[Disclosure: Cards from our partners are reviewed below.]
Secured credit cards are great for those who want to improve their bad or nonexistent credit. Because they require a security deposit to open—which may also act as your credit limit while you build up better credit—they’re easier to qualify for than traditional credit cards. Once a secured card is in your pocket, you can use it to make purchases and build credit just like an unsecured card.
Making timely payments on a secured card can help you build a great credit score. But some cards go the extra mile with policies that reward responsible card use and timely payments.
Here are our top three secured credit cards with incentives for responsible use.
Sign-Up Bonus: None
Annual Fee: $0
Annual Percentage Rate (APR): Variable 24.99% APR on purchases.
Why We Picked It: A short initial period of timely payments can get you access to a credit limit increase with no additional deposit required.
Responsibility Reward: Depending on your credit, Capital One’s secured card will require a $49, $99, or $200 security deposit for an initial credit line of $200. After five months of on-time payments, Capital One may increase your credit limit with no additional deposit required.
Drawbacks: The APR is pretty high, even for a secured card.
Rewards: 2% cash back on up to $1,000 in quarterly gas and restaurant purchases; 1% cash back on other purchases.
Sign-Up Bonus: First-year cash back matching.
Annual Fee: $0
APR: Variable 23.99% APR on purchases; 10.99% APR for six months on balance transfers, then variable 23.99% APR.
Why We Picked It: This card offers a way to earn back your initial deposit.
Responsibility Reward: Your initial security deposit is equal to your credit limit—for instance, a $500 security deposit will get you a $500 credit limit. After eight months, Discover will begin a monthly account review and may refund your security deposit if you meet its qualifications.
Drawbacks: If you don’t spend much on gas or dining, you won’t earn as much cash back.
3. BankAmericard Secured Credit Card
Sign-Up Bonus: None
Annual Fee: $39
APR: Variable 21.24% APR on purchases and balance transfers.
Why We Picked It: A year of responsible use could help you recover your security deposit.
Responsibility Reward: This card requires a security deposit of at least $300, and your initial credit line is equal to the deposit amount. After a year, Bank of America will review your account and overall credit history and may refund your security deposit.
Drawbacks: There’s a $39 annual fee.
How to Choose a Secured Credit Card
With any secured credit card, your primary focus should be building credit. Pick a card that helps you make timely payments and maintain a low balance. If you can, you should avoid cards with high annual fees or lofty interest rates (although high APRs do tend to come with the territory).
Determine the security deposit you can reasonably afford and look for a card that will accept that amount. While most secured cards will extend an initial credit line equal to your deposit, some may extend a higher limit right out of the gate.
While you should do your due diligence, don’t be discouraged if a credit card issuer doesn’t explicitly state that it will refund your deposit or increase your credit line over time. Many credit card issuers are willing to negotiate these terms with responsible customers over the phone. Over time, you may even be able to get an unsecured card with better rewards and lower interest rates.
What Credit Is Required for a Secured Credit Card?
Consumers with poor or nonexistent credit can qualify for secured credit cards, but approval isn’t a sure thing. To increase your odds of success, you should check your credit score before you apply. You can check your credit report free at Credit.com.
At publishing time, the Capital One Secured Mastercard and Discover it Secured Credit Card are offered through Credit.com product pages, and Credit.com is compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment. This content is not provided by the card issuer(s). Any opinions expressed are those of Credit.com alone, and have not been reviewed, approved, or otherwise endorsed by the issuer(s).
Note: It’s important to remember that interest rates, fees, and terms for credit cards, loans, and other financial products frequently change. As a result, rates, fees, and terms for credit cards, loans, and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees, and terms with credit card issuers, banks, or other financial institutions directly.