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The Best Secured Credit Cards
Ultimate Buyers Guide

The Best Secured Credit Card

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When you're searching for the best secured credit cards you probably have a lot of questions. First on that list may be, how do these cards work? The basis of a secured card is that it requires a collateral deposit in the form of cash which then becomes the credit line for that particular account.

This type of financial instrument can help you build a credit history, repair a spotty one, and pave the way for a great unsecured credit card deal a year or two down the road. I've put together a list of the top 5 secured credit cards so that you can choose the offer that's best for your situation.

The Best Secured Credit Cards: Our Top Picks

Discover it Secured

  • Pros
  • No annual fee
  • Rewards program
  • No penalty APR
  • No late fee on first late payment
  • Free FICO scores
  • Cons
  • Higher interest than some cards
  • Initial deposit requires bank account

Discover breaks the mold of typical secured credit cards by offering a cash back rewards program with their version of this financial tool. Even if the Discover it® Secured were a traditional credit card, the rewards program would still be quite robust. This makes it a particularly appealing coup if you're trying to rebuild your credit. Earn money for your efforts at the same time.

Another feature that makes this card one of the best secured credit cards with rewards is the smooth transition to a traditional account. After one year of card membership, your account is evaluated monthly to assess your eligibility to move to a regular card. If you qualify, you will keep the same account number and your rewards carry over to your new status.

The minimum/maximum deposits are $200/$2500 which some might find too restrictive. Still, due to the fact that cash back rewards are virtually non-existent in the industry, plus the simple upgrading process, this card garners the top spot on my list of the best secured credit cards.

  • Sign-up bonus: Just as with its unsecured cash back cards, Discover matches your cash back earnings dollar-for-dollar at the end of your first year.
  • Key fees: Balance transfers cost 3% of the amount transferred. Cash advances are the greater of $10 or 5%. The first time you pay late, the fee is waived. After that it will be as high as $37. Returned payments cost you $37.
  • Introductory APR: You'll get a rate of 10.99% on balance transfers for the first six months, as long as the transfers are made before February 10, 2017. There's no intro APR on purchases.
  • APR: The standard APR for purchases and balance transfers is 23.24%. Cash advances have a 25.24% APR.
  • Other perks: There is no penalty APR, and unlike other secured credit cards, you actually earn cash back - 1% on all purchases and 2% at gas stations and restaurants on up to $1000 in combined purchases per quarter. You get free FICO scores, along with reporting to all three credit bureaus. You'll also receive monthly reviews after your first year, to see if you qualify to have your account changed to unsecured.

Capital One Secured

  • Pros
  • Low minimum security deposit amounts
  • Regular reports to major credit bureaus
  • Free credit tracker
  • No annual fee
  • Cons
  • Late fee up to $35
  • 3% or $10 cash advance fee
  • Up to $35 returned payment fee

Looking to take control of your finances while simultaneously building your credit? Consider the Capital One Secured MasterCard. In three easy steps you can be on the road to financial freedom. The steps are simple. First make your security deposit of $49, $99, or $200, then use your card responsibly and by showing consistent payments you'll gradually rebuild your credit. Then in good time you can make the decision to apply for a card that's not secured.

Gradually build your credit line with this card. It starts at $200 and can go as high as $3,000 if you demonstrate to Capital One that you're able to make payments on time and are responsible in your spending habits.

This card has received great reviews by customers and the mobile/ online capabilities are perfect for managing your funds on the go. If you'd like to talk to a representative in person they have branches in New York, Texas, New Jersey, Louisiana, Maryland, the District of Columbia and Virginia.

All in all, Capital One is a great institution to get a secured credit card with. They're a renowned Fortune 500 company; they offer a free credit tracker to monitor credit, and regular reports to the three major credit bureaus. All of these components will aid in rebuilding your credit.

  • Sign-up bonus: No sign-up bonus.
  • Key fees: Cash advances cost the greater of $10 or 3%. Late payments cost up to $35.
  • Introductory APR: No introductory APR available at the time of this review.
  • APR: The standard APR for the Capital One Secured Card is 24.99% for purchases, balance transfers, and cash advances. This is a bit higher than some cards, however paying off your balance in full will help you avoid the interest charges.
  • Other perks: Free credit tracker helps you stay on the right path, plus you get all of the standard benefits like travel assistance, price protection, and extended warranties. After five months of paying your bill on time you will be considered for a higher credit limit.

Citi Secured

  • Pros
  • Poor to fair credit approved
  • No annual fee
  • $200-$2500 credit line
  • Over 900 in-person locations
  • Eligible for unsecured card after 18 months
  • Cons
  • Penalty APR
  • Late fee up to $35

Citibank has now eliminated the annual fee on its secured credit card, making it even more appealing as a financial tool for the credit challenged.

You can deposit anywhere from $200 to $2500 into a certificate of deposit, and your credit limit then becomes equivalent to that amount. A major benefit in terms of building your credit standing is that Citi will report your payments and performance to the three major credit bureaus which ideally will give your FICO score a massive boost. Also, if you have proven that you can use your card responsibly, after 18 months, Citi will consider you for an unsecured credit card.

The Citi Secured MasterCard is ideal for people with poor credit because of the opportunities it presents to boost your score. Overall, the terms of this card are favorable, making it one of the best secured credit cards to rebuild your credit.

  • Sign-up bonus: There is no sign-up bonus for the Citi Secured card.
  • Key fees: Balance transfers cost the higher of $5 or 3%. Cash advances are $10 or 5%, and foreign transactions cost 3%. Late and returned payments may go as high as $35.
  • Introductory APR: There is no introductory APR.
  • APR: The Citi Secured MasterCard APR for purchases and balance transfers is 22.24%. Cash advances have a 25.49% APR, and the penalty APR is 29.99%.
  • Other perks: Citi cards come with a fairly impressive suite of benefits. You get travel protection, extended warranties, $0 liability, roadside assistance, and purchase protection.

Bank Americard Secured

  • Pros
  • Potential approval for limit higher than deposit
  • Easy transition to unsecured account
  • Lower interest than some secured cards
  • Overdraft protection option when tied to a BoA account
  • Cons
  • Annual fee
  • Penalty APR

The BankAmericard Secured MasterCard (formerly a Visa) is a solid offering if you're looking for a card that may give you a higher credit limit than your deposit, and the chance to upgrade to an unsecured card in the future.

First, the positives my research turned up on this contender - with a required deposit of at least $300, you could be approved for a higher limit than that based upon your income and other factors. The maximum deposit is $4900.

You can keep the same card even if you're transitioned to an unsecured MasterCard after a year of responsible payments. This is unusual, and makes the process simple for you. On the other hand, there are a couple of downsides, as I will detail below.

I like this card because of the high deposit maximum - this means that once you qualify for an unsecured account, the card should still meet most of your needs and you won't have to start all over with a different one. BankAmericard Secured MasterCard is a well-rounded choice for improving your credit.

  • Sign-up bonus: No sign-up bonus for this card.
  • Key fees: There is a $39 annual fee, along with late payment fees of up to $37 and returned payment up to $27. Balance transfers are $10 or 3%, and cash advances are either $10 or 5%, or $10 or 3%. Foreign transactions cost 3%, and if enrolled in Overdraft Protection, that fee is $12 for each transaction.
  • Introductory APR: No introductory APR.
  • APR: The standard BankAmericard Secured APR on purchases and balance transfers is 20.49%. Cash advance APRs are either 20.49% or 25.24% depending upon the type. The penalty APR is 29.99%.
  • Other perks: You'll get the standard suite of features like an EMV chip, mobile pay, and fraud protection. You also get a $0 liability guarantee, optional overdraft protection if you have a BoA account, mobile banking and more.

First Progress Platinum

  • Pros
  • No minimum credit score required
  • No application fees
  • Accepted at MasterCard locations
  • Fully-refundable security deposit
  • Reports to all three credit bureaus
  • Cons
  • Maintain deposit of $300 minimum
  • Not available in Arkansas, New York, Iowa, or Wisconsin

The First Progress Platinum Prestige MasterCard Secured Card fought off a few other offerings to make it to the list. With that in mind, it stands out primarily because poor-average credit holders will get approved, there's no application fee and it reports to the top three credit bureaus.

Since it's a MasterCard you'll benefit from the convenience and protection of the worldwide MasterCard system. Before we continue, be aware that this is not available in Arkansas, New York, Iowa, or Wisconsin so if you live in any one of the aforementioned states then you can automatically rule this card out. The annual fee is $44 which is higher than any other card on my list and requires the cardholder to maintain a $300 minimum deposit.

On average, individuals with very poor credit claim that the APR is lower than with other banking institutions. But that differs from person to person so just because one individual qualified for a low APR doesn't mean the same will apply to you.

This could be a great secured option for you if you have a very low credit score and have found difficulty getting approved for other cards. Since it is not available in a handful of states, please make sure to confirm your state is on the list before applying.

  • Sign-up bonus: No sign-up bonus associated with First Progress secured cards.
  • Key fees: There is a $44 annual fee for the Platinum Prestige card. Cash advances cost $10 or 3%, the higher of the two, and foreign transactions are charged at 3%. The late payment fee is up to $38, and the returned payment fee is up to $27.
  • Introductory APR: No introductory APR.
  • APR: The APR on purchases is 11.99%, and the cash advance APR is 18.99%.
  • Other perks: Your security deposit is refundable, and First Progress reports to all three credit bureaus monthly so that you can start restoring or establishing your credit history.

Key Considerations of Secured Credit Cards

Say you put $1,000 in an account. That means you can charge a total of $1,000 using your secured credit card. If you need more credit, then you could add additional funds to the account or sometimes if you demonstrate responsible payment management then the bank will increase your credit limit without the need for additional deposits.

That said, the ideal secured credit card will be favorable in terms of the following factors:

Annual Fees

Shop around for a card that has no annual fee, if possible. Since this can often be hard to come by look for a card with a low annual fee.

Minimum Security Deposit

The deposit amount is based on your creditworthiness so it is best to check with the individual provider for up-to-date and accurate details.

Credit Line

Secured credit cards have credit lines anywhere from a few hundred dollars all the way up to thousands. To increase your line, usually you'll need to deposit more money but some banks will increase this with responsible card usage.

Reporting to Credit Bureaus

To effectively improve your credit, it's important to look for a card which will report your account activity and payments on time to Equifax, Experian, and TransUnion.

Comprehensive Customer Support

Telephone and live chat support are critical for up-to-date inquiries. You also want to be sure you can obtain prompt assistance in the event of a problem.


Cash-advance, returned payment, and late fees are a handful of the considerations to keep in mind when selecting a secured card.

Extra Features

Review the extra features offered like mobile banking, fraud alerts, and roadside dispatch.

In the following sections, I will tackle some common questions and myths surrounding secured credit cards and how they work.

What are Secured Credit Cards Used For?

This may be one of the most pervasive myths out there. As MSN Money points out, this kind of card is viewed by the public as "the prepaid calling card or mobile phone of the credit card industry, even though that's not how they work at all".

Making regular payments on one of the top secured credit cards helps you to create a credit history that you can use to obtain other approvals.

It's true that some people who apply for secured cards do so in order to rebuild shaky credit. There are, however, other valid reasons for choosing this kind of financial instrument.

  • Students/young people - parents are increasingly concerned about their children's financial health and choices, and with good reason. As the Wall Street Journal reports, a survey by Experian shows that 30% of college grads are coming out of school with credit card debt. Parents can use a secured card to help adult kids control spending and teach responsibility, without the risk of racking up a lot of debt in college.
  • Building a credit history - when you're first starting out, you have no credit history at all. Yet, some history is required to get a credit card. This creates a difficult situation because you can't get credit if you don't have credit and vice versa. Making regular payments on one of the top secured credit cards helps you to create a credit history that you can use to obtain other approvals.

How Secured Credit Cards Work

One of your concerns with this type of card may be whether or not it can be used just like a secured credit card. In the vast majority of cases, the answer is yes. No one can tell by looking at it whether your card is secured or unsecured. But can you use it just like a regular credit card?

Your secured credit card will function exactly like an unsecured one in the vast majority of purchases you make. Even if you need to use it to rent a car, you shouldn't experience any issues unless you don't have a high enough limit in order for the rental car company to put the hold on your account. In that case, shop around and find the company which requires the smallest deposit on top of the rental fee.

In short, don't worry about being able to use your card for typical expenses and purchases. It is not the same as the prepaid cards you see hanging in the drugstore and will be accepted anywhere you can use the unsecured version of that particular brand (Discover, Visa, etc.).

Payment Primer

Some people assume that because you put a deposit down on your card, this covers the cost of future purchases. The best secured credit cards work just like any other, they come with a payment schedule just like any other.

You must make minimum payments on your account each month, and some companies penalize you if you don't, in the form of late fees and/or a higher APR. Although it's notable that there are a couple of companies on my list of the best secured credit card reviews which don't charge these fees.

So, what happens to your deposit? The banking institution puts it into a collateral holding account. The money is still yours, however, you do not earn interest on it and it is not applied to charges you make on your card. If your account is eventually converted to an unsecured one, the company will typically refund your deposit.


There is a perception that those with a secured credit card pay higher interest rates, and this can be true in some cases. The average credit card APR in 2016 is 15.18% (at the time of this review). Some cards in my review carry a rate as high as 24.99%.

As far as your long-term financial health, the important thing is that you look at the big picture. There are a few things to keep in mind when assessing secured card APRs:

  • Ideally, you should pay your balance off each month so that you will be unaffected by the interest rate.
  • There are other fees - or lack thereof - which can offset a high interest rate. Some cards charge an annual fee, while others forego the annual fee but charge a hefty penalty for late payments. When doing your secured credit cards comparison, factor in all possible fees and penalties to work out the best deal.
  • Keeping a good payment record with your secured account means you won't have to put up with the high rates for long - most companies will consider you for a more favorable card after just a year.

As long as you use your card responsibly so that you can move to another type of account as quickly as possible, the APR should have minimal impact. It's when you start carrying a balance, allowing the debt to build and spiral out of control that a problem arises.

Secured Credit Cards vs. Subprime Offers

If you're looking at secured credit cards to rebuild credit, you've likely also received subprime offers in the mail. These are the envelopes with "pre-approved" stamped prominently on the front, offering to send you a credit card with virtually no questions asked.

...a subprime card may cost consumers nearly $400 more than a secured card over a three-year time period.

These subprime credit card offers are tempting. After all, at this, point it's very possible that no one else is willing to give you an unsecured credit line of $200-$500.

The problem is that these offers are almost never a better financial decision than applying for one of the top rated secured credit cards. The interest is almost always higher, the lending practices typically predatory, and the account ends up costing you more in the long run. According to Forbes, a subprime card may cost consumers nearly $400 more than a secured card over a three-year time period.

The best thing you can do when these offers come in the mail, as difficult as it is to resist filling them out, is to feed them to your shredder.


Review the pros and cons of the five secured credit cards mentioned above. Keep in mind things like the minimum security deposit, monthly reporting to the three major credit bureaus as well as the other points mentioned in the considerations summary.

One final word of advice whenever you're shopping for a credit card is to check with the issuer directly for specific APRs since they are contingent on your personal creditworthiness. Once you've built your credit up to a point where you can qualify for an unsecured card, then you can choose from among the best cash back credit cards or the best travel rewards credit cards.

Secured Credit Cards FAQs

Q What banks have a secured credit card?


A number of banks offer a secured credit card, including Citi, Capital One, US Bank, Wells Fargo, Bank of America and Merrick Bank. Secured credit cards are designed to help you rebuild your credit. Look for cards that have no annual fee, a low security deposit and that can help you earn rewards or cash back.

Q Do prepaid credit cards help build credit?


A prepaid card is technically not a credit card, but a debit card. Using a prepaid card won't help you build credit, as the companies that offer them don't report to the three credit bureaus. If you are looking to build your credit, you might consider a secured credit card, which requires you to put down a deposit and which reports to the three credit agencies.

Q How do you rebuild credit?


You can rebuild your credit in several ways. The most important thing to do is pay your bills on time. Keeping your credit balances low will also help increase your credit. If you need help getting a credit card, consider a secured credit or a credit builder loan to raise your score. Becoming an authorized user on someone else's credit card or having someone co-sign a loan or card with you can also help you rebuild your credit.

Q Is Discover a secured credit card?


Along with its unsecured credit cards, Discover does offer a secured credit card, the Discover it Secured Card. The card has no annual fee and also offers cash back and free credit monitoring. The card's rewards include 1 percent cashback on any purchase, plus 2 percent back on spending at restaurants and gas stations.



Q Are secured credit cards accepted like regular cards?


Yes, secured credit cards are viewed as regular cards by retailers and stores nationwide. They are ideal for individuals who are trying to rebuild their credit, have faced difficulties being approved for other types of cards, or want to strengthen their credit history.

Wells Fargo's secured card, for example, can be used wherever a Visa credit card is accepted. If you are unsure whether a merchant will accept your secured card, simply ask a store associate or manager. Otherwise you can contact the card's client assistance service to hear a list of participating stores. Certain exclusions may apply depending on the merchant.

Q Should I get a secured credit card?


Secured credit cards are ideal for individuals who have poor to fair credit and are trying to improve their credit scores and ratings or who have been declined for other card types. When your receive a secured credit card from companies like Capital One and Bank of America, your history will be regularly reported to the three major credit bureaus (Equifax, Experian, TransUnion). That means you can considerably improve your credit scores with responsible use and on-time payments.

Be aware that not all banks and institutions offer a secured credit card and there are a select few which charge exorbitant fees. As long as you check the financial rating of the institution and do your research ahead of time, you should be good to go!

Q Do all banks offer secured credit cards?


No, not all banks of the same types of cards. The types and credit line will vary from issuer to issuer. It's best to inquire with your particular bank as to whether or not they offer this card. Also, just because your bank offers a secured credit card does not necessarily mean that you will be approved for it or that's it's appropriate for you. A secured credit card is best suit for individuals who are trying to rebuild their credit. Banks take a comprehensive look at your credit scores, credit history, and a number of other factors before issuing credit cards.

Q What is a secured credit card?


A secured credit card is one in which the credit line is based upon on the amount of cash you keep in the account. The cash is used as a collateral deposit in the event that you do not fulfill your debt. For example, if you put $600 in the account, you'll be able to charge up to $600 on the secured card. Payments are not directly deducted from this account though.

After you fill out an application either online or in person for a secured credit card, the funds will be transferred into the account. This process can take up to 10 days for some banks like Wells Fargo. If you've been up-to-date on your payments, many banks will see that as a good sign and consider increasing your credit line for a higher deposit.

Q How much do I have to deposit?


Usually a secured credit card requires a deposit amount anywhere from $49 to $10,000. However, as previously mentioned, many card issuers will allow you to increase your credit line if they see that you are paying off your balance on time.

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