Secured Credit Cards

A secured credit card is a type of credit card for people with limited or damaged credit that requires the user to place a refundable security deposit, which the card’s issuer holds as collateral until the account is closed. The deposit for a secured card reduces the issuer’s risk and leads to higher approval odds for applicants. Plus, secured credit cards don’t need to charge the same high fees as unsecured credit cards for bad credit because issuers can keep the deposit money if something goes wrong.

A secured credit card can help you build or rebuild your credit, just like a “normal credit card.” The one thing a secured credit card generally won’t give you is the ability to actually borrow money. Most secured credit cards are fully secured, which means your spending limit will equal your deposit amount.

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If you are denied for a secured credit card, you could apply for a different secured card (one with a higher approval rate), become an authorized user on someone else’s credit card account, or apply for a credit-builder loan. Some secured credit cards don’t even check your credit when you apply. So you will only be turned down if you do not have a U.S. mailing address, a Social Security number (or Individual Taxpayer Identification Number), or enough money to fund your deposit and make monthly payments.

In general, secured credit cards are much easier to get than unsecured cards because they require a refundable deposit that also serves as your credit limit. Because there’s less risk for the issuer, secured cards are able to offer nearly guaranteed approval, even to people with damaged credit. But that doesn’t mean everyone is accepted, and some secured cards are easier to get than others.

Typically, if you’re denied for a secured credit card, the card’s issuer will send you a letter explaining why. That can be a good place to start when determining your next steps.

What to do if you’re denied for a secured credit card:

• Apply somewhere else. Just because you didn’t meet one credit card company’s requirements doesn’t necessarily mean you’re disqualified from every secured card on the market. In particular, make sure to check out credit cards with no credit check.
• Become an authorized user. If someone adds you to their account as an authorized user, you’ll get a card and be able to make charges, but the primary cardholder will be responsible for paying the bills. And if they pay on time, your credit standing will improve.
• Apply for a credit-builder loan. Many credit unions and banks offer small loans to help people build or rebuild their credit. Much like a secured card, you’ll need to make a deposit when you apply for a so-called credit-builder loan.
• Focus on your open accounts. If you have a mortgage, student loan, auto loan, or line of credit, making your payments on time will help build up your credit score. That will make it easier to get approved for a credit card.

Why was I denied for a secured credit card?

The most common reasons people are denied for a secured credit card include having a bankruptcy or tax lien on their credit report, not having enough income to meet their monthly obligations, and having an extremely low credit score. Past delinquencies with the issuing bank, current delinquencies anywhere, and invalid application information could all be reasons as well.

The specifics vary by card, though. So, if you were denied for a secured credit card, don’t lose hope. Just apply for one of the several secured cards with no credit check, and manage your account responsibly once you’re approved. You can also sign up for WalletHub’s free credit analysis for additional help getting your credit score back on track.

The best secured credit card to rebuild credit is the Secured Mastercard® from Capital One because of its low deposit requirement and $0 annual fee. The deposit is $49, $99 or $200, depending on your credit standing, but you’re guaranteed a $200 credit limit.

Another one of the best secured credit cards to rebuild credit is the OpenSky® Secured Visa® Credit Card. It doesn’t even require a credit check when you apply, which makes it great for rebuilding really bad credit. Or, if you want to enjoy some perks while you rebuild, Discover it® Secured Credit Card is a rare secured card with rewards. You get 1 - 2% cash back on your purchases.

To be clear, all major secured credit cards can help you rebuild your credit. They all report account information to the major credit bureaus every month. And all those with low annual fees and low deposit requirements are in the running for the top spot. But the Discover it Secured Credit Card, Capital One Secured and OpenSky each bring something special to the table.

Here are the best secured credit cards to rebuild credit:

• Best for Rewards: Discover it® Secured Credit Card – $0 annual fee. $200 deposit required. 2% cash back on your first $1,000 per quarter at gas stations and restaurants combined. 1% cash back on all other purchases. Rewards matched after your first year. Reports to all 3 major credit bureaus.
• Best for a Low Deposit: Secured Mastercard® from Capital One – $0 annual fee. $49, $99 or $200 deposit required. $200 minimum credit line guaranteed. No rewards. Reports to all 3 major credit bureaus.
• Best for No Credit Check: OpenSky® Secured Visa® Credit Card – $35 annual fee. $200 minimum deposit. No rewards. Reports to all 3 major credit bureaus.
• Best for low APR: First Progress Platinum Prestige Mastercard® Secured Credit Card – $49 annual fee. $200 minimum deposit. No rewards. Reports to all 3 major credit bureaus.

There are a few more cards that belong among the best secured credit cards to rebuild credit with, too. The Harley-Davidson® Secured Credit Card and the First National Bank of Omaha Secured Visa® Card don’t charge annual fees. And that’s one of the most important things to look for in a secured credit card.

The Applied Bank® Secured Visa® Gold Preferred® Credit Card also has a low APR, at 9.99%. But you probably don’t want to carry a balance from month to month with a secured credit card. It basically means paying interest on a loan you’ve given yourself, since you pre-pay your spending limit.

Choosing the best secured credit card to rebuild credit is only the first step toward actually rebuilding. You must also use that card responsibly month after month so that positive information flows to the credit bureaus. Regularly adding positive information to your credit reports gradually covers up the negative past records.

Your card will report positive information as long as you pay your bill on time every month. Using less than 30% of your spending limit each month or paying multiple times per month can also too. But if you really want to rebuild your credit, you’ll need to get the rest of your finances in order as well. That means paying down debt, catching up on past-due accounts and steering clear of collections accounts.

Secured credit card approval is pretty easy to come by, no matter which card you apply for. A secured card is the easiest type of credit card to get simply because you have to place a refundable security deposit, the amount of which usually becomes your spending limit. As a result, secured cards prevent you from spending more than you put down, making it less risky for credit card companies to approve people with damaged credit. And since you pretty much pre-pay for your purchases with a secured card, past payment problems should not keep you from getting approved.

Given their safeguards, you might assume that secured credit cards offer guaranteed approval. But that’s not the case. There are certain requirements that anyone must satisfy to get a credit card.

Here are the basic secured credit card approval requirements:

• 18+ years old
• $200+ for a refundable security deposit
• Enough income for monthly bill payments
• U.S. mailing address
• Social Security number (ITIN or passport accepted in some cases)

Some secured credit cards are harder to get than others, though. Requirements vary by credit card company. And some issuers won’t approve anyone with a non-discharged bankruptcy, a tax lien or certain other types of negative records on their credit report. 

But there’s a flip side to that, too. Secured credit card approval is very easy to get if you choose the right offer. A handful of cards don’t even do a credit check when you apply.

Here are the best easy approval secured credit cards:

• First Progress Platinum Select Secured Credit Card: No credit check. $200 minimum deposit. $39 annual fee. Reports to all 3 bureaus.
• OpenSky Secured Visa Credit Card: No credit check. $200 minimum deposit. $35 annual fee. Reports to all 3 bureaus.
• Applied Bank Secured Visa Gold Preferred Card: No credit check. $48 annual fee. Reports to all 3 bureaus.
• First Progress Platinum Prestige Secured Credit Card: No credit check. $49 annual fee. $200 minimum deposit. Reports to all 3 bureaus.

If you’re less concerned with easy approval than getting the best terms, you should also consider the Capital One Secured Mastercard and the Discover it Secured Card. Neither charges an annual fee, and Discover it offers pretty good rewards.

More than 30 banks and credit unions offer secured credit cards, including 7 of the 12 largest credit card issuers.

Banks That Offer Secured Credit Cards

• Bank of America
• Capital One
• Citi
• Discover
• USAA (Visa and Amex)
• U.S. Bank
• Wells Fargo

A number of smaller banks and credit unions offer secured credit cards, too. They include Capital Bank, First Progress and Green Dot, among others. The major banks that do not offer secured cards are American Express, Barclaycard, Chase, PNC and Synchrony Bank.

But remember, it’s not a secured credit card’s issuer that really matters. Your goal should be to find the card with the lowest possible annual fee, no matter who offers it. And you can achieve that goal by comparing secured credit cards using WalletHub's free comparison tool. You can also try our free CardAdvisor to get a personalized recommendation based on your answers to a few simple questions.

The best secured credit card with no credit check is the OpenSky® Secured Visa® Credit Card because it has the lowest annual fee, at $35. There are a total of 5 secured credit cards with no credit check: OpenSky Secured Visa, the First Progress secured cards, and Applied Bank Secured Visa Gold Preferred. They’re all pretty similar, too.

The annual fees on secured credit cards with no credit check range from $35 to $49 per year. All of the cards require a $200 security deposit. And they all report information to the big 3 credit bureaus each month. So any of them can help you immediately begin rebuilding your credit.

It’s important to note, however, that even a secured credit card with no credit check has some approval requirements. You have to be at least 18 years old, for one thing, and you need enough money for the refundable security deposit as well as monthly bill payments.

Best Secured Credit Cards with No Credit Check

• First Progress Platinum Prestige Mastercard® Secured Credit Card: Best for low APR
• OpenSky® Secured Visa® Credit Card: Best for low annual fee
• Applied Bank® Secured Visa® Gold Preferred® Credit Card: Best for high credit limit
• First Progress Platinum Select Mastercard® Secured Credit Card: 2nd lowest annual fee

Before you apply for a secured credit card with no credit check, make sure you actually need it. Even secured cards that require a credit check are pretty easy to get. They’re meant for people with bad credit. And the refundable security deposit you place reduces the risk for issuers.

Individual issuers may have specific requirements that rule some people out. For example, you can’t get the Secured Mastercard® from Capital One or the Discover it® Secured Credit Card with a non-discharged bankruptcy on your credit report. But there are plenty of others whose main requirement is that you have enough money to fund the security deposit. And while they may do a credit check, most applicants should still get approved.

The hard inquiry that comes with a credit check shouldn’t be too big of a deal, either, if you end up opening an account. The score damage will be temporary. And you won’t be able to qualify for any worthwhile loans until you improve your score anyway. So if you don’t need the best possible score right now, taking a short-term hit to achieve long-term gains is the way to go.

Finally, if you’re nervous about getting rejected, you can check for pre-approval before applying. Pre-approval doesn’t mean you’re guaranteed an account. But it is a sign that your odds of approval are extremely high. If after all that you’re not confident in your ability to get approved, you can always go for a secured credit card with no credit check.

The best secured credit card with no annual fee is the Discover it® Secured Credit Card because it gives 1 - 2% cash back on purchases and has a 0% foreign transaction fee to go along with its $0 annual fee. The Discover it® Secured Credit Card also matches 100% of the cash rewards a new cardholder earns the first year. And it reports to all 3 major credit bureaus each month.

Best Secured Credit Cards with No Annual Fee

• Discover it® Secured Credit Card
• Secured Mastercard® from Capital One
• Citi® Secured Mastercard®
• Wells Fargo Business Secured Credit Card
• Amazon.com Secured Credit Card
• Harley-Davidson® Secured Credit Card

As you can see, there are several really good secured credit cards with no annual fee, and they're available even to people whose credit is damaged. Any no annual fee secured credit card is an excellent way to start building up a positive payment history and rebuilding one's credit score.

Eventually, it will be easier to qualify for unsecured credit cards with better terms. But unsecured cards for people with poor credit almost always charge annual fees. 

It’s hard to say exactly how much a secured credit card will raise your credit score, or how fast your score will improve. A good ballpark estimate is that you should see a bit of improvement after a few months and solid gains after a year, assuming you pay your bills on time. And if you start with a bad credit score, you can expect to qualify for an unsecured credit card for fair credit within 12-18 months.

But a lot depends on your starting point, particularly what types of negative records are on your credit report. How you manage both your new secured card and your other financial obligations is very important, too. Paying all your bills by the due date every month is key. Doing so will add positive information to your credit reports, helping cover up mistakes of the past. Failing to do so will only reinforce the idea that you’re a risky borrower. Your credit score will also improve faster the more available credit you have. And you can control that by submitting a larger initial security deposit or adding to it over time.

For a more accurate idea of how much a secured card will raise your credit score, check out your free personalized credit analysis from WalletHub. We’ll tell you which aspects of your credit need the most improvement, exactly what you need to do to fix them, how fast you can raise your score and which credit card will save you the most money. You can also watch your score improve with free daily credit score updates.

Yes, you can rent a car with a secured credit card. But to rent a car with a secured card, you need to have enough available credit to accommodate the hold that the rental agency will put on your card. That’s the case with any credit card, yet it’s a bigger concern with secured credit cards because the spending limit on a secured card is equal to the amount of the security deposit you put down.

When you basically have to pre-pay for all of your purchases, you’re unlikely to have as high of a spending limit as you would otherwise. So even if you have enough credit available to cover the cost of your rental, plus incidentals, renting a car with a credit card could make other purchases difficult to complete until the rental company releases the hold on your account. Using a large portion of your credit for a car rental may also increase your credit utilization, which is bad for your credit score.

There are ways to rent a car without a credit card, too. You could use a debit card or prepaid card, for example. But again, if your account doesn’t provide enough spending power, you’ll run into the same types of problems.

There is no Chase secured credit card available right now. In fact, there’s never been a secured credit card from Chase. Chase offers unsecured credit cards for people with at least good credit.

Although there is no Chase secured credit card, the same cannot be said for many of Chase’s competitors. Capital One, Citi, Discover and Wells Fargo are just some of the major banks that offer secured credit cards.

Secured Credit Card Options & Info

• Good for low deposits: Secured Mastercard® from Capital One has a $0 annual fee. It requires a deposit of $49, $99 or $200, based on your credit history. But you always start with a $200 credit limit.
• Easiest approval: OpenSky® Secured Visa® Credit Card has no credit check. It charges a $35 annual fee and requires a $200 deposit.
• Best cash back rewards: Discover it® Secured Credit Card has a $0 annual fee and 1 - 2% cash back on purchases: 2% cash back on up to $1,000 spent at restaurants and gas stations each quarter (1% everywhere else). And Discover matches your first year’s rewards. Requires a $200 deposit.

So, even though you’re not able to get a Chase secured credit card, you still have plenty of options. And they’ll all help you start building your credit, plus save some money. Once you get your credit score to “good”, you can start thinking about applying for a Chase credit card.