay on time and often enough.
Secured credit cards can help your credit, if you pay in full and on time each month and you make sure the issuing bank reports your credit habits to the 3 major credit bureaus. By paying in full and on time, you are building your credit history as well as improving 65% of your score with a single action. If you ensure that your credit habits are being reported, then you know that the credit bureaus have what they need to share with the credit score models and lenders.
Some 32% of consumers get a credit card to build credit, while 31% get a card to build their credit limit -- both great reasons for getting a secured card. Experian polled consumers to find out what were their primary reasons for taking out a card. As you can see, building your credit and improving your credit limit were 2 of the reasons:
Source: Experian survey
As you can see, everyday purchases lead the pack, even more than rewards, but almost a third of consumers are working to build their credit, something that secured cards are good for.
Most secured cards give you a credit limit to match your security deposit, although the Capital One Secured card might give you a higher limit than your security deposit.
The deposit is refundable once you close the account, and in some cases, after you've shown yourself to be credit-worthy, you can get your deposit back and also keep the card.
Here are 3 secured cards with the required deposit and features that make them appealing:
|Capital One Secured Mastercard||$49, $99 or $200 refundable deposit based on creditworthiness||Access to higher credit line after first 5 monthly payments on time|
|Discover it Secured Card||Minimum deposit of $200||Account reviewed monthly starting at eight months, to see if deposit can be returned|
|First Progress Platinum Prestige Mastercard Secured Credit Card||$200-$2,000||Approve at any credit score, no minimum required|
You know that a secured card is a great way to build your credit, but how do you get one? Here, we look at the steps you should take before you get and while you have a secured card:
One of the biggest disadvantages to a secured card is that they can nickel and dime you with fees. But there are secured cards with very few fees as well, as you'll see below.
In a CreditCards.com survey, 100 cards were looked at for fees, identifying the cards with the most and the least fees. While a secured card was among the cards with the most fees, another secured card had among the fewest.
The survey also found that cards on average had 6 fees, and that foreign transaction fees were on the decline. The 100 surveyed cards charged a total of 591 fees in 2017, compared to 593 in 2016 and 613 in 2015.
Source: Creditcards.com fees survey
As you can see, a secured card can bulk up in fees, or it can have as few as 2, so it's worth your while to research.
Another thing to consider when getting a secured card is whether the card issuer will report your credit habits to the 3 major credit bureaus. This is a must, so that your credit is building over time.
Also, you want to look at whether it's a card you can grow into – for example, look at whether the card will allow you to eventually increase your credit limit or keep the card while returning your deposit.
And, what about rewards? Some cards, such as the Discover it Secured Card, offer such rewards as 2% back on gas stations and restaurants for up to $1,000 a quarter, as well as double back at the end of your first year.
While it depends on your goals which kind of card you get, there are a few general rules about what to avoid or at least pay attention to. For example hidden fees can surprise you after you've gotten that new card, so it pays off to do your research. Here are things you should watch out for, particularly with a secured card:
|Capital One Secured Mastercard||Limited, bad||Higher credit line after 5 on-time payments|
|Discover it Secured Card||Fair, new to credit||2% back at gas stations & restaurants up to $1,000/quarter|
A secured credit card is an excellent financial product for building credit when your credit hasn't been its best. But eventually, you want to work toward an unsecured card, because options open up for you including superior rewards and benefits.
Here, we look at the different elements of secured cards vs. unsecured cards, both good and bad:
|Secured credit cards||Unsecured credit cards|
|Refundable deposit required||No deposit required|
|Build credit||Build credit|
|Lower credit limit||More robust credit limit|
|Some rewards possible||Richer rewards|
|Can have tacked-on fees||Might have fewer fees, depending on type|
|Often has annual fee||Some, such as cashback cards, likely won't have annual fee|
For now, a secured card may be best for you, but down the line, an unsecured card could work best. But what can an unsecured card offer? Here we look at some of the better unsecured cards you can look forward to:
|Type of card||Card||Features||Credit required|
|Balance transfer||Chase Slate®||15 months 0% intro APR, purchases & BT (then 16.24% - 24.99% Variable); No BT fee, within first 60 days||Good, Excellent|
|General-purpose travel||Capital One® Venture® Rewards Credit Card||50,000 miles/$3,000 spend in 3 mths; 2X miles for every purchase||Good, excellent|
|Airline||Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®||50,000 miles/$2,500 spend in 3 mths; free checked bag for you and up to 4 companions on same reservation; preferred boarding||Good, excellent|
|Hotel||Hilton Honors Ascend Card from American Express||75,000 pts/$2,000 spend in 3 mths; 25,000 pts/$1,000 spend in 6 mths; weekend night reward every calendar yr/$15,000 spend. Terms Apply||Good, excellent|
|Cash back||Discover it® Cashback Match™||Enroll quarterly to earn 5% back on up to $1,500 in purchases made in rotating categories throughout the year; cash back match at end of first yr||Good, Excellent|
Unsecured cards often come in the form of a rewards card, one of the favorite types of cards for consumers (more on that later).
There are airline cards, general purpose products, hotel cards – all of these can deliver benefits that make upgrading your card worthwhile.
By upgrading to an unsecured card, you also have access to excellent balance transfer cards, luxury cards, and other products just not available as secured cards.
So, what's your first step? It all has to do with your determination to improve your credit, thereby improving to a better card. Here is what you need to do to improve to an unsecured card:
While secured cards are one of the top card types (as you can see below), we are all striving to get a rewards card or airline card, right? With a rewards card, you can earn tens of thousands of points or miles a year or hundreds of dollars back just by taking full advantage of the card's offers.
Here are the top cards consumers have in their wallets, which can give you motivation to keep working on your credit building:
One of the biggest advantages of having a credit card is convenience, and having a secured card is no exception.
When you travel, it can be difficult to rent a car or hotel room without a credit card (although hotels will sometimes accept debit cards, cash or traveler's checks), because most rental car companies and hotels want identification and a credit card. A secured card can help with that.
Heads up, however, that it's a good idea to keep your balance low and to not spend a lot on the card while traveling, because rental car companies and hotels will often put a hold on the card.
Also, because secured cards usually have low available credit, particularly when you first get it, rental cars and hotel rooms can add up quickly. And you don't want to go over your limit, because you can be fined and even lose your card.
While the person at the counter may not know the amount that will be put on hold, the industry standard is typically $50 to $200 a day. You will see it under your "pending" charges until the end of the visit and the card issuer has paid the vendor for the visit.
There are a couple of reasons for the hold: a) to make sure incidentals such as room service and restaurant charges are paid for; and b) to ensure you don't trash the room. The more expensive the room, the higher the hold.
While you ultimately aren't charged for the hold, you lose the ability to charge that amount on other things. For example, if you have available credit of $500 and a hotel puts a $400 hold on the card, then you temporarily only have $100 available credit. It takes as much as a week for the hold to clear, and the quickest way to make that happen is to pay the bill.
To lessen your anxiety and put yourself in the driver's seat, consider signing up for alerts. This way, you can know when the hold is place and when it is removed.
As you know by now, secured cards are best for credit building. Building rewards and convenience come later. As long as your primary card is a secured card, though, you'll want to follow a few basic financial rules:
|Card||Best For:||Minimum Deposit Required||Annual Fee|
|Capital One® Secured Mastercard®||Building credit||$49, $99, or $200||$0|
|Discover it® Secured Card||Cash back||$200||$0|
|OpenSky® Secured Visa® Credit Card||No credit check||$200||$35|
|First Progress Platinum Prestige MasterCard® Secured Credit Card||Low interest||$200 - $2,000||$49|
|primor® Secured Visa® Gold Card||Easy application||$200||$49|
|USAA Secured Card® Platinum Visa®||Military members||$250||$35|
* The information for the BankAmericard Secured Card has been collected independently by CreditCards.com. The card details on this page have not been reviewed or provided by Bank of America.
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