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A Guide to the Best Secured Credit Cards of 2024
Are you trying to establish your credit profile or rebuild your credit score but can't get approved for a credit card? One way out of this predicament is to get one of the best secured credit cards that help you develop healthy spending habits and improve your score. You can upgrade to an unsecured option in less than a year.
In the meantime, you'll still get to enjoy low fees, introductory APR offers, and even cash back rewards in some cases. You'll get all of this in exchange for a refundable deposit. Read our evaluations to learn more about the cards' mechanisms, general guidelines and the market's top names.
Best Secured Credit Cards of November 2024
OpenSky® Secured Visa® Credit Card
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
OpenSky® Secured Visa® Credit Card
- The OpenSky Visa card is available even to consumers that do not have a formed credit score
- You do not need a bank account in order to make the security deposit, as other methods are also available
- The APR of 25.14% (variable) is considerably lower than with other secured cards
Applied Bank Secured Visa® Gold Preferred® Credit Card
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Applied Bank Secured Visa® Gold Preferred® Credit Card
- This card's credit limit can be increased up to $5,000 by making the appropriate security deposit
- The fixed APR of 9.99% is well below the industry average among secured cards
- There's no hard credit inquiry during application, keeping your credit score intact
Secured Mastercard® from Capital One
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Secured Mastercard® from Capital One
- This card features a flexible deposit policy that allows you to exceed the limit determined by your collateral.
- Capital One's card has a low security deposit ranging from $49 to $200, depending on your credit score.
- There are no foreign transaction and balance transfer fees, and there's no annual membership fee either.
Discover it® Secured
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Discover it® Secured
- The maximum credit line is $2,500 - a more-than-decent amount for a secured card
- There are no annual fees, which is a lifesaver for cash-strapped users
- You get an opportunity to upgrade to an unsecured card after 8 months, if you've been diligent with bill payments
Top Secured Credit Cards for 2024:
- Secured Mastercard from Capital One - Best for low security deposit
- OpenSky Secured Visa Credit Card - Best for no credit check
- Discover it Secured - Best for cash back rewards
- Applied Bank Secured Visa Credit Card - Best for fixed APR
Detailed Reviews of Secured Credit Cards
You can get approved for an OpenSky secured card even if you have poor credit or no credit history at all. It helps up to 99% of customers improve their scores after only six months of on-time payments.
A rare option that doesn't require a hard credit inquiry, the OpenSky® Secured Visa® credit card won't do any damage to your score during the application process. Another great thing about this card is that it doesn't require a traditional bank account - you can fund the deposit and make monthly payments using several alternative banking methods.
Security Deposit, Rates, and Fees
Most similar cards offer a credit line based on your past credit history. OpenSky® Secured Visa® is different in that it lets you set your own credit line. Your initial limit can be anywhere between $200 and $3,000 and is based on the amount you put down as your security deposit.
The APR is 25.14% (variable) for both purchase transactions and cash advances. Note that there isn't a lower intro APR offer. While the regular APR isn't as high as with some of OpenSky's competitors, it's still wise to try and avoid it by making on-time payments.
This option comes with one of the market's lowest annual fees. All users pay a fixed $35 membership fee each year.
Note that you'll also be charged either $6 or 5% of the amount per cash advance, 3% of each foreign transaction (in US dollars), up to $40 each time you make a late payment, and up to $25 for returned payments.
Reasons to Apply for the OpenSky® Secured Visa® Credit Card
Applying for the OpenSky® Secured Visa® credit card couldn't be simpler. Filling out the four-step application form takes only a few minutes. Additionally, you don't need to worry about losing any credit score points as the issuer won't perform a hard inquiry.
This card also streamlines your credit-building journey. Not only does OpenSky report your payment information to the three major credit agencies, but it also provides credit tips and a comprehensive credit education page to support you every step of the way.
For many users, the fact that you don't need to connect your OpenSky® Secured Visa® with a traditional bank account is another considerable advantage. The credit card issuer allows you to fund the security deposit and pay your monthly card bill using alternative payment methods such as money orders and Western Union.
This card also lets you create email alerts and set up recurring payments to ensure that your bills are taken care of in a timely manner.
Reasons to Explore Other Options
If you're sick and tired of getting rejected for a secured card because of your poor (or non-existent) credit score or because you don't have a bank account, this card is an ideal option.
However, if these aren't the challenges you face, we suggest you start applying for cards that don't charge an annual fee and give you an opportunity to upgrade to an unsecured option after several months of on-time payments.
At a Glance
- Relatively low annual fee and APR
- No credit inquiry required
- No bank account necessary
Applied Bank Secured Visa® Gold Preferred® Credit Card Review
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On Official Website
Read In-Depth ReviewThe Applied Bank Secured Visa® Gold Preferred® credit card is a great choice if you just started working on your credit profile or need to improve your standing. It has one of the lowest interest rates among secured cards and doesn't make you undergo a credit check to qualify.
Security Deposit, Rates, and Fees
The minimum initial deposit is $200, while the maximum is $1,000. Note that you can eventually increase your credit limit by making additional cash deposits of up to $5,000.
Another characteristic that makes this card stand out is that it charges a fixed APR of 9.99%, so you don't need to worry about interest rate increases.
The annual percentage rates on the Applied Bank Secured Visa® may be below the market average. However, the list of additional fees that it charges is quite long. There's a $48 annual fee, another $30 for additional cards and card replacements, a $12.95 per-item fee for optional payments, a $30 stop payment fee, and a $50 reinstatement fee.
There's also a 3% foreign transaction fee and a $5 fee or 5% of the amount for cash advances. You should also keep an eye out for late and returned payment fees, each up to $38 per item.
Reasons to Apply for the Applied Bank Secured Visa® Gold Preferred®
The Applied Bank Secured Visa® Gold Preferred® won't subject you to a hard credit inquiry to determine your eligibility. In other words, consumers with all credit scores can apply and don't run the risk of losing any points during the application process.
Another great thing about this credit card is that it reports your account information to the three national credit bureaus. Provided that you use your Applied Bank Secured Visa® responsibly, you'll be able to improve your credit score in less than a year.
Reasons to Explore Other Options
As far as drawbacks go, this card doesn't have a 0% APR introductory offer, a rewards program, or a sign-up bonus. Although such perks usually come with cards designed for consumers with more established credit histories, there are options on our list that include these features.
Customers are also charged a long list of fees on top of the annual membership cost. The APR on this card may be below-average, but the fees can add up.
At a Glance
- Below-average fixed APR
- No hard credit check needed
- Reports to the three national credit bureaus
If you've been on the hunt for a credit card that will help you build or rebuild your credit and one that doesn't include excessive fees, your search is finally over. Praised for its cash deposit flexibility and low fees, the Secured Mastercard® from Capital One truly is one of the better choices for those trying to rebuild their credit.
Its issuer reports your payment information to all three major credit bureaus and gives you an opportunity to increase your credit line after only six months of responsible credit card use.
Security Deposit, Rates, and Fees
The Capital One Secured card stands out thanks to its flexible deposit policy. Unlike most other secured credit cards, your credit limit can exceed the amount that you put down as collateral. To get an initial line of $200, you'll be required to make a minimum security deposit of $49, $99, or $200 (depending on your creditworthiness).
The card is also unique when it comes to fees. The Secured Mastercard from Capital One doesn't have an annual membership, foreign transaction, or balance transfer costs.
However, you'll be charged the standard $10 or 3% of the amount for each cash advance and up to $40 per item when you make a late payment.
There isn't an introductory APR offer, while the interest rate on purchases and balance transfers is 26.99% (variable).
Reasons to Apply for the Secured Mastercard from Capital One
Not only does this card give you an opportunity to qualify for an initial $200 credit line with a refundable deposit of $49 or $99, but it also allows you to split the amount between several monthly installments instead of charging it all at once.
When it comes to payments, you get to pick your own due date and the most suitable method (check, online, or in-branch) for your monthly bill.
It's also important to mention that Capital One reports to the three major credit bureaus and all of its secured cardholders automatically get the chance to increase their credit lines. To be considered, you'll need to make five on-time monthly payments.
The Secured Mastercard® from Capital One also comes with a few additional benefits. These include fraud liability protection, notifications about credit report changes, mobile banking, card lock, and emergency card replacement.
Reasons to Explore Other Options
Although this is a flexible option when it comes to security deposits, one notable drawback is that this card offers relatively low initial credit limits. While the fees are low, the annual percentage rate is quite high, even for a card that accepts low-credit applicants. You should also bear in mind that this card doesn't have a sign-up offer or a rewards program.
At a Glance
- No annual membership or foreign transaction fees
- Credit limits can exceed cash deposit
- Reports to all three major credit bureaus
If your bad credit narrowed your range of credit card options but you still wish to earn rewards on your purchases, the Discover it® Secured may be just what you're looking for.
Thanks to the absence of annual fees and the fact that users can upgrade to an unsecured option after only eight months of responsible use, Discover it® Secured is definitely worth considering.
Security Deposit, Rates, and Fees
The minimum deposit required to activate this Discover card is $200, which is also the minimum credit limit that you can qualify for. When it comes to upper limits, the maximum credit line that you can apply for is $2,500, but bear in mind that you'll be required to put down a deposit to match it.
As a new cardholder, you can make the most of the 10.99% intro APR on balance transfers over a six-month period, starting from the date of your first transfer. After that, your APR will be 22.99% (variable), and you'll be charged the same rate for purchases. Also expect a variable APR of 24.99% for cash advances. Should you fail to make a payment on time, your rate won't increase as there isn't a penalty APR.
Discover doesn't have an annual fee. As for balance transfers, you'll be charged 3% of each transfer during the intro APR period and 5% of the transfer amount after that. There's also a $10 or 5% fee on cash advances. Lastly, late and returned payments will cost you up to $40 per item.
Reasons to Apply for the Discover it® Secured Credit Card
For a secured credit card, the Discover card offers outstanding rewards. Cardholders earn 2% cash back at restaurants and gas stations up to $1,000 in total each quarter. Additionally, you get unlimited 1% cash back on all other spending categories.
The card also offers a unique welcome bonus. After your first anniversary as a cardholder, you'll automatically receive a dollar-for-dollar bonus match on all the cash back that you've accumulated throughout the year.
Another great thing about this credit card is that its issuer doesn't wait longer than eight months to review your account to determine whether you're ready to move up to an unsecured option. Provided that you've made all of your payments on time, you should be able to get your deposit returned and get a regular card.
Reasons to Explore Other Options
First, unlike some of its closest competitors, this card issuer requires a bank account and doesn't let you pay the security deposit in monthly installments.
Second, there are unsecured cards out there that offer the same rewards. Third, the ongoing APR is quite high.
At a Glance
- Cash back rewards and a sign-up bonus
- Opportunity to move on to a secured card after eight months
- Intro APR on balance transfers
How Can Secured Credit Cards Help You Improve Your Credit?
The only difference between regular (unsecured) credit cards and secured ones is that the latter include collateral which usually comes in the form of a cash deposit by the cardholder. The security deposit has two main roles.
First, the card issuer uses the amount you've put down to determine your credit line. Second, if you default on the payment, your card issuer seizes the deposit to cover any losses.
Given the relaxed credit score requirements, secured cards target consumers who have no credit history or need to rebuild their scores and correct the bad financial choices they've made in the past.
In other words, these are the best secured credit cards for no-credit applicants. But be careful not to confuse these with debit cards. With a debit card, you are not buying products and paying for services on credit, but rather withdrawing money from a linked debit account each time you make a transaction. Another important difference is that you can't improve your credit score with a debit card.
The companies behind the best secured credit cards report your payment information to the three most important credit bureaus and set you on a clear path towards rebuilding your credit. However, these excellent reporting practices won't do you any good if you don't use your card responsibly. Remember that making on-time payments is your main responsibility, and the only way to gradually improve your credit score.
Reasons to Apply For a Secured Credit Card:
- Approval rates are high as these cards pose a lower risk to creditors; some secured credit cards have no credit check requirements.
- Low credit lines make overspending almost impossible.
- APRs on secured credit cards are lower than those charged by unsecured cards designed for bad-credit applicants.
- On-time payments and responsible spending give you the opportunity to get your security deposit back and qualify for an unsecured card in less than a year.
Reasons to Avoid Secured Credit Cards:
- A refundable cash deposit is required to activate and secure the account.
- Interest rates are typically higher when compared with unsecured cards that offer similar benefits.
- Monthly maintenance, initial processing, and similar fees are sometimes hidden in the fine print.
- Rewards programs and sign-up bonuses are very rare.
How We Evaluate Secured Credit Cards for Building Credit
Many credit card companies offer unsecured credit cards to low-credit applicants which can, unlike prepaid or debit cards, help you build your credit score. However, such cards usually come with sky-high interest rates and a long list of additional costs. That's why secured options are ideal for customers with less credit experience, who just started working on their credit profiles.
The modus operandi of a secured card is very similar to that of an unsecured one. The only difference between the two is that secured credit cards require a cash deposit which protects the bank in case the cardholder defaults on a payment.
While you have a much better chance of approval if you apply for a secured card instead of an unsecured one (provided that you have sufficient income, no history of missed payments and no previous bankruptcy on your financial record), you should keep in mind that not all secured credit cards are made the same.
There are numerous factors to take into consideration and plenty of text to read when you start to compare credit card offers. Our site is there to simplify your search. We've compiled a list of everything you need to look at while shopping around for the best secured credit cards to help repair your credit.
Annual Fee
Fees on credit cards designed for people with bad credit are hard to avoid. Still, this doesn't mean that all secured credit cards come with stiff annual charges.
Considering that an annual fee is an expense that a borrower must pay regardless of whether they use the card or not, many consumers have a hard time justifying the ownership of one. However, if a secured card follows a model with multiple credit-building features and additional perks, it may be worth the cost.
There are products out there that help you build up your credit score, such as a credit-building account which asks that you pay off a small installment loan helping you qualify for new types of credit and loans in the future
Annual membership fees for the best secured credit cards are usually charged directly to your balance as soon as you open the account. Note that these cards also let you divide the fee into monthly installments.
Additional Fees
While the most sought-after credit card deals don't include many additional fees, there are a few extra charges to keep an eye out for. These include transaction fees such as cash advance, balance transfer, and foreign transaction costs, along with penalty fees which include returned payment and late payment charges.
Some credit card issuers charge initial processing and monthly maintenance fees on secured cards. We suggest you steer clear of such secured credit card offers.
Annual Percentage Rate (APR)
While a lower introductory annual percentage rate for purchases and balance transfers isn't something that you should expect from a secured credit card, there are options that don't charge dizzying rates.
However, given that secured cards are meant to help you develop healthy spending habits and build your credit score, it only makes sense to pay your bill in full each month before the APR kicks in. If you already know that you wouldn't be able to avoid carrying a balance, then you may not be ready to apply for a secured credit card just yet.
Security Deposit
A security deposit is the amount of money you put down in exchange for a credit line. It works as a safety net for your bank/lender in case you fail to pay what you owe. This is an upfront cost and must be paid before you open an account.
The exact amount of your cash deposit depends on both the credit card issuer's terms and your creditworthiness - it's generally between $200 and $2,500 but can go up to $10,000.
Security deposits on secured cards are refundable, but you won't get the money back until you close your account or upgrade to an unsecured card. That's why we suggest you opt for a deposit that you can comfortably afford and an amount that you won't need for at least a year.
Credit Limit
Credit limits (or credit lines) on secured credit cards are typically much lower than those offered on regular cards. The credit limit amount that you can get accepted for depends on your credit history and your deposit.
While most credit card issuers limit the available credit line to the amount you deposit, a select few providers may give you a limit between 125% and 150% of the deposit amount.
Issuers of the best credit-building credit cards will evaluate your account within six to 12 months. If you've made all your payments on time, you'll be able to request a credit limit increase or even move up to an unsecured card.
Credit Bureau Reporting and Credit Building Tools
The most reputable credit card providers report to all three major US credit bureaus (Experian, Equifax, and TransUnion). We recommend applying for secured credit cards provided by the issuers that work with at least one of these agencies. Why is this so important? Each time you make a payment, the issuer should disclose that information to the bureaus.
Reports which show a good repayment behavior will help you repair or build a healthy credit score.
Another thing to look at when comparing credit card deals is whether the issuer offers free credit-checking features. Some providers print your score on your monthly billing statements, while others give you the option to access it online.
Given that most clients apply for secured credit cards to build credit, this service can be very helpful when it comes to tracking the changes in your credit profile and understanding the impact of your spending habits.
Rewards Programs and Additional Benefits
Some secured credit cards offer rewards when you use the card for purchases (cash-back, travel, rewards at gas stations, direct deposit bonuses, etc.). This is a nice fringe benefit, but stay focused on your goal, which is to rebuild or establish your credit history. Don't overspend! Have a budget and monitor your spending.
Although these choices are limited, some secured credit cards do offer cash back rewards. The rates are usually on the modest side of the spectrum - typically 1% or slightly higher. While the availability of this type of reward shouldn't be your priority when shopping for the best credit card for building credit, it's still a nice perk.
If you choose a card that comes with cash back opportunities, remember that managing your personal finance is still a top priority. Stay focused on your credit-building goal and be careful not to overspend for the sake of higher rewards.
FAQ
Which secured credit card is the best to rebuild credit?
Here are our top picks for the secured credit cards used to help build credit:
- Secured Mastercard from Capital One: Best for low security deposit.
- OpenSky Secured Visa Credit Card: Best for no credit check.
- Discover it Secured: Best for cash back rewards.
- Applied Bank Secured Visa Credit Card: Best for fixed APR.
How fast will a secured card build credit?
Provided that you make regular on-time payments, a secured credit card can be a great asset on your credit-building journey. Compared to debit cards and prepaid cards, secured credit cards are a great way to increase your credit score gradually. With some of the best secured credit card options, you should be able to see an improvement in your score in as little as six months.
Can you be denied a secured credit card?
Getting denied for a secured credit card may come as a surprise. However, bear in mind that you may be rejected if you have insufficient income, a history of missed payments, or a bankruptcy on your record. Some issuers may even deny your application because of your low credit score.
Still, the best secured credit cards are usually the ones that have no credit score requirements, suited for individuals who haven't owned a credit card before or have a poor credit rating, and as such don't require a hard credit check.