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Even if you have no credit history or a low credit score, a credit card might be more attainable than you think. A secured credit card could be yours with a one-time deposit of as little as $49. You might also be able to get a secured card by starting and successfully managing a credit-building account. Check out our recommendations for the best secured credit cards from our partners and start building credit today.
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BEST FOR CUSTOMIZABLE REWARDS
U.S. Bank Cash+® Visa Signature® Card
Reward rate
5
5% cash back on your first $2,000 in eligible net purchases each quarter on the combined two categories you choose.
3
5% cash back on prepaid air, hotel and car reservations booked directly in the Rewards Travel Center.
-1
1% cash back on all other eligible purchases.
1
1% cash back on all other eligible purchases.
Intro offer
$200 bonus
Annual fee
$0
Regular APR
16.74% - 26.74% (Variable)
Recommended credit
Good to Excellent (670 - 850)
The U.S. Bank Cash+® Visa Signature® Card is packed full of bonus rewards categories. It will take more than a little effort to track them all, but people who don’t mind strategizing to earn high rewards for all their purchases will enjoy having this card in their collection.
Pros
- Multiple rotating and fixed bonus categories, which can make it easier to earn rewards quickly
- The $200 sign-up bonus (after spending $1,000 within the first 120 days of account opening) increases the card’s first-year value
Cons
- The $2,000 combined spending cap each quarter for your chosen 5% categories limits your ability to rake in rewards
- Having to track and enroll in rotating categories can be a hassle for some
- New! $200 bonus after spending $1,000 in eligible purchases within the first 120 days of account opening.
- 5% cash back on your first $2,000 in combined eligible purchases each quarter on two categories you choose
- 5% cash back on prepaid air, hotel and car reservations booked directly in the Rewards Travel Center
- 2% cash back on one everyday category, like Gas Stations/EV Charging Stations, Grocery Stores or Restaurants
- 1% cash back on all other eligible purchases
- 0% Intro APR on purchases and balance transfers for the first 15 billing cycles. After that, a variable APR currently 16.74% – 26.74%
- No Annual Fee
- Pay over time by splitting eligible purchases of $100+ into equal monthly payments with U.S. Bank ExtendPay™ Plan.
- Terms and conditions apply.
ADDITIONAL FEATURES
Purchase intro APR
0% Intro APR on purchases for the first 15 billing cycles.
Balance transfer intro APR
0% Intro APR on balance transfers for the first 15 billing cycles.
BEST FOR PERSONAL LOAN ALTERNATIVE
Upgrade Cash Rewards Elite Visa®
Reward rate
2.2
Earn 2.2% unlimited cash back on card purchases every time you make a payment
Intro offer
$200
Annual fee
$0
Regular APR
8.99% - 29.99% (Variable)
Recommended credit
Good to Excellent (670 - 850)
If you value having an incentive for making your credit card payments, you will find a lot to love with this card option. You’ll earn a competitive rate of 2.2 percent cash back on your purchases each time you make a payment. The card is also fairly affordable, skipping the annual fee, foreign transaction fees and many other common maintenance fees.
Pros
- You won’t need to use your reward earnings to offset any maintenance fees.
- You’ll earn a bonus after you open a Rewards Checking account and make three purchases with the card in your first 60 days.
Cons
- The high end APR range is well above average. That could prove costly if you don’t have the credit needed to qualify for the lower range and you end up carrying a balance.
- You won’t get a break on interest if you carry a balance since there are no intro APR offers on purchases or balance transfers.
- $200 bonus on your Upgrade Card after opening a Rewards Checking account and making 3 debit card transactions within 60 days.*
- New Feature: Pay your balance in full early each month and avoid interest with EarlyPay.
- Earn 2.2% unlimited cash back on card purchases every time you make a payment
- See if you qualify in seconds with no impact to your credit score
- No Fees – $0 annual fees, $0 activation fees, $0 maintenance fees
- Combine the flexibility of a card with the low cost and predictability of a loan
- Access to a virtual card, so you can start earning while you wait for your card to arrive in the mail.
- Contactless payments with Apple Pay® and Google Pay™
- Mobile app to access your account anytime, anywhere
- Enjoy peace of mind with $0 Fraud liability
- *To qualify for the $200 welcome bonus, you must open and fund a new Upgrade Rewards Checking Account and make 3 debit card transactions within 60 days of your Upgrade Card account opening. The bonus credit will be posted to your Upgrade Card as a rewards credit within 1-2 billing periods following the third debit transaction on your Rewards Checking account. Your Upgrade Card must be in good standing to receive the bonus.
ADDITIONAL FEATURES
Purchase intro APR
N/A
Balance transfer intro APR
N/A
BEST FOR GAS
Blue Cash Everyday® Card from American Express
Reward rate
3
3% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases, then 1%.
1
New! 3% Cash Back on U.S. online retail purchases, on up to $6,000 per year, then 1%.
-1
1% Cash Back on other purchases.
1
1% Cash Back on other purchases.
Intro offer
$200
Annual fee
$0
Regular APR
16.24%-27.24% Variable
Recommended credit
Good to Excellent (670 - 850)
This card’s terrific mix of practical bonus categories make it a smart standalone option for earning rewards on everyday spending. Along with its impressive cash back rate at U.S. gas stations and U.S. supermarkets, it carries a top-tier rate on U.S. online retail purchases, a hard-to-find bonus category that gives the card an extra layer of versatility.
Pros
- It carries one of the best combined cash back rates available at no annual fee at U.S. gas stations and U.S. supermarkets. Those two categories make up a big chunk of the average person’s budget.
- You can earn $7 back per month on The Disney Bundle streaming package, which includes Disney+, Hulu, and ESPN+ (each month you spend $13.99 or more on an eligible subscription, terms apply). To earn that much back in a month via the card’s 3 percent categories, you’d typically need to spend over $230.
Cons
- You’ll only earn 3 percent cash back on your first $6,000 in annual spending in each of the card’s bonus categories (then 1 percent). While that’s a high limit, it could hold you back if you’re sharing an account across multiple households.
- The card carries a 2.7 percent foreign transaction fee, so it’s not a good option if you’re looking for a single rewards card you can use at home and abroad.
- Earn a $200 statement credit after you spend $2,000 in purchases on your new Card within the first 6 months.
- No Annual Fee.
- Balance Transfer is back! Enjoy 0% intro APR on purchases and balance transfers for 15 months from the date of account opening. After that, 16.24% to 27.24% variable APR.
- 3% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases, then 1%.
- New! 3% Cash Back on U.S. online retail purchases, on up to $6,000 per year, then 1%.
- 3% Cash Back at U.S. gas stations, on up to $6,000 per year, then 1%.
- Get $7 back each month after using your Blue Cash Everyday® Card to spend $13.99 or more each month on an eligible subscription to The Disney Bundle, which includes Disney+, Hulu, and ESPN+. Enrollment required.
- Terms Apply.
ADDITIONAL FEATURES
Purchase intro APR
0% on purchases for 15 months
Balance transfer intro APR
0% on balance transfers for 15 months
BEST FOR GROCERIES
Blue Cash Preferred® Card from American Express
Reward rate
6
6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
1
6% Cash Back on select U.S. streaming subscriptions.
3
3% Cash Back at U.S. gas stations
0
3% Cash Back at U.S. gas stations
1
1% Cash Back on other purchases
Intro offer
$350
Annual fee
$95
Regular APR
16.24%-26.24% Variable
Recommended credit
Good to Excellent (670 - 850)
With generous rewards rates in family-friendly categories including purchases at U.S. supermarkets and U.S. gas stations, on-the-go families will have a hard time finding a more rewarding credit card.
Pros
- The base reward program is uber-lucrative, making this card a good choice for people looking for long-term value.
- You don’t have to keep track of rotating spending categories or enrollment deadlines.
Cons
- There is no intro APR offer on balance transfers.
- You won’t earn the extra rewards for grocery shopping at major superstores and wholesale clubs, as those don’t count as U.S. supermarkets.
- Earn a $350 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
- Buy Now, Pay Later: Enjoy $0 intro plan fees when you use Plan It® to split up large purchases into monthly installments. Pay $0 plan fees on plans created during the first 12 months after account opening. Plans created after that will have a fixed monthly plan fee up to 1.33% of each purchase amount moved into a plan based on the plan duration, the APR that would otherwise apply to the purchase, and other factors.
- Low intro APR: 0% intro APR for 12 months on purchases from the date of account opening, then a variable rate, 16.24% to 26.24%.
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
- 6% Cash Back on select U.S. streaming subscriptions.
- 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
- 1% Cash Back on other purchases.
- Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- $95 Annual Fee.
- Terms Apply.
ADDITIONAL FEATURES
Purchase intro APR
0% on purchases for 12 months
Balance transfer intro APR
N/A
BEST FOR ROTATING CASH BACK CATEGORIES
Discover it® Cash Back
Reward rate
5
Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate.
1
Plus, earn unlimited 1% cash back on all other purchases – automatically.
Intro offer
Cashback Match™
Annual fee
$0
Regular APR
13.49% - 24.49% Variable
Recommended credit
Good to Excellent (670 - 850)
The Discover it Cash Back is a popular choice for cash back rewards because of the rotating bonus categories. It’s an exciting way to earn cash back quarter by quarter and all year-round without committing to a set rewards category.
Pros
- Discover will match the cash back you earn at the end of the first year.
- There are a few cash back redemption options, including credit to your account and donations.
Cons
- You must enroll to take advantage of the bonus categories each quarter.
- There is a spending limit on your highest cash back category each quarter ($1,500 in combined purchases per quarter).
- Intro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
- Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- New! Discover helps remove your personal information from select people-search websites. Activate by mobile app for free.
- Every $1 you earn in cash back is $1 you can redeem.
- New Intro APR: Get a 0% intro APR for 15 months on purchases. Then 13.49% to 24.49% Standard Variable Purchase APR applies, based on credit worthiness.
- No annual fee.
ADDITIONAL FEATURES
Purchase intro APR
0% for 15 months
Balance transfer intro APR
0% for 15 months
BEST FOR UP TO 2% CASH BACK
Citi® Double Cash Card
Reward rate
2
Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
Intro offer
$200 Cash Back
Annual fee
$0
Regular APR
16.24% - 26.24% (Variable)
Recommended credit
Good to Excellent (670 - 850)
If you make your payments on time each month, it’ll be tough to find a better cash back card than the Citi Double Cash Card. With healthy financial habits, this card effectively becomes a 2 percent flat-rate cash back card (1 percent when you make purchases and another 1 percent when you pay your bill), a rare find in the cash back market.
Pros
- You can convert your cash back earnings to Citi ThankYou points when paired with a card like the Citi Premier® Card, which can be redeemed for travel, gift cards and more.
- There are no spending category restrictions or rotating categories
Cons
- Your rewards can expire with this card if you don’t use it for a year.
- The sign-up bonus spending requirement is higher than you’ll find on many no-annual-fee cash back cards.
- Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.
- For a limited time, earn $200 cash back after spending $1,500 on purchases in the first 6 months of account opening.
- Balance Transfer Only Offer: 0% intro APR on Balance Transfers for 18 months. After that, the variable APR will be 16.24% – 26.24%, based on your creditworthiness.
- Balance Transfers do not earn cash back. Intro APR does not apply to purchases.
- If you transfer a balance, interest will be charged on your purchases unless you pay your entire balance (including balance transfers) by the due date each month.
- There is an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5).
ADDITIONAL FEATURES
Purchase intro APR
N/A
Balance transfer intro APR
0% intro for 18 months on Balance Transfers
A closer look at our best secured credit cards
Capital One Platinum Secured Credit Card: Best secured card for building credit
- What we love about the Capital One Platinum Secured: With this card, you can start with a refundable security deposit of either $49, $99 or $200, but your initial credit limit will be at least $200 no matter what you put down. After demonstrating responsible habits, Capital One may automatically increase your credit limit in as little as six months.
- Who this card is good for: Credit newbies and people who need to rebuild their credit with an affordable card that streamlines the focus on credit building.
- Alternatives: If rewards are something you’re after, even among secured cards, the Discover it Secured offers some of the most competitive rewards rates among secured credit cards. Just keep in mind that you’ll be required to put down at least a $200 security deposit on the Discover it, a larger up front cost than what’s required with the Capital One Platinum Secured.
Read our full Capital One Platinum Secured Credit Card review or jump back to offer details.
Capital One Quicksilver Secured Cash Rewards Credit Card: Best secured card for flat-rate rewards
- What we love about the Capital One Quicksilver Secured: Few secured credit cards offer rewards and many of the ones that do impose caps on earnings, so this card’s offer of unlimited 1.5 percent cash back on every purchase is truly noteworthy.
- Who this card is good for: Credit builders seeking out hassle-free rewards as they work to build better credit.
- Alternatives: Few secured cards on the market offer rewards, the Quicksilver Secured is already a step ahead of a lot of secured card options. If you’re willing to forego rewards in exchange for a slightly lower APR, which could save you a bit on interest if you ever have to carry a balance, the Citi Secured Mastercard has a slightly more palatable variable APR alongside not charging a monthly maintenance fee.
Read our full Capital One Platinum Secured Credit Card review or jump back to offer details.
Discover it Secured Credit Card: Best secured card with rewards
- What we love about the Discover it Secured: The cash back rewards opportunity this card provides is pretty much unheard of even among the best secured credit cards. Plus, Discover will match all of the cash back you’ve earned at the end of your first year.
- Who this card is good for: Rewards seekers and credit builders alike who don’t want to sacrifice earning opportunities because they are building or rebuilding credit.
- Alternatives: The Petal® 2 “Cash Back, No Fees” Visa® Credit Card may be an option to look into, as it’s recommended for people with little to no credit history and offers a competitive rewards rate while incentivizing good credit habits. Plus, this card is unsecured so you won’t need to worry about a security deposit at all
Read our full Discover it Secured Credit Card review or jump back to offer details.
Self – Credit Builder Account with Secured Visa Credit Card: Best secured card for building credit with savings
- What we love about the Self — Credit Builder Account + Secured Visa Card: The savings account and credit card combination is a unique pairing in the first place. You can also begin building your credit score before ever obtaining a card with this set up.
- Who this card is good for: Savvy savers and credit builders interested in building up savings, establishing a credit mix and working on their credit score all at once.
- Alternatives: As unique as this card and savings account combo is, it can get a bit complicated when it comes to managing the tool. The Capital One Quicksilver Secured card offers low-maintenance flat-rate rewards and skips the annual fee, so you won’t have to foot the bill for much outside of your security deposit.
Read our Self – Credit Builder Account with Secured Visa Credit Card review or jump back to offer details.
OpenSky Secured Visa Credit Card: Best secured card for no minimum credit score requirement
- What we love about the OpenSky Secured Visa: This card doesn’t even require a checking account to open, furthering the lenient approval process. You also set your own credit limit with whatever you submit as a deposit and you can put down up to $3,000.
- Who this card is good for: Credit-building self-starters who want to be in charge of setting their own credit limit and who don’t mind putting a little more investment in their journey in exchange for more lenient approvals.
- Alternatives: The greatest drawback of this card is its $35 annual fee on top of whatever you put down as a security deposit. The Petal® 1 “No Annual Fee” Visa® Credit Card is unsecured so you won’t need to put down a security deposit to get the card. It also has no annual fee and is recommended for people who have little or no credit history.
Read our full OpenSky Secured Visa Credit Card review or jump back to offer details.
Citi Secured Mastercard: Best secured card for no monthly maintenance fee
- What we love about the Citi Secured Mastercard: You’ll get exclusive access to the Citi Entertainment program, where you can find pre-sale and Citi preferred tickets for concerts, events and other fun-filled opportunities.
- Who this card is good for: No-fuss credit-builders who want a well balanced and fairly affordable card to get their credit-building journey started.
- Alternatives: With no annual fee, no rewards program and no welcome offer, the Citi Secured Mastercard places a strict focus on credit building and not much else. If you’re after a bit more incentive for your efforts, the Discover it Secured is the best secured on the market that offers rewards. You’ll also reap the benefits of Discover’s Cashback Match program as your welcome offer and you still won’t have an added annual fee on top of your security deposit.
Read our full Citi Secured Mastercard review or jump back to offer details.
First Progress Platinum Elite Mastercard Secured Credit Card: Best secured card for easy application and processing
- What we love about the First Progress Platinum Elite: In addition to making your application process as smooth as possible, the First Progress reports all of its credit data to all three major credit bureaus so you’ll know you’re giving yourself the best shot at speedy credit growth.
- Who this card is good for: No-fuss credit builders who want to get in, get a card and get started right away with building credit with few questions asked.
- Alternatives: The Capital One Platinum Secured card has no annual fee and your security deposit could be as low as $49. The Capital One Platinum Secured also has a fairly easy path to upgrade to more unsecured options in the Capital One card portfolio, which isn’t necessarily the case with the First Progress Platinum Elite.
Read our full First Progress Platinum Elite Mastercard Secured Credit Card review or jump back to offer details.
First Progress Platinum Prestige Mastercard Secured Credit Card: Best secured card for no required credit check
- What we love about the First Progress Platinum Elite: In addition to making your application process as smooth as possible, the First Progress reports all of its credit data to all three major credit bureaus so you’ll know you’re giving yourself the best shot at speedy credit growth.
- Who this card is good for: No-fuss credit builders who want to get in, get a card and get started right away with building credit with few questions asked.
- Alternatives: The Capital One Platinum Secured card has no annual fee and your security deposit could be as low as $49. The Capital One Platinum Secured also has a fairly easy path to upgrade to more unsecured options in the Capital One card portfolio, which isn’t necessarily the case with the First Progress Platinum Elite.
Read our full First Progress Platinum Prestige Mastercard Secured Credit Card review or jump back to offer details.
What is a secured credit card?
A secured credit card is a type of card backed by collateral, usually in the form of a deposit from the cardholder. This deposit often serves as your credit limit. The typical consumer who gets a secured card has no credit history or a low credit score, but the deposit makes a secured card easier to qualify for. You might have an opportunity to upgrade to an unsecured card with no deposit if you use the secured card responsibly.
Who should get a secured credit card?
Getting a secured card can be an excellent path to take on the journey to a good credit score. Their relaxed application requirements make them a great fit for many types of people looking to build or repair their credit:
While the majority of credit cards don’t accept cardholders with no credit history, most secured cards will accept true credit beginners. By opening a secured credit card account, you have a chance to establish a history of responsible spending and timely payments. Sound credit habits make it easier to eventually enjoy the benefits that come with a good credit score.
If you’ve opened a line of credit previously but haven’t had success in improving your score, a secured credit card could help. Credit cards in general can provide a useful way to build a credit score when they’re used responsibly. Plus, secured cards often come with free access to your credit score online, report your payment activity to major credit bureaus and feature other credit-building perks.
Anyone who has had to deal with debt, bankruptcy or anything else that undermines a credit score could take advantage of a secured credit card. Some secured cards don’t require a credit check or a minimum score to apply, making them among the most accessible options available.
Still unsure if a secured credit card is right for you? Check out our Credit Card Spender Type Tool where you can get personalized credit card recommendations based on your credit score, spending habits and daily needs.
Who should skip a secured credit card?
If you’ve been building up your credit for awhile, odds are you have aged out of the secured credit card pool. Most secure credit cards have high APRs and security deposit requirements, which could cost a fair amount over time, especially if you have to carry balances. There are plenty of cards available for people with fair, good and excellent credit that may be more cost effective and have more lucrative and helpful benefits specifically for you and your credit tier.
If you have good and excellent credit, you have eligibility for some of the best credit cards on the market. Secured credit cards are designed for people who have little or no credit history or for people who are rebuilding a bad credit score and may have a harder time getting approved for top cards. Credit cards for good and excellent credit have the highest reward rates, lucrative welcome offers and up to hundreds of dollars worth of credits, protections and more that you’ll have much easier access to with these high credit scores.
There is an entire portfolio of student credit cards that are intentionally geared toward this specific demographic. Student cards often have perks and rewards that explicitly benefit students and can be a bit more valuable than your average secured credit card. Unlike secured credit options, student credit cards very often offer rewards on student-centric purchases and spending categories. Also, students may have difficulty fitting small annual fees and security deposits into a student budget, and most student credit cards skip out on these added costs.
How to choose the best secured credit card
If you’re looking for a secured credit card, it’s important to remember what they’re for: building or repairing credit. Secured cards won’t come with luxury perks, but with intelligent use, you’ll be on your way to qualifying for premium cards. Here’s what to consider when choosing a secured credit card:
- What are the security deposit requirements? Look for cards that have favorable security deposit minimums and maximums. Higher deposit requirements can make it difficult to open an account if you can’t afford them. Low security deposits for secured cards could limit how you can use the card, especially if your deposit functions as your credit limit. A low deposit can make it harder to have a low credit utilization ratio. It’s best to find a good middle ground, or a card that may give you a larger limit despite a lower deposit.
- Is there a path to upgrade? Secured cards are temporary solutions to help you build credit for future financial goals. Some of the best secured card issuers also have cards for good and excellent credit. When you’ve improved your credit, you can potentially acquire these cards, often without incurring another hard inquiry on your credit report or closing your current account.
- What’s the issuer’s reputation? If you’re searching for a secured credit card, you likely don’t have the best credit score. Some card issuers who market directly to consumers with bad credit charge absurdly high interest rates and exorbitant fees. These companies also typically come with less-than-favorable consumer reviews. Be sure to complete a quick internet search when shopping for card companies so you can find out what other customer experiences have been.
- What are your approval odds? While secured cards are among the easiest to qualify for, that doesn’t mean you’ll be approved for every secured card available. Some secured credit card issuers won’t give cards to consumers with past bankruptcies, high levels of debt or incomes that are too low.
You can use Credit CardMatch™ tool and check out some cards you may be prequalified for to see if they’re a good match for you.
Creditcard's Insight
Getting ahold of your credit report is only half the battle—you also need to know how to interpret it. Check out our guide to reading your credit report to make sure you’re not missing any errors.
How to get a secured credit card
- Look for and utilize prequalified offers. Many cards and issuers will let you know ahead of time (with near-certainty) whether you’ll be approved, so you don’t have to go through the full process or take a hit to your credit. Credit CardMatch feature is an easy way to find a selection of cards you may be prequalified for.
- Make sure you have enough money for the deposit. It could be as low as $49 or as high as a few thousand dollars, depending on the card and the issuer. Some cards require a bank account to pay for the deposit, while others allow payment by check or money order.
- Seek out secured cards that report to at least one of the major credit bureaus. Reports of good payment behavior to Equifax, Experian or TransUnion are essential for building or repairing credit.
How to upgrade to an unsecured card
After using your secured card responsibly for a while, your credit score should start to rise. Progress happens quickly if you keep your balances low and make your payments on time. Once you’ve achieved a good credit score (FICO or VantageScore of 670 or greater), you can think about shopping around for an unsecured card that might offer better rewards programs and lower fees. Here are some steps on how to upgrade to an unsecured card.
- Start by looking for secured cards that also have an unsecured option. Some credit cards have both a secured and unsecured version. If that’s the case with your secured card, you may be able to simply call the customer service line and ask to upgrade for free. Some issuers may even allow you to upgrade to a variety of unsecured cards while keeping the same account. Keep in mind that you may not be eligible for the new card’s sign-up bonus if you’re upgrading from a secured card.
- Apply for an additional card instead of upgrading your existing account. With cards for fair credit and beyond, you have more options to explore credit cards from other issuers this way. However, your credit may take a temporary dip since the new account will decrease your average age of accounts.
- Keep or canel your secured card. If your secured card comes with fees, such as a maintenance or inactivity fee, it may be a good idea to cancel it. Otherwise, there’s no harm in keeping it open for the occasional small purchase to add to the length of your credit history (15 percent of your credit score).
- Get your security deposit back. If you cancel your secured card, you should make sure to get your initial security deposit back. Once the account is closed, it’ll take 30 to 90 days to process, and you will receive it in the form of either a check or statement credit on your unsecured card. If you have not received it in this time frame, contact your issuer.
Creditcard's Insight
Secured credit card providers have different time requirements for graduating to an unsecured card. In any case, you can contact your issuer and request to upgrade your card after you’ve demonstrated good habits. Set the trend for at least 6 months before reaching out for a better card.
Alternatives to secured credit cards
Applying for a secured card is a simple and effective way to build up less-than-ideal credit. However, there are other avenues if you decide against it.
- Become an authorized user. One way to dip a toe into credit building is to become an authorized user on a parent’s or spouse’s card. For parents, this is great for monitoring your child’s purchases. For young adults, this can be a good way to establish credit without the pressure of choosing a credit card. Once you’ve built up your credit, you’ll be more likely to be approved for the best credit cards.
- Get a cosigner for an unsecured credit card. Some credit card issuers will allow you to apply with a cosigner—ideally someone who has good credit and trusts you to use your card responsibly. Though you are the primary cardholder in this situation, the cosigner is also liable for your debts. Like being an authorized user, having a cosigner could give you access to unsecured credit cards that you wouldn’t qualify for with your credit alone.
- Correct any errors on your credit report. Inaccurate information in your credit history can make you a less attractive customer in the eyes of lenders. Make sure that the information on your credit report, a long-term record of how you’ve used credit from the past to the present, is accurate and up-to-date. Contact AnnualCreditReport.com to request a free copy of your credit report from the major credit bureaus: Equifax, Experian and TransUnion.
- Link utility and rent payments. If you have a limited credit history, a so-called “traditional” credit score might not tell the whole story. Newer credit score products put added emphasis on good credit habits such as timely payments on utility bills, rent payments and positive bank account balances. UltraFICO, Experian Boost or similar options benefit people who handle their finances responsibly but don’t have experience with credit cards or loans.
How we chose the best secured credit cards
Every card that Credit Card reviews is evaluated on a 5-star scoring system. If you need a secured credit card, you’re probably focused on establishing or re-establishing credit. Making our choices for cards this category involves putting special attention on factors such as:
Annual fee
A lot of secured credit cards will charge cardholders an annual fee. Our analysis takes into account the overall value offered by the card, through rewards and other perks, against the annual fee to help you find the most value.
Additional fees
Secured cards can sometimes have extra fees that you may not see on other credit cards. We pay close attention to the fine print so we can factor these fees into the overall scores and make sure you’re aware of them beforehand.
Rewards
Some secured cards offer rewards programs, such as cash back. Rewards can be complicated, but we make it simple with a breakdown that clearly shows the real value they offer to cardholders.
Extras and perks
Some cards have extra advantages for cardholders. Introductory offers and credit monitoring are examples of benefits that add to a card’s overall value.
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Frequently asked questions about secured credit cards
With a prepaid debit card, the amount of value on the card is equivalent to the amount you deposit. Unlike a prepaid debit card, which just stores the value of the money you’ve put on the card, a secured card functions like a credit card in that you don’t have to pay the entire balance at the time of purchase.
Although secured cards are among the easiest credit cards to qualify for, not everyone will make the cut. Your application for a secured credit card might be denied if you have serious problems with your credit history, such as bankruptcy. Fortunately, some credit cards don’t automatically disqualify you for having a bankruptcy on your credit report.
If you upgrade to a new card with the same issuer or close out a secured card that doesn’t have any outstanding charges, you’ll probably qualify to have your deposit fully refunded. Check the issuer’s terms and conditions to confirm the refund policy.
The cost of your security deposit depends on your financial situation, card requirements and often how much money you can comfortably spare. If you have no credit history or a low credit score, making the minimum required deposit would probably be the wise move.
Keep in mind that your deposit will typically serve as your initial credit limit. Those who’ve had trouble making their credit card payments in the past should consider giving themselves a low ceiling.
With a secured credit card, your payment history and credit utilization ratio (how much debt you’re carrying vs. how much credit has been extended to you) are reported to the three major credit bureaus. With every on-time payment, you’re building a positive payment history. Keeping your credit utilization ratio under 10 percent is another positive addition to your credit profile. This demonstrates to credit issuers that you can manage credit responsibly.