10 Best Secured Credit Cards for Bad Credit
10 Best Secured Credit Cards for Bad Credit
Secured Credit Cards are designed for individuals who have poor or no credit history. These cards require a cash deposit as collateral, which typically serves as your credit limit. For example, if you deposit $500, you may be given a $500 credit limit. While secured cards work similarly to regular credit cards, the key difference is that they require a security deposit to open the account, reducing the risk for the issuer. This makes them an excellent option for those who are looking to rebuild their credit score or establish a credit history from scratch.
The primary benefit of Secured Credit Cards is that they provide a pathway to improving your credit score. By using the card responsibly and making on-time payments, you can show lenders that you are capable of managing credit, which may help you qualify for unsecured cards in the future. Additionally, many secured cards report to the major credit bureaus, allowing you to build or rebuild your credit history. Some cards also offer rewards programs or low annual fees, making them even more attractive for those seeking financial flexibility. Below is a list of the 10 Best Secured Credit Cards for Bad Credit that can help you get back on track financially.
1.
Discover it® Secured Credit Card
The Discover it® Secured Credit Card is designed to help individuals build or rebuild their credit by using a secured deposit as collateral. It functions like a traditional credit card, offering rewards and credit-building opportunities, with the added security of a refundable deposit.
Earn Cash Back: Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter (1% on all other purchases).
Cash Back Match: At the end of your first year, Discover will match all the cash back you’ve earned. This effectively doubles your rewards in the first year.
No Annual Fee: There’s no annual fee for this secured card, making it affordable for individuals with limited credit histories.
Building Credit: Your account activity is reported to the three major credit bureaus, helping you establish or improve your credit score.
No Foreign Transaction Fees: Ideal for international purchases or travel.
Refundable Deposit: Your security deposit is refundable if you close your account in good standing.
Cash Back Match: At the end of your first year, Discover will match all the cash back you’ve earned. This effectively doubles your rewards in the first year.
No Annual Fee: There’s no annual fee for this secured card, making it affordable for individuals with limited credit histories.
Building Credit: Your account activity is reported to the three major credit bureaus, helping you establish or improve your credit score.
No Foreign Transaction Fees: Ideal for international purchases or travel.
Refundable Deposit: Your security deposit is refundable if you close your account in good standing.
Discover it® Secured Credit CardCheck HereDiscover it® Secured Credit Card - - A secured credit card that offers 2% cashback at gas stations and restaurants (up to $1,000 in combined purchases each quarter) and 1% on all other purchases. The cashback is matched at the end of your first year, and there's no annual fee.
Pros
Cash Back Rewards: Earn 2% cash back on gas and restaurant purchases, which is a significant benefit for a secured card.- Cash Back Match: The first-year cash back match can be a huge bonus for cardholders, potentially doubling the value of your rewards.
- No Annual Fee: There is no annual fee, which is uncommon for secured credit cards and makes this card very affordable.
- Credit Building: It’s a great option for individuals who are looking to improve their credit score over time.
- No Foreign Transaction Fees: This is a major advantage for individuals who travel internationally.
- Refundable Deposit: Your security deposit is refundable, and can be used to help increase your credit limit after several months of good behavior.
Cons
Requires a Deposit: A minimum deposit of $200 is required to open the card, which may not be ideal for everyone.- Limited Rewards on Other Purchases: Outside of gas and restaurant spending, you only earn 1% cash back, which is standard for most credit cards but less rewarding than some non-secured options.
- Low Credit Limit: Your credit limit is determined by your deposit, and may not be sufficient for larger purchases.
Key Features
2% cash back at gas stations and restaurants on up to $1,000 in combined purchases per quarter (1% on all other purchases)
Cash Back Match at the end of your first year
No annual fee
No foreign transaction fees
Refundable deposit (starting at $200)
Reports to all 3 major credit bureaus
Cash Back Match at the end of your first year
No annual fee
No foreign transaction fees
Refundable deposit (starting at $200)
Reports to all 3 major credit bureaus
Why Is Recommended
The Discover it® Secured Credit Card is ideal for individuals looking to rebuild or establish their credit while earning rewards. The card offers strong cash-back incentives, including the 2% on gas and restaurant purchases, which is uncommon for secured cards. The first-year cash-back match further boosts the card's value. Plus, the lack of an annual fee and foreign transaction fees makes it an affordable and practical option for building credit. It’s an excellent choice for those who want to improve their credit score without sacrificing rewards.
2.
Capital One® Secured Mastercard®
The Capital One® Secured Mastercard® is a secured credit card designed to help individuals build or rebuild their credit. It requires a refundable security deposit that serves as your credit limit. The card reports your payment activity to the major credit bureaus, helping you establish or improve your credit score when used responsibly.
No Annual Fee: The card does not charge an annual fee, which is a significant advantage over many other secured cards.
Access to a Higher Credit Line: After making your first five monthly payments on time, you may be eligible for a higher credit line with no additional deposit required.
Reports to Major Credit Bureaus: It reports to all three major credit bureaus—Equifax, Experian, and TransUnion—helping you build or improve your credit score.
Refundable Security Deposit: Your deposit is refundable when you close the account in good standing, or you may receive the deposit back if you're upgraded to an unsecured card.
No Foreign Transaction Fees: You can use the card for international purchases without incurring foreign transaction fees.
Access to CreditWise® from Capital One®: This free tool helps you track your credit score and provides insights into how your credit behavior can impact your score.
Access to a Higher Credit Line: After making your first five monthly payments on time, you may be eligible for a higher credit line with no additional deposit required.
Reports to Major Credit Bureaus: It reports to all three major credit bureaus—Equifax, Experian, and TransUnion—helping you build or improve your credit score.
Refundable Security Deposit: Your deposit is refundable when you close the account in good standing, or you may receive the deposit back if you're upgraded to an unsecured card.
No Foreign Transaction Fees: You can use the card for international purchases without incurring foreign transaction fees.
Access to CreditWise® from Capital One®: This free tool helps you track your credit score and provides insights into how your credit behavior can impact your score.
- Capital One® Secured Mastercard®Check Here
Capital One® Secured Mastercard® - - A simple and effective card to help rebuild credit with a low minimum deposit and no annual fee. Offers the possibility of a higher credit limit after making your first five monthly payments on time.
Pros
- No Annual Fee: This is one of the most attractive features of the card, making it a low-cost option for building credit.
- Potential for Credit Line Increase: You may be able to increase your credit limit after making timely payments, offering flexibility as your credit improves.
- Reports to All 3 Major Credit Bureaus: This ensures that your responsible behavior will be reflected in your credit report.
- No Foreign Transaction Fees: A rare perk for secured cards, making it ideal for international travel.
- Low Minimum Deposit: The minimum security deposit requirement is as low as $49, making it accessible for many people.
Cons
- Requires a Deposit: The security deposit requirement might be a barrier for some applicants, especially those with limited funds.
- Limited Rewards: The card does not offer a rewards program, so there is no opportunity to earn points or cash back.
- Relatively Low Credit Limit: Your credit limit is initially tied to the amount of your deposit, which can be limiting for individuals with higher spending needs.
Key Features
No annual fee
Potential for a higher credit limit with no additional deposit
Refundable security deposit
Reports to all 3 major credit bureaus
No foreign transaction fees
Access to CreditWise® to track your credit score
Low minimum deposit of $49, $99, or $200, based on creditworthiness
Potential for a higher credit limit with no additional deposit
Refundable security deposit
Reports to all 3 major credit bureaus
No foreign transaction fees
Access to CreditWise® to track your credit score
Low minimum deposit of $49, $99, or $200, based on creditworthiness
Why Is Recommended
The Capital One® Secured Mastercard® is recommended for individuals looking to build or rebuild their credit while avoiding the high fees often associated with secured cards. The no annual fee, low deposit requirement, and potential for a credit limit increase make it an attractive choice for those with limited funds or poor credit histories. Additionally, the card’s ability to help improve credit by reporting to all three bureaus and offering access to free credit monitoring through CreditWise® makes it an excellent tool for credit building.
3.
OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card is a secured credit card designed to help individuals build or rebuild their credit. It requires a refundable security deposit that determines your credit limit. The card functions like a standard credit card and reports to all three major credit bureaus, helping users improve their credit scores with responsible usage.
No Credit Check: The card doesn’t require a credit check for approval, making it accessible for those with no credit or poor credit history.
Reports to All 3 Major Credit Bureaus: It helps you build or rebuild your credit by reporting your payment history to Experian, Equifax, and TransUnion.
Flexible Deposit Amount: You can choose your security deposit, with a minimum of $200, up to $3,000, allowing you to control your credit limit.
Builds Credit: Helps establish or improve your credit score with responsible card use.
Worldwide Acceptance: As a Visa card, it is accepted at millions of locations worldwide, both online and in-store.
No Annual Fee for the First Year: The card offers a $0 annual fee for the first year, which is a great benefit when compared to other secured cards with annual fees.
Reports to All 3 Major Credit Bureaus: It helps you build or rebuild your credit by reporting your payment history to Experian, Equifax, and TransUnion.
Flexible Deposit Amount: You can choose your security deposit, with a minimum of $200, up to $3,000, allowing you to control your credit limit.
Builds Credit: Helps establish or improve your credit score with responsible card use.
Worldwide Acceptance: As a Visa card, it is accepted at millions of locations worldwide, both online and in-store.
No Annual Fee for the First Year: The card offers a $0 annual fee for the first year, which is a great benefit when compared to other secured cards with annual fees.
- OpenSky® Secured Visa® Credit CardCheck Here
OpenSky® Secured Visa® Credit Card - - A secured card that doesn't require a credit check to apply. While it does have an annual fee, it is a great option for individuals with poor or no credit history looking to rebuild.
Pros
- No Credit Check for Approval: This makes the card accessible to those who may not qualify for other cards due to poor credit.
- Reports to All Major Bureaus: This is a key advantage for individuals who want to improve their credit score.
- Flexible Deposit: You can choose the amount of your security deposit, which can be a helpful way to manage your credit limit.
- No Annual Fee for the First Year: The first-year fee waiver makes the card more affordable, especially when compared to other secured cards.
- Widely Accepted: As a Visa card, it is accepted by a large network of merchants globally.
Cons
- Requires a Deposit: The card requires an upfront deposit, which may not be ideal for everyone, especially those with limited funds.
- Annual Fee After First Year: After the first year, the card charges a $35 annual fee, which is a downside compared to some no-fee secured cards.
- No Rewards Program: Unlike some secured cards, the OpenSky® Secured Visa® Credit Card does not offer a rewards program, limiting its long-term value for some users.
Key Features
No Credit Check for Approval
Reports to all 3 major credit bureaus
$0 annual fee for the first year
Flexible security deposit (minimum $200, up to $3,000)
No rewards program
$35 annual fee after the first year
Visa global acceptance
Reports to all 3 major credit bureaus
$0 annual fee for the first year
Flexible security deposit (minimum $200, up to $3,000)
No rewards program
$35 annual fee after the first year
Visa global acceptance
Why Is Recommended
The OpenSky® Secured Visa® Credit Card is recommended for individuals looking to build or rebuild their credit, especially those who may have difficulty qualifying for other cards due to poor or limited credit history. Its lack of a credit check makes it a good option for those with no credit or low scores. The flexibility in deposit amount and the first-year annual fee waiver adds extra value, making it an affordable way to improve your credit over time.
4.
Secured Mastercard® from Capital One
- Secured Mastercard® from Capital OneCheck Here
Secured Mastercard® from Capital One - - A no-frills secured card that allows you to start building credit with a refundable security deposit. It has a relatively low annual fee and offers access to higher credit limits with responsible use.
5.
Indigo® Platinum Mastercard® Secured Credit Card
- Indigo® Platinum Mastercard® Secured Credit CardCheck Here
Indigo® Platinum Mastercard® Secured Credit Card - - Ideal for people with bad credit, this card offers a quick application process and reports to the three major credit bureaus. There is an annual fee, but it is a great way to get started with rebuilding your credit.
6.
Green Dot® Secured Credit Card
- Green Dot® Secured Credit CardCheck Here
Green Dot® Secured Credit Card - - This secured card charges no annual fee and offers a low deposit requirement to help you get started with rebuilding your credit. It's a good option for individuals with poor credit who want a straightforward, low-cost card.
7.
Self® Credit Builder Account Secured Visa® Credit Card
- Self® Credit Builder Account Secured Visa® Credit CardCheck Here
Self® Credit Builder Account Secured Visa® Credit Card - - A secured card linked to a Credit Builder Account that helps users build both credit and savings. There's an annual fee, but it offers a unique combination of credit-building and saving.
8.
BBVA Secured Visa® Credit Card
- BBVA Secured Visa® Credit CardCheck Here
BBVA Secured Visa® Credit Card - - A low-cost secured credit card with a reasonable minimum deposit requirement. No annual fee and a simple way to improve your credit profile over time.
9.
US Bank Secured Visa® Card
- US Bank Secured Visa® CardCheck Here
US Bank Secured Visa® Card - - A secured card offering the flexibility of choosing your own deposit amount (which becomes your credit limit). The card reports to the three major credit bureaus, making it a good option for rebuilding credit.
10.
Credit One Bank® Secured Visa® Credit Card
- Credit One Bank® Secured Visa® Credit CardCheck Here
Credit One Bank® Secured Visa® Credit Card - - This card offers a modest annual fee but also provides opportunities to earn cashback rewards on eligible purchases. It's a good option for those looking to earn rewards while improving their credit score.
Conclusion
Secured Credit Cards are an excellent tool for individuals with bad credit or no credit history looking to rebuild their credit score. Cards like the Discover it® Secured Credit Card and Capital One® Secured Mastercard® offer valuable rewards and no annual fee, making them great options for users who want to rebuild their credit without paying excessive fees. For those who are willing to pay a small annual fee, the OpenSky® Secured Visa® and Indigo® Platinum Mastercard® Secured Credit Card provide flexible and accessible ways to improve credit. Ultimately, the best secured credit card for you will depend on your specific financial needs, such as how much you're willing to deposit, your preference for rewards, or your ability to manage annual fees. Whichever card you choose, responsible use will help you make significant strides toward rebuilding your credit and improving your financial future.