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Secured credit cards are credit cards that are guaranteed with a refundable deposit that acts as collateral. Sometimes, it also acts as the card's credit limit. You don't have to have good credit, or any credit at all, to qualify for a secured credit card. Using a secured credit card is an excellent way to build credit, because your monthly payments are reported to the credit bureaus. However, you have to be wary of secured credit cards with hidden fees and exorbitant interest rates.
The best secured credit cards have low deposit requirements and free credit scores. It's also important to opt for a secured card with no annual fee. Some of the top secured cards are also good starter credit cards, as they come with rewards or the ability to eventually upgrade to an unsecured version. Here are our picks for the best secured credit cards in 2020.
Great for: Cash back
Bottom Line
Need to build your credit history? This card is a great place to start. It offers perks rarely found in secured cards including cash back, no annual fee, and double cash back in the first year. Read Full Review
Credit Rating Requirement:
Rewards
2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically
Annual Fee
$0
Intro APR
Purchases: N/A
Balance Transfers: 10.99%, 6 months
Ongoing APR
22.99% Variable APR
Welcome Bonus
Discover will match all the cash back you’ve earned at the end of your first year.
Highlights
Great for: High secured credit limit
U.S. Bank Secured Visa® Card
Bottom Line
With a large credit line range for a secured card, this is a great choice. It also comes with rental car insurance and free access to your credit score.
Credit Rating Requirement:
Rewards
N/A
Annual Fee
$0
Intro APR
Purchases: N/A
Balance Transfers: N/A
Ongoing APR
25.99%, variable
Welcome Bonus
N/A
Highlights
Great for: Low security deposit
Capital One® Secured Mastercard®
What We Like About The Card
Comes with a low initial security deposit and no annual fee, making it a top pick if you want to open a secured card account without breaking the bank. Read Full Review
Credit Rating Requirement:
Rewards
N/A
Annual Fee
$0
Intro APR
Purchases: N/A
Balance Transfers: N/A
Ongoing APR
22.99%, variable
Welcome Bonus
N/A
Highlights
Great for: No credit check
OpenSky® Secured Visa® Credit Card
Bottom Line
A good option for new to credit applicants. The fact that there's no credit check could justify the annual fee for some cardholders
Credit Rating Requirement:
Rewards
N/A
Annual Fee
$35
Intro APR
Purchases: N/A
Ongoing APR
17.39%, variable
Welcome Bonus
N/A
Highlights
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A secured credit card is a credit card that requires a security deposit. It's designed to help cardholders build or rebuild credit. These cards typically come with very low credit limits. As a result, it's easy to gain approval for them -- even with bad or no credit.
Secured credit cards are a good idea when you're looking to build or rebuild credit. They're especially helpful if you can't qualify for an unsecured credit card. Once you understand how credit cards work, the following will help you decide if a secured credit card is right for you.
Here's what you should look for:
Secured credit cards are an excellent tool for building credit, as long as you use them properly. Make sure you understand how to increase your credit score before diving into the world of secured credit cards.
Getting a secured credit card is a fairly easy process. While approval is never guaranteed, most issuers approve applicants regardless of credit history.
If you don't receive an instant decision when you apply for a secured credit card, don't panic. You should receive one by phone or mail within seven to 10 business days. Once you've been approved, it typically takes another seven to 10 business days for your new secured credit card to arrive.
You'll want to upgrade your secured card to an unsecured credit card as soon as possible. This means knowing how to upgrade a credit card is important. Upgrading, rather than applying for a new credit card, can improve your chances of approval. It will also help keep your credit score intact.
A credit card for bad credit is also worth considering. Some of the best credit cards for bad credit don't require a security deposit at all. That said, the ones that don't require a security deposit often charge an annual fee instead. Other times, they're harder to get if you have serious negative marks on your credit.
Another option is to apply for an unsecured credit card with a cosigner. Your cosigner functions as a guarantor for you. If you miss your credit card payments, they can be held liable for repaying your debt. This responsibility is not to be taken lightly. If you find someone who trusts you enough to co-sign your credit card application, you might be able to qualify for an unsecured credit card with better terms and lower fees.
If you're a student working on building credit from scratch, you should also consider the best credit cards for students. Many of these credit cards don't require a lengthy credit history or a security deposit. Some even come with rewards geared toward a student lifestyle.
A secured credit card is a credit card for people with bad credit or no credit that requires a refundable security deposit to act as collateral.
The best secured credit cards have low security deposit requirements, no annual fee, access to a free credit score, and the ability to eventually upgrade to an unsecured version.
Secured credit cards are a good idea for anyone who wants to improve their credit score and can't qualify for an unsecured credit card.
Card | Rating | Great For |
---|---|---|
Rating image, 5.00 out of 5 stars.
|
Great For: Cash back |
|
U.S. Bank Secured Visa® Card ![]() |
Rating image, 4.00 out of 5 stars.
|
Great For: High secured credit limit |
Rating image, 4.50 out of 5 stars.
|
Great For: Low security deposit |
|
OpenSky® Secured Visa® Credit Card ![]() |
Rating image, 4.00 out of 5 stars.
|
Great For: No credit check |
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