Secured credit cards are a great way to build credit. To qualify, you don't have to have any credit at all or good credit. Your actions, such as making your monthly payments, will be reported to major credit bureaus. This can help you improve your credit score.
Low deposit requirements are a hallmark of the best-secured credit cards. Be aware that certain secured credit cards can have high-interest rates or hidden fees. These are our top picks for secured credit cards that will be the best in 2021.
The best-secured credit cards
- Cash back: Discover it(r) Secured Credit Card
- Low-security deposit: Capital One Secured Credit Card
- Secured credit card with cashback: Bank of America (r) Customized Cash Rewards Secured Card
- Low Security Deposit: Citi (r) Secured MasterCard(r)
- Secured credit limit high: U.S. Bank Secured Visa(r), Card
- No credit check: OpenSky(r) Secured Visa(r) Credit Card
- Low ongoing APR: First Progress Platinum Prestige Secured Card
How to select the best-secured credit card
There are many different types of secured credit cards. To find the best credit card for you, spend some time comparing them. Consider your financial situation and compare the features of each card.
These are the things to consider when looking for the best secured credit cards:
- Secured credit cards that require a low-security deposit. These cards are often the best and easiest option because they cost less upfront.
- There is no annual fee for a secured card. This will reduce your costs. You don't need to spend a lot of money on credit building or rebuilding.
- Get a free credit score. Keep your credit score up to date as you work towards improving it. Some services may charge for this service, but many secured credit cards offer credit scores free of charge.
- You can upgrade.
- Rewards. Although a rewards program should not be your top priority when building credit, it can help you earn cash back for your purchases.
Review of the top secured credit cards
Secured Credit Card - Discover it(r).
The Discover it(r), Secured Credit Card, is a great secured credit card that comes with no annual fees. The card offers a cash-back match for all rewards earned within the first year. Cardmembers will also be eligible for 2% cash back at gas stations or restaurants for purchases up to $1,000 each quarter, and 1% cashback on all other purchases.
Capital One Platinum Secured credit card
Excellent for: Low-Security Deposit
If you are looking for a secured card with a low deposit, the Capital One Platinum Secured Credit Card may be a good choice. This card does not have an annual fee and requires a minimum security deposit of $49, $99, or $200, depending on your financial situation.
Citi(r), Secured Mastercard(r).
Excellent for: Low-Security Deposit
Citi(r), Secured Mastercard(r), has no annual fees and a low-security deposit that starts at $200
U.S. Bank Secured Visa (r) Card
Excellent for: High secured credit line
This card does not have an annual fee, but it does require a $300 minimum deposit. The U.S. Bank Secured Visa (r) Card has a higher credit limit and can hold up to $5,000, depending on how much deposit is made.
Secured Visa Credit Card OpenSky(r), Secured Visa(r),
Great for: No credit
OpenSky(r), Secured Visa(r), and Credit Card charges a $35 annual fee and requires a $200 minimum deposit. This card is not free, but it charges an annual fee of $35 and requires a minimum deposit of $200. It can be a great choice for those with poor credit histories.
Bank of America (r) Secured Cash Rewards Credit Card
Excellent for: High cashback rewards
The Bank of America Customized Cash Rewards Secured Card Credit Card has no annual fees and offers higher rewards than other secured cards. There is a $300 minimum deposit, but cardholders can earn 3% cashback with additional earnings of 2% or 1% depending on their category. Each quarter, the bonus cashback is limited to $2,500 in bonus-category spending.
First Progress Platinum Prestige Secured Card
Excellent for: Low ongoing APR
One of the most notable features of the First Progress Platinum Prestige Secured Card is its low ongoing APR, zero credit history requirement, and no credit checks. These perks come with an annual fee.
What is a secured card?
A secured card requires a refundable security deposit. This card is designed to help consumers rebuild or build credit. The credit limit on these cards is usually very low. It's therefore easy to get approval even with poor credit.
A secured credit card can be a great way to build credit. Your card issuer will report your monthly payments to major credit bureaus. Be wary of secured cards that have hidden fees or high-interest rates. A secured card that does not have an annual fee is a great idea.
Some people prefer to take out personal loans to improve their credit rating and money management skills, rather than taking out bad credit loans.
Is a secured credit card good for you?
If you are looking to improve or build credit, secured credit cards can be a great idea. These cards are especially useful if you don't have the credit to qualify for regular credit cards. The following will help you determine if a secured card is right for your needs.
- You want credit to start from scratch. It's important to establish a history of timely payments. This can be achieved by regularly using a secured card and paying it off each month in full. Make sure that you don't miss any monthly payments. Your credit card issuer may report missed payments to credit bureaus. You'll then be charged a late fee.
- Have bad credit? Would you like to learn how to rebuild credit? Secured credit cards could be your answer. Secured credit cards can be a good option if you are behind on your payments or have filed for bankruptcy.
- You want your credit score to rise without getting into debt. A secured credit card can be a great option. Secured cards have low credit limits. You can reduce your debt if you have accumulated a large amount of debt in the past.
The pros and cons of secured credit card
You should be familiar with the pros and cons of a secured credit line before you open one. These points will help you choose the right secured credit card.
Pros
- Secured cards have higher approval chances than unsecured cards. Even for those with poor credit scores, approval chances are higher.
- These cards can be used to build your credit. You should use your card responsibly. Make at least one payment per month. However, it is best to pay your entire balance.
- Deposits can be refunded. Your deposit will usually be refunded once your account has been closed and paid in full.
- The card issuer might allow you to change to an unsecured card if you have a secured card.
Cons
- These cards need a security deposit. This can be difficult if you are already having financial difficulties or have trouble paying off your debt. Secured credit cards with a low deposit requirement are a good option if this is something that you find difficult. Each card will require a minimum security deposit.
- There may be fees associated with the card. Many secured credit cards have an annual fee. Secured cards can also have additional fees such as processing or application fees. You should look for cards that have no fees.
- Your card might have a high interest. You'll want to pay more than the minimum monthly payment. You can avoid paying interest by paying the entire card balance every month.
- Not all secured credit cards offer rewards. While you build your credit, it may be necessary to accept a card that has no rewards program or offers minimal rewards.
There are other options
There are many options if a secured card is not right for you. These are some options to consider:
Credit cards for poor credit
Bad credit cards are also worth looking into. The best credit cards for poor credit do not require any security deposit. However, those that do not require a security deposit may charge an annual fee. Sometimes they are more difficult to obtain if you have a history of serious credit problems.
Cosigner to an unsecured credit card
You can also apply for an unsecured credit card with a cosigner. Your co-signer acts as a guarantor. If you default on your credit card payments, your cosigner can be held responsible for paying your debt. This is not something to take lightly. You might be eligible for a regular credit line with lower fees and terms if you can find someone who trusts your application.
Student credit cards
The best credit card for students is a good option if you are a student trying to build credit. These credit cards do not require you to have a long credit history or to deposit a security deposit. Many cards offer student-friendly rewards.