Secured Credit Card Guide

The best secured credit card with rewards is Discover it® Secured Credit Card because it has a $0 annual fee and offers 2% cash back on up to $1,000 spent at gas stations and restaurants combined every quarter. It also gives 1% back on all other purchases, and Discover matches all your cash back earned during the first year. 

Best Secured Credit Cards with Rewards

Rewards are among the few factors that you should consider when choosing a secured credit card, along with the annual fee and the minimum deposit requirement. Paying an annual fee just to get rewards only makes sense if the amount you'll earn exceeds both the fee and your expected earnings with a cheaper card combined. 

By the way, all of these cards report to the credit bureaus on a monthly basis, giving you the chance to build credit with on-time payments.

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

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. 

One of the best secured credit cards with a low deposit is the Capital One Platinum Secured Credit Card because new cardholders may be able to put down either $49, $99 or $200 and still get a $200 credit line, which would make the card only partially secured. And there's a $0 annual fee.

Other secured cards don't have the potential to be quite as cheap, but there are a few really good options with a $200 deposit minimum. That's still pretty low compared to the many secured cards that ask for $300-$500+.

Here are some good secured credit cards with low deposits:

• Capital One Platinum Secured: $49, $99 or $200 minimum deposit. $0 annual fee and $0 foreign transaction fee. $200 starting credit limit.
• Citi® Secured Mastercard®: $200 minimum deposit. $0 annual fee and 3% foreign transaction fee.
• OpenSky® Secured Visa® Credit Card: $200 minimum deposit. $35 annual fee. 3% foreign transaction fee. No credit check when you apply.
• First Progress Platinum Prestige Mastercard® Secured Credit Card: $200 minimum deposit. $49 annual fee. 3% foreign transaction fee. 9.99% (V) interest rate.

Capital One Platinum Secured doesn't guarantee a low deposit, but it does offer the chance of one. If your credit is toward the bottom of the bad credit range, you'll probably still have to put down a $200 deposit. But the higher your credit score is, the better chance you'll have of being assigned a low deposit.

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.

The best secured credit card with no credit check is The First Progress Platinum Elite Mastercard® Secured Credit Card because it has the lowest annual fee, at $29. 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.

Best Secured Credit Cards with No Credit Check

The annual fees on secured credit cards with no credit check range from $29 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.

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 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. 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 for no credit is the Discover it® Secured Credit Card because it has a $0 annual fee, gives 1 - 2% cash back on purchases, and doubles the rewards cardholders earn the first year. The Discover it® Secured Credit Card requires a refundable security deposit of $200 or more, for a credit limit equal to the deposit amount. But it also offers the chance to graduate to an unsecured card after at least seven months of on-time payments.

Another good secured credit card for no credit is the Capital One Quicksilver Secured Cash Rewards Credit Card. This card gives 1.5% cash back on purchases and requires a minimum deposit of $200, which will be your credit limit.

Best Secured Credit Cards for No Credit

In general, secured credit cards offer good approval odds to people with limited or no credit. They're designed for rebuilding credit, after all, and even people with bad credit scores can get approved. But even the best secured credit cards should only be a backup plan for people with no credit.

There are also unsecured credit cards for no credit with no deposit required. Student credit cards are the best deals, with $0 annual fees and more than 1% back on purchases. But other people with limited credit should be able to find a good offer, too. So, you might want to try for an unsecured card for no credit first and then settle for a secured card if you don't get approved.

The best secured card that graduates to unsecured is Bank of America Custom Cash Secured Card. It reviews accounts for possible graduation periodically and it reports to all 3 major credit bureaus. You also get 3% cash back in a category of your choice, 2% back at grocery stores and wholesale clubs (up to $2,500 spent quarterly in the 3% and 2% categories combined), and 1% back on all other purchases.

However, the Bank of America Custom Cash Secured Card is not the only secured credit card that can graduate.

Best secured cards that graduate to unsecured:

When your secured card graduates to an unsecured card, your credit line no longer needs to be secured with collateral. So when you graduate, the initial deposit you made to open the secured card will be refunded. You may get to keep the same physical credit card, or you may be migrated to another one. Either way, you'll keep the good credit history you've earned with your secured card.

The minimum deposit for a secured credit card is usually $200, as cards will rarely allow lower deposits. The deposit amount, which the credit card issuer holds as collateral to protect against non-payment, also acts as the card's credit limit in most cases.

While most secured credit cards don't accept deposits lower than $200, you will likely be allowed to put down more than the minimum required. Many secured credit cards also impose a maximum limit on deposits.

Minimum Deposit for Secured Credit Cards

It's important to note that security deposits are fully refundable, as long as you don't have any outstanding balance when the account is closed. The credit card issuer will also return the deposit if the card graduates to an unsecured version.

You can check out more secured credit cards and their minimum deposit amounts on WalletHub.

The main disadvantages of secured credit cards are the initial deposit requirement and the fact that the credit line is usually limited to the deposit amount. While secured credit cards can be great for people trying to improve their credit score, they typically do not provide any added spending power. There are some other drawbacks to consider as well.

Disadvantages of Secured Credit Cards

1. You must pay a security deposit. Secured credit cards require an initial deposit, which serves as a form of insurance for the card's issuer. You will forfeit access to that money until the account is closed or it graduates to an unsecured version.
2. Secured credit cards don't provide added spending power. With nearly all secured credit cards, the credit limit will match your security deposit. As a result, you can't actually borrow any money.
3. Approval is not guaranteed. Secured credit cards generally offer higher approval odds than unsecured cards. But there are still underwriting standards that every applicant must meet. At the very least, you must be 18+ years old and have enough income to afford both the security deposit and minimum monthly payments. Some secured credit cards might also reject you if have an unresolved bankruptcy.
4. Some secured cards charge membership fees. Some secured credit cards come with annual fees, which are non-refundable, unlike the security deposit.
5. Many secured cards don't offer rewards. With some notable exceptions, most secured credit cards don't give rewards on purchases.

That being said, secured credit cards can be a great credit-building tool because they offer better approval odds than unsecured cards for bad or limited credit, and report to the credit bureaus the same way. If used responsibly, a secured credit card can add a consistent stream of positive information to your credit reports.

You can check out WalletHub's latest picks for the best secured credit card offers to find the right option for you.