Advertiser Disclosure

Whether you have bad credit or you’re building a credit score from scratch, a secured credit card can speed you on your way to better terms.

Unlike prepaid debit cards, secured cards can help you establish or improve your credit history, provided that the issuer reports your account activity to the credit bureaus, TransUnion, Experian and Equifax. With secured cards, you’re required to make a refundable deposit as collateral, similar to putting a security deposit down on an apartment. That money protects the card issuer in case you don’t pay your bill.

Keep in mind that lending standards vary from issuer to issuer. Spend carefully and pay your bill on time, and you may be able to establish positive credit history in a matter of months.

Here are NerdWallet’s picks for the best secured credit cards:

Best for low deposit

Capital One® Secured MasterCard®

Apply Now on Capital One's secure website

Pros

  • Qualify with limited / bad credit
  • No annual fee
  • No foreign transaction fee

Cons

  • No rewards
  • High APR

Bonus Offer

You may qualify for a credit line increase based on your payment history and creditworthiness with no additional deposit required

Annual Fee

$0

Intro APR Promotions

None

APR

  • APR: 24.99% (Variable)

Card Details

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • Your minimum security deposit gets you a $200 credit line
  • You may qualify for a credit line increase based on your payment history and creditworthiness with no additional deposit required
  • Easily manage your account 24/7 with online access, by phone, or using our mobile app
  • It’s a credit card accepted at millions of locations worldwide

For a deposit of $49, $99 or $200, depending on your credit, you’ll get a limit of $200. The annual fee is $0.

Benefits of the Capital One® Secured MasterCard®:

  • Unlike with most secured cards, it’s possible to get a credit limit on this card that’s higher than the security deposit you put down. You can get a limit of $200 for a $49, $99 or $200 deposit, depending on your credit.
  • You can make partial payments on your deposit, as long as you provide the full amount within 80 days of being approved. You’ll get access to your full credit line before that time.
  • This card reports to the three major consumer credit bureaus.

Drawbacks of the Capital One® Secured MasterCard®:

  • Because of the lower deposit options, Capital One has stricter underwriting standards for this card. You generally won’t qualify if you don’t have a checking or savings account, if you have a bankruptcy that’s still on your credit report, or if your rent is almost as high as your monthly income, among other reasons.

The bottom line:

Among all of the secured cards on NerdWallet, the Capital One® Secured MasterCard® is the most affordable. Because this secured card comes with more requirements than others, it may not be a good fit for folks recovering from major credit damage, but it could be an excellent match for someone who’s getting a credit card for the first time.

Best for no annual fee

Digital Federal Credit Union Visa Platinum Secured Credit Card

Apply Now on Digital Federal Credit Union's secure website

Pros

  • Qualify with limited / bad credit
  • No annual fee

Cons

  • No rewards

Bonus Offer

None

Annual Fee

$0

Intro APR Promotions

None

APR

  • Purchase: 11.50%, Variable
  • Penalty APR: Up to 18.00%, Variable
  • Cash Advance APR: 11.50%, Variable

Card Details

  • No rewards offered

The annual fee is $0. Usually, the minimum required deposit is $500.

Benefits of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • The ongoing APR is 11.5% Variable — lower than on most secured cards and even on many unsecured cards. It’s generally not a good idea to carry a balance on a secured credit card, because it may be seen as a risk factor by some issuers. But if you need to, this card makes it much less expensive.
  • This card reports to the three major consumer credit bureaus.

Drawbacks of the Digital Federal Credit Union Visa Platinum Secured Credit Card:

  • The $500 minimum deposit is steep.
  • You may not be able to qualify for this card if you have unpaid collections accounts or a recent bankruptcy.
  • If your credit score is extremely low, your required deposit may be greater than your credit limit.

The bottom line:

If you can meet DFCU’s minimum requirements and can afford the relatively high security deposit, this card could be a good way to build or rebuild your credit. But if you’re contending with a lot of negative information on your credit report, you may be better off boosting your credit with another offer. If you don’t qualify for this card, consider improving your credit with DFCU by opening a savings account there and applying for a savings-secured loan instead, which has fewer requirements and doesn’t trigger a hard pull on your credit report.

Best for bad credit or no checking account

OpenSky® Secured Visa® Credit Card

Apply Now on Capital Bank's secure website

Pros

  • Qualify with limited / bad credit

Cons

  • Has annual fee
  • No rewards

Bonus Offer

None

Annual Fee

$35

Intro APR Promotions

None

APR

  • Purchase: 17.39%, Variable
  • Penalty APR: Up to 21.50%, Variable
  • Cash Advance APR: 17.39%, Variable

Card Details

  • Build Your Credit fast with our monthly reporting to all 3 major credit bureaus.
  • Choose your credit line as low as $200 up to $3000, secured by a fully-refundable* security deposit.
  • Security deposit needs to be submitted before the credit card can be issued.
  • No credit check necessary and no checking account required; apply in less than 5 minutes
  • Extra credit when you need it, increase your credit line up to $5000*
  • Access to online financial education.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card. Click the Apply Now button to get to the application page.

The annual fee is $35. You can deposit between $200 and $3,000;
your credit limit is equal to your deposit.

Benefits of the OpenSky® Secured Visa® Credit Card:

  • You can qualify for this card within minutes. The bank doesn’t run a credit check and doesn’t require a checking account, unlike other major issuers.
  • Because the annual fee is $35, this card is a relatively affordable way to improve a severely damaged credit score.
  • The card reports to the three major consumer credit bureaus.

Drawbacks of the OpenSky® Secured Visa® Credit Card:

  • You generally can’t upgrade your account to an unsecured card.
  • You won’t qualify for the card if your monthly expenses exceed your monthly income. (This is generally the case with all secured credit cards.)

The bottom line:

If you want to rebuild your credit but are having trouble finding an issuer that will work with you, the OpenSky® Secured Visa® Credit Card could be a good match. Its annual fee is $35 — reasonable, compared with other secured credit cards — and your activity will be reported to all three major credit bureaus, making it easier to rebuild your credit. When it comes to funding the account, you a can use a debit card, do a wire transfer, write a check or use a money order, making it one of the few secured cards that you can use without a traditional bank account.

Best for upgrading

US Bank Secured Card

Apply Now on US Bank's secure website

Pros

  • Qualify with limited / bad credit

Cons

  • Has annual fee
  • No rewards
  • High APR

Bonus Offer

None

Annual Fee

$29

Intro APR Promotions

None

APR

  • Purchase: 19.24%, Variable
  • Cash Advance APR: 24.24%, Variable

Card Details

  • Credit limit based on deposit, $300-$5k

The annual fee is $29. Your can make a security deposit of $300 to $5,000,
which is kept in an interest-earning savings account.

Benefits of the US Bank Secured Card:

  • If you play your cards right, you can move up to an unsecured card after 12 months. That way, you won’t have to cancel your account and open a new one, potentially triggering another hard inquiry on your credit report.
  • This card reports to the three major consumer credit bureaus.
  • The card doesn’t charge a penalty APR.

Drawbacks of the US Bank Secured Card:

  • If you have an overwhelming amount of unpaid balances, a high debt-to-income ratio or a bankruptcy on your credit report, you may not be able to qualify for this offer.

The bottom line:

Assuming you can meet all of US Bank’s requirements and upgrade in a year, the annual fee could be well worth it. You may have difficulty qualifying, though, if you have a lot of negative information on your credit report.

Best for high limits

Wells Fargo Secured Visa Card

Apply Now on Wells Fargo's secure website

Pros

  • Qualify with limited / bad credit

Cons

  • Has annual fee
  • No rewards
  • High APR

Bonus Offer

None

Annual Fee

$25

Intro APR Promotions

None

APR

  • Purchase: 18.99%, Variable
  • Cash Advance APR: 23.99%, Variable

Card Details

  • Low annual fee relative to other secured credit cards
  • $300-$10,000 credit limit, which ties to the size of your collateral deposit
  • A typical 25 day grace period

The annual fee is $25. Minimum security deposit is $300,
but you can deposit up to $10,000 — and get a credit line to match. 

Benefits of the Wells Fargo Secured Visa Card:

  • You can deposit up to $10,000. Because your limit is equal to your deposit, this secured card offers much more spending power than others — provided you have the extra cash.
  • With responsible borrowing, you may be able to qualify for an unsecured card later on.
  • This card reports to the three major consumer credit bureaus.
  • The card doesn’t charge a penalty APR.

Drawbacks of the Wells Fargo Secured Visa Card:

  • Your application may be rejected if you have a lot of negative information on your credit report.

The bottom line:

If you have poor credit but plenty of spare cash, this card could help you improve your creditworthiness significantly. Even better, it gives you a way to upgrade to an unsecured card with consistent responsible credit use. It may take a few years to graduate to an unsecured card in some cases, though, and upgrading isn’t guaranteed. But if you borrow conservatively and pay before the due date, you’ll have a good chance of getting better terms in the future.

Methodology

NerdWallet’s credit cards team selects cards in each category based on overall consumer value. Factors in our evaluation include fees, promotional and ongoing APRs, and sign-up bonuses; for rewards cards, we consider earning and redemption rates, redemption options and redemption difficulty. A single card is eligible to win in multiple categories.  

Last updated January 14, 2016.

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. Email: claire@nerdwallet.com. Twitter: @ideclaire7.