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Comparing Secured Credit Card Offers
Updated: January 11, 2019
If your credit isn't its best or you are new to credit, your options can be limited. In fact, the New York Federal Reserve reports that in October 2018, 21.2% consumers were rejected when applying for credit cards, up from 15.7% a year ago. 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.
At a Glance: Best Secured Credit Cards of 2019
|Card||Best For:||Minimum Deposit Required||Annual Fee|
|Discover it® Secured||Cash back||$200||$0|
|Citi® Secured Mastercard®||No annual fee||$200||$0|
|Capital One® Secured Mastercard®||Building credit||$49, $99, or $200||$0|
|OpenSky® Secured Visa® Credit Card||No credit check||$200||$35|
|First Progress Platinum Prestige MasterCard® Secured Credit Card||Fully refundable deposit||$200 - $2,000||$49|
|Green Dot primor® Visa® Classic Secured Credit Card||Easy application||$200||$39|
|Self Lender — Credit Builder Account||No hard credit pull||See Terms||See Terms|
|First Progress Platinum Elite MasterCard® Secured Credit Card||Low APR||$200 - $2,000||$29|
|The Secured Visa® from Merrick Bank||No credit history required||$200||$36|
|First PREMIER® Bank Secured Credit Card||Flexible credit limit||See Terms||See Terms|
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
Editor's notes on the best secured cards
Discover it® Secured
Just wow. Earn 2% back at gas stations and restaurants for up to $1,000 spend each quarter, and earn double your cash back at the end of your first year. That means with the tiered categories, you can earn $80 for the year plus another $80 at the end of your first year.
There's a lot to love about this card, but the regular APR is not one of them. Higher than the average APR for bad credit, which is 24.96%, the Discover it Secured's variable APR is one of the highest among secured cards.
With no annual fee and rewards to boot, this secured product offers another reason why it's a good card for the long haul – you have the opportunity to upgrade to an unsecured card after 8 months. That's well before the end of 2019, so you can build up your credit, then transition to an unsecured card in less than a year.
From our expert
"The Discover it Secured card is noteworthy because it offers rewards – a rarity among secured cards," says CreditCards.com Industry Analyst Ted Rossman. "With no annual fee and 2% cash back at restaurants and gas stations and 1% everywhere else, this card is a compelling introduction into the world of credit."
Citi® Secured Mastercard®
This card's travel and shopping benefits run the gamut, from extended warranty and price protection to auto rental insurance and travel accident insurance.
No rewards and a high regular APR may give the savvy consumer pause.
Although there are no rewards with the Citi Secured Mastercard, there's also no annual fee. Since a secured card should be paid in full each month, the high APR may not be a deal-breaker.
Capital One® Secured Mastercard®
This card's no annual fee and no foreign transaction fee make it a great starter card.
The Capital One Secured Mastercard offers no sign-up bonus or ongoing rewards, although that's not unusual for a secured card.
Even without rewards, this card is a good long-term card, because you can graduate after 5 months to a higher credit limit without a higher refundable deposit, provided you have been paying on time.
OpenSky® Secured Visa® Credit Card
No credit check is required with the OpenSky Secured Visa, which is a rarity for credit cards.
There's an annual fee, as well as fees for foreign transactions, inactivity and garnishment.
While there are no rewards on this card, the fees aren't endless, as they can be with a credit-builder card.
First Progress Platinum Prestige Mastercard® Secured Credit Card
In addition to the requisite features of a card for credit building, this card also offers auto rental insurance and price protection, items more commonly affiliated with rewards cards.
No rewards, annual fee, foreign transaction fee – this First Progress product isn't oozing with pluses.
No minimum credit score is required, making the First Progress Platinum Prestige Mastercard Secured Credit Card a good choice for someone not sure about acceptance. The fees aren't endless like some secured cards, and you can get a credit limit of up to $2,000.
Green Dot primor® Visa® Classic Secured Credit Card
This card welcomes the consumer whose credit is in bad shape, something you may not see elsewhere. Credit lines can be up to $5,000, and there's a low fixed APR of 9.99%.
This card's fees can nickel and dime you if you aren't careful – in addition to an annual fee, there's a replacement card fee, copying charges, credit limit increase fee and the list goes on.
If your credit is particularly poor or you have none, the Green Dot primor Visa Gold Secured is a solid option, because it has no minimum credit requirement, although the fees can quickly overwhelm, if you don't pay attention.
Self Lender – Credit Builder Account
This is a good way to build credit for someone with iffy credit.
There's an "administrative fee" that is on a sliding scale, depending on how much you pay into your "account." So, if you pay $89 a month for 12 months, you pay a $12 administrative fee and you get $1,000 at the end of the year, $68 shy of what you've put in, bringing the total finance charge to $80.
There's no hard pull on your credit, and it doesn't matter where your credit is when you begin, although the finance charge is hefty.
First Progress Platinum Elite Mastercard® Secured Credit Card
This card has a new expedited processing option, which is handy if you are looking to get your new card quickly. Also, the First Progress Platinum Elite Mastercard Secured Credit Card doesn't require a minimum score or credit history.
While not as bad as others, this card's fees can be onerous.
As a serviceable secured card with fees that aren't as bad as some others, this product may be a good choice.
The Secured Visa® from Merrick Bank
The fees on this card are pretty straightforward, and after the first year, cardholders are regularly reviewed for a credit line increase without the need of an additional deposit.
With an annual fee of $36, you can do better with the Discover it Secured or the Capital One Secured, both of which have no annual fee.
This option doesn't offer much in terms of additional benefits, but for those that are looking for an uncomplicated secured card with credit line flexibility, Merrick's secured option is definitely worth a look.
First PREMIER® Bank Secured Credit Card
This card boasts a very prompt 30 second turnaround time between submitting an application and receiving a response. Additionally, those with no credit history are welcome to apply.
It's a credit-builder card, not a rewards card – it is up to the task of helping you with your credit, but you won't earn rewards with it.
This card is a viable option for anyone with a limited credit history and is looking to quickly receive an application response.
What is a secured card and how do they work?
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:
What is a secured card?
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. Because having a credit card is the easiest and fastest way to build credit, a secured card can be worth your while.
How do secured cards work?
- What it is. A secured card is a credit card that requires a refundable deposit in exchange for a credit limit, typically $200 or more. Most credit cards are unsecured credit cards, which means a security deposit isn't required.
- What to watch for. Even if a secured card has no annual fee, you'll need to check for other kinds of fees, including late fees and returned payment fees.
- How to get approved. Check your credit score and the bank's requirements to make sure you are likely to be approved.
- What to do first. If you are approved, you'll be required to pay the refundable deposit. Then, you'll be approved for a credit limit, typically starting at $200.
- How to use it. Even if your credit limit is $500, that doesn't mean you should spend it. If you carry a balance of $250, that means your utilization ratio is 50% -- you want your ratio to be as close to zero as possible, for credit-building purposes. Also, you need to pay on time each month, again to ensure you are building your credit.
- Rinse and repeat. Check your credit score after several months and see if you qualify for a better card. Some cards, such as the Capital One Secured Mastercard, increase your credit limit after several months of on-time payments. For good measure, check your credit reports, as well, looking for errors or mistakes that need to be corrected.
How do you use a secured card?
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, American Express 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. This is perfect for traveling you need to do in 2019.
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.
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.
Do secured cards really help your credit?
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 use their credit card to build credit, while 31% use the card to build their credit limit – both great reasons for getting a secured card. Experian polled consumers to find out what were their primary ways to use their card. As you can see, building your credit and improving your credit limit were 2 of the reasons:
Primary reasons for credit cards...
- Purchase things I need
- Earn reward points
- Provide an emergency cushion
- Build my credit
- Improve my credit limit
- Provide extra money for things I want
- Pay off other debt
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.
How much is a typical deposit on a secured credit card?
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:
Typical secured card deposits...
|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||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|
How to get a secured card
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:
- Check your credit report. Review your credit reports for inaccuracies and get them corrected. Also, fix any unpaid charges so that they don't continue to build bad habits on your reports each month. Go to AnnualCreditReport.com for free reports from the 3 credit bureaus. Make 2019 your year for checking your credit reports regularly.
- Check your credit score. Before you apply for a credit card, check your credit score so you know what you qualify for. You can get your score for about $20 each through MyFICO.com.
- Check for surprise fees. You can quickly incur add-on fees through a starter card. Charges can be in embedded in the text of the rates and fees notice, so read carefully.
- Be honest. Don't lie on your application, because if caught, that's a sure-fire way to lose your account.
- Apply for one card at a time. Avoid applying for multiple cards at once. Each time you apply, your score takes a little hit, whether you get the card or not.
Things to consider when comparing secured cards
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.
Cards with most fees...
- 11 fees
- BankAmericard Secured Card*
- 10 fees
- PNC Points Visa
...and cards with least fees...
- 1 fee
- Pentagon Federal Credit Union Promise Visa
- 2 fees
- Sam's Club Mastercard
- 2 fees
- Capital One Secured Mastercard
Source: Creditcards.com fees survey
While BankAmericard Secured Card*, for example, has the most fees, with 11, the Capital One Secured Mastercard has among the fewest, with only 2, according to our research. So, it's worth your while to research.
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.
Types of credit cards to avoid when building credit
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. Here are things you should watch out for, particularly with a secured card:
- Watch out for hidden fees. While some fees are clearly marked in the "Schumer Box" at the top of cards' rates and fees disclosures, lesser known fees with credit-builder cards can be mentioned lower in the copy. They can have vague descriptions, such as "copy fee" or "telephone payment fee," and can pile up fast.
- Is the interest rate high? If you plan to carry a balance, you'll want to avoid a card with high interest rates because the interest charges can pretty quickly overtake the principal when the rates are high.
- Don't become enamored with rewards. When you are trying to build credit, you want to pick a card with few fees and such features as an increase in available credit if your credit score increases, as in the case of Capital One Secured Mastercard. Rewards should not be a priority right now, because you are not going to be using the card for big charges. That said, think about how you might use the card down the line, because while you may not use a card's rewards today, they may be advantageous a year from now.
Secured cards vs. unsecured cards
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 cards vs. unsecured cards...
|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|
Here, we look at some of the better unsecured cards you can look forward to:
Types of unsecured cards...
|Type of card||Card||Features||Credit required|
|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|
|Hotel||Hilton Honors Ascend Card from American Express||125,000 pts/$2,000 spend in 3 mths; weekend night reward every calendar yr/$15,000 spend. Terms Apply||Good, excellent|
|Cash back||Discover it® Cash Back||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|
How to improve to an unsecured card
Unsecured cards often come in the form of a rewards card, one of the favorite types of cards for consumers. 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. With on-time payments and low balances, you will improve your score in no time.
Once your credit score is in a good place (at least 700 on a scale of 300-850), it's time to think about what to do next. Note that some cards, such as the Discover it Secured card, lets you transition to an unsecured card after a period of time, provided your payment habits are good. Check with your card issuer.
Or ask if you can trade up, allowing you to keep your secured card's good credit history, but enjoy the benefits of an unsecured card. Heads up that you likely won't be able to benefit from the new card as a new member, meaning you may not get such pluses as the sign-up bonus. However, you will benefit from any ongoing rewards that the new card offers.
If you don't qualify for an upgrade or there is a disadvantage to the new card, such as an annual fee you don't relish paying, hang up and start doing your research – it's time to look at cards that best suit your lifestyle.
Once you find the unsecured card of your dreams, it's time to look at whether to keep the secured card. However, only close it if there is a compelling reason, such as recurring fees that you want to break away from. Be mindful that when you close a card account, while your good payment habits don't drop off your credit reports for 10 years, the average age of your cards will go down.
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:
The credit cards in our wallets...
- Retail store-specific card
- Other types of rewards cards
- Secured card
- Balance transfer card
- Airline-specific card
- Business/corporate card
- Student card
How to use your secured credit card wisely
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:
- Pay on time. While it takes months to build your credit with good payment habits, one or two late payments can cause a big drop in your score. And not only is paying on time good for your credit, it keeps you from having to pay late fees and higher interest charges, and even losing your card.
- Pay in full. In fact, pay multiple times a month to keep your utilization ratio low – because you don't know when your issuer will send your account information to the 3 major credit bureaus.
- Use for credit building. Don't use the card to carry a balance. In general, carrying a balance is not advisable with any credit card, but with a secured card, the stakes are even higher. That's because your available credit is so low.
- Place a small charge on the card. Don't forget to use the card each month. If you lose your card to inactivity, you can't build credit month by month. Put a recurring reminder on your calendar to ensure that you don't forget.
- Make a budget. Once your available credit has increased, and you can use your card for convenience, create a budget that outlines your monthly expenditures for both your checking account and your card. Review the budget each month to make sure you are staying on track and are able to pay in full each month.
* 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.
Laura is an editor and writer at CreditCards.com. She has written extensively on all things credit cards and works to bring you the most up-to-date analysis and advice. Laura's work has been cited in such publications as the New York Times and Associated Press. You can reach her by e-mail at firstname.lastname@example.org and on Twitter @creditcards_lm.
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