Updated February 1, 2018

Secured credit cards can help people build credit when establishing a history of good credit behaviors, namely, paying bills on time and savvy management of debt balances. Secured credit cards also don't have restrictive credit score requirements, making them useful for building credit after a bankruptcy or for soon-to-be cardholders with no credit history.

Discover it® Secured Card - No Annual Fee
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Discover it® Secured Card - No Annual Fee

Best for: High limit

Discover it® Secured Card - No Annual Fee is feature-packed and includes several perks we Fools covet, including a $0 annual fee, cash back, and a free FICO® score each month. Restaurant and gas purchases earn 2% cash back (on up to $1,000 of combined bonus-category spending each quarter) and all other purchases earn unlimited 1% cash back. Discover also matches all the cash back for new cardholders earn in the first year, unlimited. Many of these perks are simply absent in a secured credit card. The security deposit ranges from $200 to $2,500 and Discover will review your account after seven months for a credit limit increase. Read our full Discover it® Secured Card - No Annual Fee review to learn more.

Capital One® Secured Mastercard®
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Capital One® Secured Mastercard®

Best for: Low security deposit

Capital One® Secured MasterCard® landed a spot on our list for several reasons. First off, the card has one of the lowest security deposits we know of ($49, $99, $200), which makes it accessible to cardholders wanting to build their credit with minimal out-of-pocket costs. Second, the card includes a $0 annual fee and Capital One will increase your credit limit after five on-time monthly payments. Read our full Capital One® Secured MasterCard® review to learn more.


How secured credit cards work

Beyond finding the best secured credit card for you it's worth also understanding how secured credit cards work.

  • Cardholders must make a refundable deposit upon opening a secured credit card. The security deposit is also your available credit limit, which is generally determined by your card issuer.
  • Secured credit cards incur interest charges when balances are carried month to month, unlike debit cards. We Fools believe cardholders may be better off avoiding interest by paying down debt balances before the due date each month to avoid sky-high interest charges. 
  • Cardholders can improve their credit by establishing a history of preferred credit behaviors.
  • Card issuers will review your account after a specified period to either refund the security deposit or increase your credit limit.

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