Best Secured Credit Cards for January 2020

Jordan Wathen is a personal finance expert with a deep professional and personal expertise on credit cards. His articles have appeared on sites such as MSN, CNBC, and Yahoo.

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Finding the best secured credit card shouldn't be complicated. Which is why we narrowed down the list of picks to a handful of cards that we've found can solve a vast array of needs when building or rebuilding credit. Most importantly, each pick offers a wealth of perks without charging an annual fee.

Ratings Methodology
Apply Now
Secure lock icon.

On Discover's Secure Website.

Why Apply

An unmatched leader with a laundry list of perks and focus on reducing pesky fees. It's rare to find such a rich rewards program in this category, even more impressive that there's no annual fee.

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Top Perks:
  • Low security deposit
  • No annual fee
  • FICO® score for free
  • Bonus cash back
  • Annual Fee: $0
  • Regular APR: 24.49% Variable
  • Intro APR: Purchases: N/A Balance Transfers: 10.99%, 6 months
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • INTRO OFFER: We automatically match all the cash back you've earned at the end of your first year.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
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Rates & Fees
Apply Now
Secure lock icon.

On Capital One's Secure Website.

Why Apply

A go-to credit card for people dipping their toes in to building their credit histories, mostly due to the card's low initial security deposit and no annual fee.

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Top Perks:
  • No annual fee
  • Security deposit starts at $49
  • Annual Fee: $0
  • Regular APR: 26.74% Variable
  • Intro APR: Purchases: N/A Balance Transfers: N/A
  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
  • Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide
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Whether you have bad credit or no credit at all, secured credit cards are a way to start building banking relationships while boosting your credit score so that you can qualify for other types of loans and better credit cards later.

There are numerous secured credit cards out there, but many come with high fees and other charges that make them a poor way to build or rebuild credit. Below, we’ll explore the best secured credit cards on the market, and show you how to manage your secured credit card to get the most benefit to your credit score.

What is a secured credit card?

A secured credit card is just like any other credit card with one big exception: You have to put down a deposit as collateral to open a secured credit card account. The collateral protects the issuer from losses, which allows them to approve secured cards even when the applicant has bad credit or no credit at all.

Typically, secured credit cards carry a low credit limit of $200 to $250, and are generally considered to be “starter” credit cards. They are also useful for people who have bad credit, since they can help you add a good account to your credit report if managed appropriately.

Why choose a secured credit card?

There are five reasons why people choose to apply for a secured credit card rather than an unsecured credit card, and use their secured card in lieu of a debit card or cash.

  1. Easy approval -- Because applicants have to put up cash as collateral for a secured credit card, most issuers will approve just about anyone, no matter how bad their credit may be. Whereas it is significantly harder to qualify for a top-tier unsecured card than a lower-tier unsecured card, the odds of getting approved for the best secured credit card are not much different than the odds of getting approved for the worst secured card.
  2. Build or rebuild your credit -- Some secured credit cards report to all three major credit bureaus, so that when you make payments on time and manage your account wisely, all of this good behavior will be reported on your credit report. Over time, a secured credit card can help you establish credit history (if you currently have no credit at all), or rebuild from past problems. Cards that report to Experian, TransUnion, and Equifax are best.
  3. Pick your own credit limit -- While you can get started with as little as $49, some cards offer you the opportunity to put up a larger amount of collateral for a larger credit line, giving you more flexibility to match your credit limit with your spending needs.
  4. Rewards -- Cash back rewards used to be limited to credit cards for people who had good to excellent credit, but some secured cards now offer cash back rewards, making them a more rewarding alternative to ordinary unsecured cards or prepaid debit cards.
  5. Fraud protection -- Credit cards offer more protection against fraud than other forms of plastic payment, particularly debit cards, making them safer to use for purchases.

How to pick a secured credit card

Secured credit cards are some of the simplest of credit cards, but there are a few things that make some cards standout stars in the category. Here are some features that differentiate the best secured credit cards from the very worst, in relative order of importance.

No annual fee -- Secured cards typically have low credit limits, and those who use them do so sparingly. Thus, many banks make money on annual fees they charge to have an account. The best secured cards allow you to open an account with no annual fee.

Low or partial security deposit -- Applicants should naturally prefer putting up less collateral rather than more. The best secured cards allow you to get started with $200 or less, making them available to people who are on a tight budget.

Reporting to all three credit bureaus -- One of the major advantages of having a secured credit card is that it can help you build or rebuild your credit history. Secured credit cards should report your behavior to all three major credit bureaus so that when you manage your account wisely, you’re rewarded with an uptick in your credit score.

Credit graduation -- You won’t be stuck with a secured credit card forever. The best secured cards convert into unsecured cards after several months of on-time payment history. When your credit card “graduates,” the card company will return your deposit, thus turning your secured card into an ordinary unsecured card.

Rewards -- Secured cards increasingly offer rewards on every swipe, enabling you to earn cash back on every purchase you make with the card. Rewards aren’t a make-or-break feature, though, since rewards aren’t a primary reason for opening a secured credit card account.

How to improve your credit score with secured cards

If you follow a few best practices, you can use a secured credit card in a way that will maximize the positive benefit to your credit report and credit score. Here’s are five steps to making sure your secured credit card helps your personal finances.

  1. Use the card sparingly. For best results, cardholders should try to keep their balances under 30% of their credit limit at all times. That means your balance should always be lower than $60 if you have a secured card with a $200 credit limit. If you have to make multiple payments per month to avoid using more than 30% of your balance, then do it! Your credit utilization ratio, or your balance as a percentage of your credit limit, makes up 30% of your FICO® Score. Lower utilization is better.
  2. Pay on time, and in full. It is a myth that paying interest on a balance is necessary to get good credit. Always pay your secured credit card on time, and in full, by paying the “statement balance” when the bill arrives. If you pay this amount on time and in full, you won’t pay a dime in fees or interest charges, and get all the benefit of having a card that reports your on-time payments to the credit bureaus, which can increase your credit score.
  3. Don’t apply for more cards. One secured credit card managed correctly can do a lot to help you build or rebuild credit. And while it may be tempting to open another credit card account, having two cards won’t double your progress. If anything, having more accounts just increases the risk that you miss a payment, get into credit card debt, or make other mistakes that might set you back. Stick to one card for a year or so before thinking about other offers.
  4. Watch your progress. If your secured card offers free access to your FICO® Score, watch as your score changes over time. You should begin to see improvement as the card ages and your on-time payments pile up. Seeing your progress can be very motivating, which is why we prefer cards that offer free access to your FICO® Score.
  5. Keep the card open. Even if you later decide to move on to other credit cards, make sure to keep your secured card account open and active by using it for a small purchase every few months. Issuers frequently close inactive accounts, at which point they’ll stop reporting to the credit bureaus. You want all the good history you built up to remain on your credit report, and the only way to ensure it stays there is to keep the account open by using it at least once every few months.

Is a secured credit card right for you?

If all of the following statements apply to you, it may be smart to consider a secured credit card.

  • You have low or no credit because of past late payments, bankruptcy, judgments, or other serious negative marks on your credit report.
  • You have enough income to reasonably pay for your charges in full every single month. Income requirements vary, but Capital One specifically requires applicants to have monthly income that exceeds their mortgage or rent payments by at least $425.
  • You want to rebuild your credit, and have a small amount of money (no more than $200) that you can set aside as collateral to open a secured card account.
  • You are worried about getting denied for other credit cards, such as low credit limit unsecured cards or store cards.

In short, a secured credit card is good for people who may not qualify for other types of credit accounts because of limited income, or because they have no credit or low credit scores.


  • It is possible to be denied for a secured credit card. Although these cards are intended for those who are new to credit or rebuilding their credit, it doesn’t mean that the card issuers accept everyone who applies.

    If your secured credit card application was denied, then you should receive a letter with the denial reason within seven to 10 business days. Depending on why you were denied, you can try to correct the issue before applying for another card.

  • By using a secured credit card regularly and paying the bill on time, you can see rapid improvements to your credit. However, there's no specific type of credit card that builds credit faster than others. How fast your credit improves will depend entirely on your financial habits and the information on your credit report.

  • A secured credit card is a good idea if you're having trouble qualifying for any other credit cards, either because you haven't had a chance to establish your credit history yet or if you need to rebuild your credit from past financial mistakes. Since it's much easier to qualify for secured credit cards, they give you the opportunity to get a card and start raising your credit.

    If you have at least fair credit, then you're better off looking for credit cards you can get without paying a security deposit.

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