Best Secured Credit Cards

You can build credit with a secured credit card in as little as 1 month, but it will take many months or even years to build a consistently good or excellent credit score. The length of time also depends on whether you’re building credit from nothing or rebuilding damaged credit. If you have no credit, you could see a good score after just a few months of paying on time. You’ll have a VantageScore after 1 month and a FICO Score after 6. With bad credit, though, it will probably take 12-18 months of responsible use for you to move up to the fair credit range. Secured credit cards are great for building credit because they are easy to get and report to the credit bureaus just like unsecured cards.

But it's hard to give you an accurate estimate of how long it will take to build credit with a secured credit card without knowing the details of your situation. That’s where WalletHub can help. Just sign up for a free account, and we’ll give you a personalized credit analysis that will tell you what to improve and give you a better sense of how long it will take.

Here’s how long it takes to build credit with a secured credit card:

• If you have no credit, it will take 1 month to get a VantageScore and 6 to get a FICO score. Depending on how responsibly you use your card, your first score could be anywhere from bad to good.
• If you pay your bill on time and otherwise manage your finances responsibly, you can rebuild from a bad credit score (300-639) to a fair credit score (640-699) in approximately 12-18 months.
• A good credit score based on limited information could easily fall due to an increase in credit utilization or a single missed payment. Building and then keeping a good or excellent credit score requires consistency over time. This is a project measured in years.
• For people rebuilding credit, it will take 7-10 years for some negative information, like bankruptcies and late payments, to disappear from your credit report. But the older they are, the less impact they will have on your score.

If you’re looking to rebuild your credit, secured credit cards are the best way to do it. They’re easy to get and are indistinguishable from unsecured cards aside from the deposit requirement.

Rebuilding credit will take a while, so it’s best to get started as soon as possible. Some good behaviors to practice are always paying on time and using less than 30% of your available credit.

Checking your credit reports regularly for errors and disputing any you find is also important.

Yes, applying for a secured card does count as a hard inquiry most of the time. Nearly all secured credit cards will do a hard inquiry into applicants' credit reports to assess their creditworthiness, but there are exceptions such as the OpenSky® Secured Visa® Credit Card and the Applied Bank® Secured Visa® Gold Preferred® Credit Card. These secured credit cards with no credit check will not do a hard pull on your credit when you apply.

A hard inquiry, also known as a hard pull, will likely drop your credit score by a few points temporarily. But if you haven’t had any hard pulls conducted on your credit report over the past six months and you don’t plan on applying for a sizable loan in the next few months, this shouldn’t be a problem. Your credit score should rebound from a hard inquiry within a few months.

Also, remember that even though your credit score may drop after you apply, responsible use of a secured card will ultimately help your score much more than the inquiry will hurt it. The hard pull will likely be worth it, in other words, especially since secured cards tend to be pretty easy to get approved for. You can track your progress with free daily credit score and report updates from WalletHub.

You can get your secured credit card deposit refunded when paying your account balance and closing your credit card or when the issuer upgrades you to one of their unsecured credit cards. Secured credit card issuers will eventually return your security deposit by sending the funds to your bank account, issuing a check or providing a statement credit.

Ways to Get the Deposit Back From a Secured Credit Card

• Refunds for closed accounts: When you close your account, the security deposit will be refunded to you after having paid your entire balance. Your security deposit is applied to any unpaid balances.
• Refunds for upgraded accounts: Some secured credit cards can graduate to unsecured credit card accounts. If this happens, your security deposit will be refunded to you.
• Refunds for decreased limits: If your credit limit is decreased, the difference will be refunded to you.

Since the refund policy varies from one issuer to another, it is best to call the number on the back of your card and ask for specific information about whether your deposit is refundable.

The main difference between a secured credit card and an unsecured credit card is that secured cards require you to place a refundable security deposit when you open your account. Apart from this security deposit, secured and unsecured credit cards aren't necessarily better or worse for your credit. The amount of this deposit typically serves as the credit limit for the secured card, which means you have to pre-pay for purchases with a secured card. You’ll usually have to put down the deposit when you apply, and you’ll get it back when you close your account or upgrade to an unsecured credit card. Unsecured credit cards, on the other hand, give access to a credit line that isn’t “secured” with a deposit.

There is no difference between secured and unsecured credit cards when it comes to building credit. All major secured cards report account information to the major credit bureaus on a monthly basis, just like unsecured cards. In fact, you can’t tell secured and unsecured cards apart on a credit report. So as long as you use either type of card responsibly, your credit score will improve.

Below, you can get a better feel for the differences and similarities between secured and unsecured credit cards by seeing how they compare in several important categories.

Secured vs. Unsecured Credit Cards: Key Differences

Approval Odds of Secured Credit Cards vs Unsecured Credit Cards

Secured credit cards are easier to get approved for than unsecured cards. Because you’re technically pre-funding your credit line with a secured credit card, you can’t spend more than you can afford to repay. The deposit is held in an account by the card issuer, so if you don’t pay your bills, the deposit is used to cover the cost. That’s why secured credit cards are able to offer nearly-guaranteed approval to people with bad credit, while charging very reasonable fees. That being said, secured credit cards are real credit cards – they have interest rates, and you have to pay your monthly bill on time.

In contrast, unsecured credit cards tend to be harder to get, because the card issuer takes on a lot more risk by extending an unsecured credit line. In other words, you can spend more on an unsecured card than you can afford to repay. There are unsecured credit cards for people of all credit levels, but if you have bad credit, you’re likely to pay high non-refundable fees for a very small line of unsecured credit.

Choosing Between Secured & Unsecured Credit Cards

Overall, the toughest decision between secured and unsecured credit cards comes when you have damaged credit. With bad credit, it’s harder to get approved for an unsecured credit card, and the unsecured options available to people with bad credit are far less attractive.

If you have limited, fair, good or excellent credit, you should be able to start with a solid unsecured card. If you’ve got bad credit and the flexibility to choose either a secured credit card or an unsecured one, always go secured. It will cost you a lot less in the long run and help you build credit just the same. You can check your credit score for free on WalletHub to see where you stand.

There is no minimum credit score needed for a secured card, since secured credit cards are designed for people with bad or limited credit. Some secured credit cards, such as the OpenSky® Secured Visa® Credit Card, won’t even check your credit when you apply.

Notable Secured Cards with No Minimum Credit Score Needed

• Discover it® Secured Credit Card
• OpenSky® Secured Visa® Credit Card
• The First Progress Platinum Elite Mastercard® Secured Credit Card
• Applied Bank® Secured Visa® Gold Preferred® Credit Card

It is possible to get denied for a secured credit card, though – even one that doesn’t check your credit. You still need to be at least 18 years old and satisfy the other basic eligibility requirements.

If you’re denied for a secured card, it could mean that you don’t have sufficient income to cover a security deposit and minimum payments, or that your credit history shows serious financial problems like bankruptcy. The specifics vary by card and card issuer. But if you’re denied for one secured card, you could still be approved for another. A secured card is the easiest type of credit card to get, after all.

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.

Most secured credit cards require a deposit of at least $200. And the minimum deposit required is always a good place to start. Simply opening an account is the most important thing at this point, as it will allow you to begin rebuilding your credit. In other words, depositing the minimum lets you get started right away without having to worry about giving up too much cash.

Plus, the beauty of using a secured credit card is that you can add to your deposit over time. That gives you a higher spending limit, which allows you to improve your credit utilization and boost your credit score. In general, the more available credit you have, the more favorably credit scores treat you. Just bear in mind that most secured credit card issuers won’t allow your total deposit to exceed $5,000.

The best secured credit card for bad credit is Discover it® Secured Credit Card because it has a $0 annual fee, rewards you with 1 - 2% cash back on purchases, doubles the rewards you’ve earned after the first year, and accepts people with bad credit. The Discover it Secured Credit Card’s main approval requirements are being 18+ years old and having enough income to afford monthly bill payments, plus a refundable security deposit of $200 or more.

Most secured credit cards are open to applicants with bad credit. The more lenient approval requirements are due to the fact that your security deposit will act as collateral for your credit limit. There are several secured credit cards that people with bad credit might want to consider.

Best Secured Credit Cards for Bad Credit:

• Best Overall: Discover it® Secured Credit Card
  $0 annual fee. Earn 2% cash back at gas stations and restaurants (up to $1,000 spent each quarter combined), and 1% back on all other purchases. Minimum deposit of $200.
• No Credit Check: OpenSky® Secured Visa® Credit Card
  $35 annual fee. Minimum deposit of $200.
• Low Deposit: Capital One Platinum Secured Credit Card
  $0 annual fee. Minimum deposit of $49, $99 or $200 (depending on factors such as income, debt, and creditworthiness) in exchange for a starting credit line of $200.
• Cash Back: U.S. Bank Cash+® Visa® Secured Card
  $0 annual fee. Earn 5% cash back on two categories of your choice (up to $2,000 each quarter), 5% back on prepaid air, hotel and car reservations booked in the Rewards Travel Center, 2% back on your choice of one everyday category (like gas stations, grocery stores or restaurants) and 1% back on all other purchases. Minimum deposit of $300.

In general, secured credit cards are the best type of credit card for people with bad credit. Secured cards offer the highest approval odds of any credit cards, and they tend to be a lot cheaper in the long run than unsecured cards for bad credit.

You just have to make sure to pay your bill on time and preferably in full, every month. If you do that, your credit should steadily improve. And that should help you qualify for a credit card upgrade sooner than you might think.

One of the best secured credit cards with no credit check is Secured Sable ONE Credit Card because it gives 2% cash back at Amazon, Netflix, Hulu, Uber, Uber Eats, Spotify, and Whole Foods, and 1% cash back on all other purchases. Plus, this card has a $0 annual fee. There are, however, a few more secured credit cards with no credit check to choose from.

Best Secured Credit Cards with No Credit Check

The annual fees on secured credit cards with no credit check range from $0 to $48 per year. The Sable Credit Card requires a $10 security deposit. The rest of the cards require a minimum deposit of $200. All these cards report information to the big 3 major credit bureaus each month. So, any of them can help you immediately begin rebuilding your credit.

Still, it’s important to note 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 your monthly bill payments.

Why You Shouldn’t Rule Out Secured Cards With a Credit Check

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 most secured cards with a non-discharged bankruptcy on your credit report. But there are plenty of other cards whose main requirement is that you have enough money to fund the security deposit. Plus, while they may do a credit check, most applicants should still get approved.

What You Need to Know About Credit Checks

Keep in mind that the hard inquiry that comes with a credit check shouldn’t be too big of a deal, 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 to rebuild credit is the Capital One Platinum Secured Credit Card 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 good option 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 Platinum Secured and OpenSky cards each bring something special to the table.

Best Secured Credit Cards to Rebuild Credit

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 negative records from the past.

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 help 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.