If you have a bad credit score but still want to have a credit card then a secured credit card is the right choice for you. Where most credit card companies do not give credit cards to bad credit holders, you can get a credit card by paying a certain security deposit.
In this article, we are going to tell you about the best Secured credit cards that you can easily get, even if you have a poor credit score. We will also tell you about the application process and how you can improve your credit score. Read the whole article to know it all.
What is a Secured Credit Card?
Before applying for a secured card, you must first understand what a secured credit card is. To get this card, first, you need to pay a security deposit to the credit card company. This security deposit can be between $200 to $3,000, depending upon your credit score.
Your credit limit also depends on your security deposit and many credit card companies keep your credit limit equal to your security deposit. The main purpose of this security deposit is that, if you fail to pay your credit bill on time then they can keep your security deposit and will discontinue their service from next month.
Secured credit cards are specially for people with bad credit scores. Credit card companies do not want to risk their money on bad credit holders so they ask for a security deposit which they can keep if anyone fails to pay the credit card bills on time.
If you maintain a good credit score then you get an opportunity to upgrade your secured card to an unsecured one. After this upgrade, you can also get your security deposit back.
- People with bad credit scores can easily get this credit card.
- You can get your security deposit back if you maintain the card well.
- Low annual fee.
- Immediate credit reporting to the credit bureaus.
10 Best Secured Credit Cards for You
Now that you have all the necessary information about these cards, in this section, we will tell you about the best credit cards that are secured. We will also cover secured credit cards for bad credit holders. So let’s get started.
1. Discover it Secured Credit Card
Our Rating: 4.8/5
Hands down, Discover it Secured is the best-secured card out there, simply because it is a very versatile card. Where other secured cards offer fewer rewards, the Discover it Secured card gives you rewards on almost all your necessary purchases like gas, groceries, restaurants, hotel bookings, etc.
You can upgrade your Discover It secured card to an unsecured one, only after paying the bills on time for 7 months continuously. It also provides you with tools to keep a track of your credit score for free.
- No annual fee.
- High rewards and cash backs.
- Easy application and qualification.
- You can upgrade this card by paying bills on time.
- The intro APR is low.
2. OpenSky Secured Visa
Our Rating: 4.0/5
OpenSky is a pretty famous credit card because it does not need a credit check. They usually provide credit cards, even to bad credit holders, without conducting a hard inquiry into their credit history.
To get this card, you will have to pay a minimum security deposit of $200, but this amount can be high if your credit score is really bad. Also, your credit limit is equally proportional to your security deposit, so if you want a high credit limit then you will have to make a higher security deposit.
- The APR is low.
- This card is great for building credit.
- People with bad credit can easily qualify for an OpenSky card.
3. BankAmericard Secured Credit Card
Our Rating: 4.1/5
Do you know what is the best thing about a BankAmericard Secured Credit Card? You can get this credit card, even if you do not have an account with Bank of America. There is no annual fee and the minimum security deposit is just $200.
They also provide you with free tools to track your monthly credit activity. You can also use their mobile application to manage your account and keep a track of all your spending through their card. They also offer zero liability in case you become a victim of any monetary fraud or identity theft.
- No annual fee.
- Fee credit tracking.
- The credit limit is pretty flexible.
- Zero liability in case of fraud.
4. Self Visa Credit Builder Card
Our Rating: 3.8/5
You will need a credit-builder account to have Self Visa Credit Builder card. When you have both, a credit builder account and a Self account then you get double the benefit with your credit score. You can definitely go with this card to improve your credit score. The minimum deposit is also just $100, which is very less compared to the other cards.
- It helps you build your credit.
- It does not need a credit check.
- People with bad credit scores can also qualify for this card.
5. Citi Secured MasterCard
Our Rating: 3.8/5
If your credit score is above 300, you can easily apply for Citi Secured Credit Card. The annual fee is zero and the minimum security deposit is just $200. They provide the highest credit limit of $2,500. You can apply for a credit limit increase when you pay the credit card bills on time for some months. Every month, you get free FICO points, which allows you to track your credit activity and see your credit score for free.
- Credit activity reporting to all three bureaus.
- No annual fee at all.
- Good for credit building.
6. First Progress Platinum Prestige MasterCard Secured Credit Card
Our Rating: 4.1/5
First Progress Platinum Prestige MasterCard is the best card for guaranteed approval with a $1000 limit for bad credit. It comes with a low-interest rate as well as a maximum credit limit of $2,000. To get this card, you will have to make a minimum deposit of $200.
- You can get your security deposit back.
- Low-interest rate and APR.
- No hard inquiry of your credit history.
7. Bank of America Customized Cash Rewards Credit Card
Our Rating: 4.4/5
Bank of America Customized Cash Rewards Credit Card is one of the best cards for credit building. This card comes with zero annual fees and you can add this credit card to your money payment applications like Samsung Pay, Apple Pay, and Google Pay. The Bank of America Customized Cash Rewards credit card offers you 3% cash back on your favorite category like gas or restaurants and 2% cash back on other categories like groceries.
- No annual fee.
- 3% cash back on your favorite category.
- 2% on all daily-use items.
- This card helps you build your credit.
8. Capital One QuickSilver Secured Cash Rewards Credit Card
Our Rating: 3.7/5
The best part about Capital One QuickSilver Secured Cash Rewards Credit Card is that there are no hidden charges or annual charges. You get to maintain your card for free. It also comes with zero liability in case of fraud or identity theft with the card owner. You can get up to 5% cash back on rental car bookings and hotel bookings if you do the booking via Capital One Travel.
- Zero annual fees.
- 1.5% cash back on eligible purchases.
- Zero fees on foreign transactions.
- 5% cash back on bookings through Capital One Travel.
9. Petal 1 “No Annual Fee” Visa Credit Card
Our Rating: 3.5/5
Do you know what is the best thing about Petal 1 “No Annual Fee” Visa Credit Card? It comes with zero security deposit for good credit holders. If you have a good credit score then you can get this secured credit card without actually paying the security money. Though if the credit score is bad, you might have to pay the security deposit.
- Zero annual fees.
- No security deposit for good credit holders.
- Immediate credit activity reporting to the bureaus.
10. U.S. Bank Cash+ Visa Secured Card
Our Rating: 3.4/5
If you are looking for the best Secured credit card with a lot of rewards then U.S. Bank Cash+ Visa Secured Card is the right choice for you. You get this card with zero annual fees and a handful of benefits. You get 5% on your first $2000 spent on 2 categories that you choose. After this, you can select any category like fuel, restaurant, or anything else for 2$ cash back. You also get 1% cash back on other eligible things.
- Many rewards and cash backs.
- Zero annual fees.
- You get to select the categories on which you want the rewards and cash back.
How is a Secured Card Different from an Unsecured Credit Card?
You must be wondering, why are we focusing so much on a secured card and how is it different from an unsecured card? Well, as the name suggests, a secured card needs a security deposit, whereas an unsecured card does not need a security deposit.
A secured credit card is an opportunity for people with bad credit scores to get a credit card. The thing is, credit card companies believe that they are risking their money by giving credit cards to people with a bad credit history. So in return for giving the credit card, they ask for a security deposit, which they can keep if the card owner fails to pay the credit card bill.
Unsecured credit cards are generally given to people with good credit scores because there are fewer chances of risk and loss for credit card companies. You can later convert your secured card to an unsecured one, by leaving a balance on your credit card and paying the bills on time. Most of the time, the security deposit is refundable.
How to Get a Secured Credit Card?
By following the simple steps given below, you can get these cards.
1. Select the Companies
First of all, check your credit score. After this, make a list of the companies that can give you a credit card with that credit score.
2. Compare the Rate
Now that you know which companies can give you a credit card, compare their interest rates and other fees. Consider all the things like rewards, interest rates, APR, cash back, etc.
3. Send Your Application
After comparing the interest rates and everything, you must have decided which card you want to go for. Send your application to those companies. You can also send credit card applications to 2-3 companies and then go with the one after seeing their APR, security deposit, and other charges.
4. Pay the Security Deposit
Once your credit card application is approved, you will have to pay the security deposit for the card. Be cautious here, because your credit limit will depend on your security deposit. If you want a card with a higher credit limit, you can ask the credit card company if they can increase your credit limit on paying more security.
5. If Failed, Try Again
If your credit card application is denied, try some other company. You will definitely get a credit card from one or the other company.
How to Boost Credit Score With a Secured Credit Card?
You can follow these simple procedures to increase your credit score with a secured card.
1. Maintain Your Card
In order to upgrade your secured card to an unsecured one and then earn more credit scores, make sure that you maintain your card well. Pay the bills on time. Never exceed your credit limit.
2. Pay the Bills on Time
This factor adds up to 30% of your credit score. So make sure that you pay all the credit card bills on time. You can also sign up for the automatic transaction option if you forget to pay the bills on time.
3. Leave a Balance on Your Credit Card
In order to boost your credit score, you must maintain your credit utilization. Make sure that you leave some balance on your credit card and do not use the complete limit of your credit card.
Other Alternatives for a Secured Credit Card
If you fail to get these cards, or do not want to own a secured card in the first place then you can go with any of the following options for your urgent money needs.
1. Prepaid Debit Cards
If you do not care about your credit score and just need a card to make your everyday transactions then you can go with a prepaid debit card. Not just this, but you can also use debit cards to withdraw money from any ATM near you.
For this card, first, you need to deposit the money into your card, and then later you can use that money. You can also directly connect your debit card to your bank account and use the money that is already deposited into your bank account.
2. Bad Credit Unsecured Cards
In case you have a really bad credit score but still want to go with an unsecured credit card then you can go with bad credit unsecured credit cards. But the interest rate, APR, annual fee, and other fees might be high for these cards.
FAQs: Frequently Asked Questions
Q1. How much will a secured credit card raise my score?
Your credit score depends less on your card type and more on how you maintain your card. If you want to increase your credit score with a secured card then make sure that you maintain your card well.
Go with the card that immediately reports all your credit activities to the credit bureaus. Also, make sure that you pay your credit card bills on time and leave a balance on your card. By following these simple steps, your credit score will rise well with a secured card.
Q2. How long does it take to build credit with a secured credit card?
If you maintain your card, pay the bills on time, and leave a balance on your card then you can start building your credit within one to two months. As we told you, it’s all about how well you maintain your credit card. Getting a credit card is easy, maintaining it is the real task.
Q3. How to use a secured credit card with a $200 limit?
In case the credit limit of your credit card is just $200, only buy essential things like groceries, and fuel, where you get cash back or rewards on using your credit card. You can use a debit card for other transactions. Pay the bills on time and soon you will be able to upgrade your card and increase your credit limit.
Q4. What is the difference between secured and unsecured credit cards?
The main difference between a secured and an unsecured credit card is, you have to pay a security deposit on a secured card and there is no such security deposit for unsecured cards. Secured cards are usually offered to people with a bad credit score where they have to pay a security amount. So, if a secured card owner fails to pay the credit card bill, the credit card company can keep the security deposit amount.
Q5. How to close a secured credit card?
There are 2 ways to close a secured card, one is to upgrade it to an unsecured card and the second is to actually close it. Usually, when you maintain your card well and pay all the bills on time, the credit card company offers you to upgrade your card. If you want then you can upgrade your card. Otherwise, you can call your credit card company and tell them that you want to discontinue their service. They will conduct a proper examination and if no bill is left then they will close your card.
Q6. How many secured cards should I have?
You can have as many secured cards as you want, but we would suggest you have just one or two secured cards. Because if you have more secured cards, you will have to pay more security deposit. And it can be really difficult to maintain those cards and pay the bills on time.
Instead, it is better to have just one or two secured cards and maintain them well and increase your credit score. Once you have a good credit score, you can get a new unsecured card or upgrade the old one.
A secured credit card is always a good option for people with bad credit. The money you deposit to the credit card company acts as a security. In case you do not pay your credit card bill, they keep your money. Usually, this security deposit is refundable. Once you upgrade your secured card to an unsecured credit card, you get the security money back.
- Elizabeth Jones is one of our editorial team’s leading authors on credit card offers, services & more. With over two decades of experience in the consumer credit industry and as a nationally recognized credit expert, Elizabeth provides in-depth analysis of both traditional & alternative forms of credit. Elizabeth regularly appears on many major media outlets including NBC Nightly News, Fox Business Network, CNBC & Yahoo! Finance. She is also a frequent contributor to Forbes Magazine. As a highly appreciated author for our exclusive Editorial Team, Elizabeth strives to provide readers with a trustworthy advice on how to manage their credit accounts while staying informed on the latest offers in the marketplace.
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