CREDIT CARDSCREDIT CARDSBEST SECURED CREDIT CARDS OF JUNE 2023
BEST OF

Best Secured Credit Cards of June 2023

NerdWallet Jun 7, 2023
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NerdWallet's Best Secured Credit Cards of June 2023

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Best Secured Credit Cards From Our Partners

Credit card
NerdWallet rating
Annual feeIntro APRRegular APRLearn more
Chime Credit Builder Visa® Credit Card card image
Chime Credit Builder Visa® Credit Card
Apply Now
on Chime's website
4.6/5
Best for Easy account management

$0

N/A

N/A

Apply Now
on Chime's website
Discover it® Secured Credit Card card image
Discover it® Secured Credit Card
Apply Now
on Discover's website,or call 800-347-0264
Rates & Fees
Best for Rewards and upgrading

$0

10.99% intro APR on Balance Transfers for 6 months

27.99% Variable APR

Apply Now
on Discover's website,or call 800-347-0264
Self Visa® Secured Card card image
Self Visa® Secured Card
Apply Now
on Self's website
Best for No upfront deposit or credit check

$25

N/A

28.24% Variable

Apply Now
on Self's website
Capital One Quicksilver Secured Cash Rewards Credit Card card image
Capital One Quicksilver Secured Cash Rewards Credit Card
Apply Now
on Capital One's website
Best for Rewards and upgrading

$0

N/A

29.99% Variable APR

Apply Now
on Capital One's website
Capital One Platinum Secured Credit Card card image
Capital One Platinum Secured Credit Card
Apply Now
on Capital One's website
Best for Low deposit

$0

N/A

29.99% Variable APR

Apply Now
on Capital One's website
Petal® 1 "No Annual Fee" Visa® Credit Card card image
Petal® 1 "No Annual Fee" Visa® Credit Card
Apply Now
on Petal's website
Best for No-deposit alternative

$0

N/A

24.99%-34.49% Variable APR

Apply Now
on Petal's website
OpenSky® Secured Visa® Credit Card card image
OpenSky® Secured Visa® Credit Card
Apply Now
on Capital Bank's website
Best for No credit check + lower deposit

$35

N/A

22.14% Variable APR

Apply Now
on Capital Bank's website
OpenSky® Plus Secured Visa® Credit Card card image
OpenSky® Plus Secured Visa® Credit Card
Apply Now
on Capital Bank's website
Best for No credit check + no annual fee

$0

N/A

29.74% Variable APR

Apply Now
on Capital Bank's website
Our pick for

Easy account management

Chime Credit Builder Visa® Credit Card card image
Apply Now
on Chime's website

Chime Credit Builder Visa® Credit Card

4.6
NerdWallet rating
Chime Credit Builder Visa® Credit Card card image
NerdWallet rating
4.6/5
Apply Now
on Chime's website

Annual fee

$0

Intro APR

N/A

Regular APR

N/A

Recommended Credit Score

The Chime Credit Builder Visa® Credit Card has no minimum deposit requirement, charges neither an annual fee nor interest, and doesn't require a credit check, and you can automate your payments so you're never late. But to get it, you must be a Chime banking customer.

Product Details
  • The Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.
  • No credit check to apply, no annual fees or interest, and no minimum security deposit required. No stress! Additional terms apply.
  • Use your secured Credit Builder card everywhere VISA is accepted, including on everyday purchases, such as gas and groceries.
  • Help build your credit history with your own money. The money you move into the Credit Builder secured account is the amount you can spend on your card (no minimum deposit required!). Turn on Safer Credit Building and have your monthly balance automatically paid on time. Chime will report your activities to Transunion®, Experian®, and Equifax®.
  • Increase your credit score by an average of 30 points, with regular, on-time payments.¹
  • Turn on transaction notifications to receive real-time transaction alerts. Then, use Chime’s instant in-app disable card feature to help prevent unauthorized activities.
  • Live support 24/7 to assist you around the clock.
  • Now you can use your Credit Builder card fee-free at over 60K+ in-network ATMs at retailers like Walgreens, CVS, and more! Out-of-network ATM withdrawal fees may apply except at Moneypass ATMs in 7-Eleven locations, or any Allpoint or Visa Plus Alliance ATMs.
  • Apply for a secured Chime Credit Builder Visa® Credit Card once you sign up for a Chime Spending Account and receive a qualifying direct deposit of $200 or more. See www.chime.com to learn more.
Pros
  • Instead of a security deposit, the card is backed by the money in a linked account, which you can add to at any time. The card won't let you spend any more than you have in the account, and when your payment is due, you can have the money taken from the account automatically. In a way, it works like a prepaid debit card, but unlike a prepaid card, it helps build credit. No credit check required to apply.

Cons
  • The safety precautions that make it an excellent tool for building credit can also get in the way of learning how to handle credit responsibly. Any card you graduate to will work quite differently. Chime has been the subject of multiple complaints related to the way it freezes customers' funds.

Why We Like It

The Chime Credit Builder Visa® Credit Card has no minimum deposit requirement, charges neither an annual fee nor interest, and doesn't require a credit check, and you can automate your payments so you're never late. But to get it, you must be a Chime banking customer.

Our pick for

Rewards and upgrading

Discover it® Secured Credit Card card image
Apply Now
on Discover's website,or call 800-347-0264

Annual fee

$0

Intro APR

10.99% intro APR on Balance Transfers for 6 months

Regular APR

27.99% Variable APR

Recommended Credit Score

When you consider the rewards, the lack of an annual fee and the opportunity for an upgrade, the Discover it® Secured Credit Card is the best secured credit card we've seen.

  • No credit score required to apply.
  • No Annual Fee, earn cash back, and build your credit history
  • Your secured credit card requires a refundable security deposit, and your credit line will equal your deposit amount, starting at $200. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 7 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Discover could help you reduce exposure of your personal information online by helping you remove it from select people-search sites that could sell your data. It’s free, activate with the mobile app.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites. Activate for free.
  • Click through to Discover’s website to see terms and conditions.
  • View Rates & Fees
Pros
  • The rewards on this card — 2% cash back on up to $1,000 worth of spending per quarter on restaurants and gas, and 1% on all other spending — would be pretty decent on a regular card. For a secured credit card, they’re terrific. After seven months, Discover automatically evaluates your account for possible upgrade to an unsecured card. And the annual fee is $0.

Cons
  • The initial deposit must be paid with a bank account; if you’re unbanked, you’re out of luck. For some people, the $200 minimum deposit will be a stretch. For others, the maximum $2,500 credit limit will be too low.

Why We Like It

When you consider the rewards, the lack of an annual fee and the opportunity for an upgrade, the Discover it® Secured Credit Card is the best secured credit card we've seen.

Capital One Quicksilver Secured Cash Rewards Credit Card card image
Apply Now
on Capital One's website

Annual fee

$0

Intro APR

N/A

Regular APR

29.99% Variable APR

Recommended Credit Score

The Capital One Quicksilver Secured Cash Rewards Credit Card offers the ability to build or rebuild credit while also enjoying a simple, straightforward rewards rate.

  • No annual or hidden fees, and you can earn unlimited 1.5% cash back on every purchase, every day. See if you're approved in seconds
  • Put down a refundable $200 security deposit to get a $200 initial credit line
  • Building your credit? Using a card like this responsibly could help
  • Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options. Terms apply
  • Monitor your credit score with CreditWise from Capital One. It's free for everyone
  • Enjoy up to 6 months of complimentary Uber One membership statement credits through 11/14/2024
Pros
  • The $0-annual-fee card earns 1.5% cash back on most purchases — a decent rate even among unsecured cards. It offers an automatic credit limit review after six months and a possible upgrade path to a traditional, unsecured card with Capital One. Plus, you'll earn 5% cash back on hotels and rental cars booked through Capital One Travel.

Cons
  • As with all secured cards, an upfront deposit is required. The $200 minimum might be a tough hurdle for some to clear.

Why We Like It

The Capital One Quicksilver Secured Cash Rewards Credit Card offers the ability to build or rebuild credit while also enjoying a simple, straightforward rewards rate.

Our pick for

No upfront deposit or credit check

Self Visa® Secured Card card image
Apply Now
on Self's website

Annual fee

$25

Intro APR

N/A

Regular APR

28.24% Variable

Recommended Credit Score

The Self Visa® Secured Card offers those with no credit or poor credit a unique path to establishing a credit history. Unlike typical secured cards, it doesn't require an upfront security deposit or a credit check. But it does make you jump through some hoops that other secured cards don't.

  • One of the lowest deposit in the industry ($100).
  • Users can micro-pay their way to a deposit (as low as $25/mo).
  • $25 annual fee.
  • Monthly credit limit increases.
  • No hard credit check required.
  • Reports to all three bureaus.
  • Start with a Credit Builder Account**.
  • Make at least 3 monthly payments on time, have $100 or more in savings progress in your Credit Builder Account, and be in good standing. Then, you’ll be eligible for the Self Visa Credit Card.
  • Your savings progress from your Credit Builder Account acts as your security deposit for your secured Credit Card.
  • *The Self Visa® Credit Card is issued by Lead Bank, Member FDIC, Equal Housing Lender or SouthState Bank, N.A., Member FDIC, Equal Housing Lender. Individual results will vary. Visit self.inc for more details.
  • **All Credit Builder Accounts made by Lead Bank, Member FDIC, Equal Housing Lender, Sunrise Banks, N.A. Member FDIC, Equal Housing Lender or SouthState Bank, N.A. Member FDIC, Equal Housing Lender. Subject to ID Verification. Individual borrowers must be a U.S. citizen or permanent resident and at least 18 years old. Valid bank account and Social Security Number are required. All loans are subject to consumer report review and approval. All Certificates of Deposit (CD) are deposited in Lead Bank, Member FDIC, Sunrise Banks, N.A., Member FDIC or SouthState Bank, N.A., Member FDIC.
Pros
  • Instead of requiring a traditional deposit, this card has you open a Self Credit Builder Account and make regular payments on a secured installment loan. (See our review for more detail on how it works.) Your payments essentially go into a savings account; once you have enough saved up with Self, you can use that money as a deposit on the card. The minimum deposit is just $100, lower than on most secured cards. There's no credit check, either.

Cons
  • There's a one-time account set-up fee of $9 and an annual fee of $25. And there's no sugar-coating it: The process of opening the Credit Builder Account, making payments and then funding the card deposit is complicated. But for those struggling to establish credit, it can be worth the effort.

Why We Like It

The Self Visa® Secured Card offers those with no credit or poor credit a unique path to establishing a credit history. Unlike typical secured cards, it doesn't require an upfront security deposit or a credit check. But it does make you jump through some hoops that other secured cards don't.

Our pick for

Low deposit

Capital One Platinum Secured Credit Card card image
Apply Now
on Capital One's website

Annual fee

$0

Intro APR

N/A

Regular APR

29.99% Variable APR

Recommended Credit Score

The Capital One Platinum Secured Credit Card may not be a good fit for folks recovering from major credit damage, but it could be an excellent match for someone getting a credit card for the first time.

  • No annual or hidden fees. See if you're approved in seconds
  • Building your credit? Using the Capital One Platinum Secured card responsibly could help
  • Put down a refundable security deposit starting at $49 to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
  • Monitor your credit score with CreditWise from Capital One. It's free for everyone
  • Get access to your account 24 hours a day, 7 days a week with online banking to access your account from your desktop or smartphone, with Capital One's mobile app
Pros
  • With most secured cards, your deposit must be equal to your credit limit. But with the Capital One Platinum Secured Credit Card, you can get a limit of $200 for a deposit of $49, $99 or $200. If you can’t come up with your whole deposit upfront, you can pay it in installments before activating your card. Pay your bill on time, and you can also be automatically considered for a higher credit line in as little as six months.

Cons
  • Underwriting standards are tighter than for many other secured cards. You generally won’t qualify if you don’t have a checking or savings account, if you have non-discharged bankruptcy, or if your rent is almost as high as your monthly income, among other reasons.

Why We Like It

The Capital One Platinum Secured Credit Card may not be a good fit for folks recovering from major credit damage, but it could be an excellent match for someone getting a credit card for the first time.

Our pick for

No-deposit alternative

So-called "alternative credit cards" can also be a good option for those with no or poor credit. Such cards are typically from smaller companies and startups, and many of them do not require a security deposit at all. The issuers behind these cards can opt to use proprietary, nontraditional underwriting standards — such as income, employment and bank account balances — to evaluate the risk of lending to you.
Petal® 1 "No Annual Fee" Visa® Credit Card card image
Apply Now
on Petal's website

Annual fee

$0

Intro APR

N/A

Regular APR

24.99%-34.49% Variable APR

Recommended Credit Score

The Petal® 1 "No Annual Fee" Visa® Credit Card requires no security deposit and, as its name suggests, has a $0 annual fee. Thanks to a unique underwriting process, it could be a good choice if you have less-than-ideal credit.

  • $0 Annual Fee.
  • Variable APRs range from 24.99%-34.49%.
  • $300 - $5,000 credit limits.
  • Earn a credit limit increase in as little as 6 months. Terms and conditions apply.
  • No credit score? No problem. If eligible, we'll create your Cash Score instead.
  • 2% - 10% cash back at select merchants.
  • See if you're pre-approved within minutes without impacting your credit score.
  • No annual or foreign transaction fees.
  • Build credit alongside hundreds of thousands of Petal card members.
  • Petal's mobile app makes it easy to manage your money, track your spending, and automate payments.
  • Petal reports to all 3 major credit bureaus.
  • No deposits required.
  • Card issued by WebBank, Member FDIC.
Pros
  • Petal’s algorithm allows its issuing bank — WebBank — to look beyond just credit scores. It can evaluate your bank information to get a clear picture of how you manage income, savings and spending. The card is light on fees, reports to all three credit bureaus, and even offers the chance at earning rewards.

Cons
  • You may be required to link your bank account in order to get this card, and the rewards it does earn are only with select merchants.

Why We Like It

The Petal® 1 "No Annual Fee" Visa® Credit Card requires no security deposit and, as its name suggests, has a $0 annual fee. Thanks to a unique underwriting process, it could be a good choice if you have less-than-ideal credit.

Our pick for

No credit check + lower deposit

OpenSky® Secured Visa® Credit Card card image
Apply Now
on Capital Bank's website

Annual fee

$35

Intro APR

N/A

Regular APR

22.14% Variable APR

Recommended Credit Score

You don't have to undergo a credit check to apply, and you don't need a bank account to qualify. If these are areas of concern for you, the OpenSky® Secured Visa® Credit Card is definitely worth a look. If not, there are better (and cheaper) alternatives. Click 'apply now' to see additional terms.

  • No credit check to apply. Zero credit risk to apply!
  • Looking to build or rebuild your credit? 2/3 of cardholders receive a 48+ point improvement after making 3 on-time payments
  • With an 87% average approval rate for the past 6 months, OpenSky gives everyone an opportunity to improve their credit
  • Extend your $200 credit line by getting considered for an unsecured credit line increase after 6 months - no additional deposit required!
  • Get free monthly access to your FICO score in our mobile application
  • Build your credit history across 3 major credit reporting agencies: Experian, Equifax, and Transunion
  • Fund your card with a low $200 refundable security deposit to get a $200 credit line
  • Apply in less than 5 minutes with our mobile first application
  • Choose the due date that fits your schedule with flexible payment dates
  • Fund your security deposit over 60 days with the option to make partial payments
  • Join over 1.2 million cardholders who’ve used OpenSky to build their credit
Pros
  • The issuer doesn’t run a credit check on OpenSky® Secured Visa® Credit Card applicants, making this an attainable option for people with severely damaged credit. You can make your deposit — minimum $200, maximum $3,000 — and pay your bills with a debit card, wire transfer, check or money order, making it one of the few secured cards that doesn’t require a traditional bank account.

Cons
  • There's an annual fee of $35 — not excessive for a card for those with very poor credit, but not $0, either. Also, your options for upgrading your account to an unsecured card are limited.

Why We Like It

You don't have to undergo a credit check to apply, and you don't need a bank account to qualify. If these are areas of concern for you, the OpenSky® Secured Visa® Credit Card is definitely worth a look. If not, there are better (and cheaper) alternatives. Click 'apply now' to see additional terms.

Our pick for

No credit check + no annual fee

OpenSky® Plus Secured Visa® Credit Card card image
Apply Now
on Capital Bank's website

Annual fee

$0

Intro APR

N/A

Regular APR

29.74% Variable APR

Recommended Credit Score

Like the regular OpenSky card, the OpenSky® Plus Secured Visa® Credit Card doesn't require a credit check or a bank account. This card, however, charges an annual fee of $0, at the cost of a higher minimum deposit and a higher interest rate.

  • No annual fee
  • No credit check to apply. Find out instantly if you are approved- Zero credit risk to apply!
  • Looking to build or rebuild your credit? 2/3 of cardholders receive a 48+ point improvement after making 3 on-time payments
  • With an 87% average approval rate for the past 6 months, OpenSky gives everyone an opportunity to improve their credit
  • Get considered for an unsecured credit line increase after 6 months - no additional deposit
  • Monitor your credit progress with free access to your FICO Credit Score.
  • Reports to all 3 major credit bureaus monthly to establish and build credit history.
  • Secure your credit line with a refundable security deposit - as low as $300.
  • Easy application, apply in less than 5 minutes right from your mobile device
  • Offer flexible payment due dates which allow you to choose any available due date that fits your payment schedule
  • Now you can make smaller partial payments towards funding your security deposit over 60 days
  • Over 1.2 Million Cardholders Have Used OpenSky Secured Credit Card To Improve Their Credit
Pros
  • The benefits are largely the same as with the annual-fee OpenSky card: The issuer doesn’t run a credit check, and you can make your deposit and pay your bills with a debit card, wire transfer, check or money order, making it an option for those without a traditional bank account. On top of that, there's no annual fee.

Cons
  • The minimum security deposit on this card is $300, which is 50% higher than on OpenSky's standard card. The APR is also considerably higher, so avoid carrying a balance. Also, your options for upgrading to an unsecured card are limited.

Why We Like It

Like the regular OpenSky card, the OpenSky® Plus Secured Visa® Credit Card doesn't require a credit check or a bank account. This card, however, charges an annual fee of $0, at the cost of a higher minimum deposit and a higher interest rate.

FULL LIST OF EDITORIAL PICKS: BEST SECURED CREDIT CARDS

Before applying, confirm details on the issuer’s website.

Discover it® Secured Credit Card

Our pick for: Rewards and upgrading

Like other secured credit cards for people building or rebuilding credit, the Discover it® Secured Credit Card requires a cash security deposit. Unlike most others, it offers rewards. But what really makes it stand out from the competition is its upgrade possibilities. The issuer has a process in place for automatically reviewing accounts for possible transition to an unsecured card. Read our review. 

Capital One Quicksilver Secured Cash Rewards Credit Card

Our pick for: Rewards and upgrading

The Capital One Quicksilver Secured Cash Rewards Credit Card offers an impressive combination of features for those with poor credit. A deposit is required, but in exchange you get a $0-annual-fee card that reports to all three credit bureaus; an automatic credit limit review after six months; and a possible upgrade path to an unsecured Capital One card. Oh, and 5% back on hotels and rental cars booked through Capital One Travel, plus 1.5% back on all other purchases, which equals what you'd find on many unsecured cards. Read our review.

Capital One Platinum Secured Credit Card

Our pick for: Low deposit

The Capital One Platinum Secured Credit Card requires a security deposit, as do all secured credit cards. But while most cards require you to put down a deposit equal to your credit line, this one allows some qualifying applicants to get a $200 credit line with a deposit starting at $49. Further, you can be automatically considered for a higher credit line with no additional deposit in as little as six months. Read our review.

Citi® Secured Mastercard®

Our pick for: Basic card for thin credit

The Citi® Secured Mastercard® is a straightforward card for people new to credit — put down a security deposit, use the card to establish a positive credit history and then move up to a better card (and get your deposit back). One note: This card is for people just starting out with credit, rather than people with bad credit from past mistakes. Read our review.

OpenSky® Secured Visa® Credit Card

Our pick for: No credit check + lower deposit

The OpenSky® Secured Visa® Credit Card charges an annual fee, but a lot of people will still want to take a look at it for two reasons. First, there's no credit check required. Second, you don't need a traditional bank account; you can fund the deposit or pay your bill with a money order or Western Union payment. Read our review.

OpenSky® Plus Secured Visa® Credit Card

Our pick for: No credit check + no annual fee

Like the regular OpenSky card, the OpenSky® Plus Secured Visa® Credit Card doesn't require a credit check or a bank account. This card, however, charges an annual fee of $0 — at the cost of a higher minimum deposit and a higher interest rate. Read our review.

Chime Credit Builder Visa® Credit Card

Our pick for: Easy account management

This card has no minimum deposit requirement, charges neither an annual fee nor interest, and doesn't require a credit check, and you can automate your payments so you're never late. But to get it, you must be a Chime banking customer, which is an extra hoop to jump through — and which comes with its own considerations when it comes to customer service. Read our review. 

Self Visa® Secured Card

Our pick for: No upfront deposit or credit check

The The Self Visa® Secured Card offers a unique path to building credit. Unlike typical secured cards, it doesn't require an upfront security deposit or a credit check. But it does make you jump through some hoops that other secured cards don't. You start by making payments on a secured loan, which become savings that you can use for your deposit. It's complicated, but for those struggling to establish a credit history, it can be efficient and effective. Read our review.

Petal® 1 "No Annual Fee" Visa® Credit Card

Our pick for: No-deposit alternative

The issuer of the Petal® 1 "No Annual Fee" Visa® Credit Card doesn’t only rely on credit scores to determine eligibility. Instead, it assesses your creditworthiness based on your income, expenses, savings and debts. The card earns a decent rate of up to 10% cash back when you use the card to shop with select merchants. And there's no annual fee, late fees or foreign transaction fees. Read our review.

Credit Builder Secured Visa® Credit Card

Our pick for: Adjustable credit limit

The Credit Builder Secured Visa® Credit Card from Armed Forces Bank makes it easy to increase your credit line over time to give you greater flexibility and keep your credit utilization low. You can increase your limit in $50 increments simply by depositing more money at any time. Read our review.

Navy Federal Credit Union® nRewards® Secured Credit Card

Our pick for: Military

The no-annual-fee Navy Federal Credit Union® nRewards® Secured Credit Card earns rewards, offers an upgrade path and even features some perks, which is a lot from a secured product — if you can swing the membership and security deposit requirements. Read our review.

DCU Visa® Platinum Secured Credit Card

Our pick for: Low fees and interest

The DCU Visa® Platinum Secured Credit Card is a secured card for bad credit, but it offers a lower interest rate than many unsecured cards for people with good credit. You must be a member of Digital Federal Credit Union to get this card, although you can join by becoming a member of a partner organization for as little as $10. Read our review.

• • •

OTHER RESOURCES

By Paul Soucy, NerdWallet

Getting a secured credit card

Who can be approved?

Even though secured credit cards are available to people with bad credit, and even though the security deposit reduces the risk to the issuer, approval is not guaranteed for everyone:

  • The issuer will usually (but not always) check your credit report for signs that you're an unacceptable credit risk. If you're in the middle of a bankruptcy, for example, or you're currently delinquent on other accounts, or you've opened a bunch of new accounts recently, you're unlikely to be approved.

  • You'll also have to show that you have income so you can pay your credit card bill. Yes, the issuer has your deposit, but it will use that money to cover your bill only as a last resort. You're expected to pay your bill every month, so you'll need income.

How does the process work?

Every issuer handles things a bit differently, but the process of applying for, receiving and using a secured credit card works like this:

  1. You apply for the card. The issuer evaluates how risky you are (a process called underwriting), and if you pass muster, you're approved.

  2. You fund the deposit. Before the issuer will open your account, you have to pay your security deposit. In some cases, you must provide bank account information with your application so the deposit can be transferred right away. Other times, the issuer will give you some time to pull together the deposit. If you neglect to fund the deposit, the issuer will change the status of your application from approved to rejected.

  3. You receive the card. Once your deposit is funded, the issuer will send you your card. You can then use it just like any other credit card. In general, it's best to use less than 30% of your available credit at any given time, so don't go maxing out your secured card. Use it for a few small purchases each month and pay them off promptly.

  4. You get your bill and pay it each month. Because secured cards tend to charge very high interest rates, it's best to pay your bill in full every month to avoid finance charges. The issuer reports your payments to the credit bureaus, which helps you build credit.

  5. You upgrade. As your credit moves from bad to average to good, you'll be in a position to qualify for better cards:

  • Some issuers automatically review your account for potential upgrade to an unsecured card. For example, Discover does this with the Discover it® Secured Credit Card after seven months. Navy Federal Credit Union starts automatic reviews after six months when you have the Navy Federal Credit Union® nRewards® Secured Credit Card. When your issuer moves you to an unsecured card, you get your deposit back.

  • With other issuers, you may have to specifically request an upgrade. That might mean converting your secured account to unsecured or closing your secured card and opening a new unsecured account. Either way, you get your deposit back.

  • If your issuer can't or won't upgrade you — and keep in mind that not all secured-card issuers even offer unsecured cards — you can apply for unsecured cards separately. Eventually you'll want to close the secured card to recoup your deposit.

Alternatives to secured credit cards

Unsecured cards for bad credit

Several issuers specialize in unsecured credit cards for people with bad credit, but NerdWallet generally doesn't recommend them. That's because these "subprime specialist" cards tend to charge high fees that can easily add up to much more than a typical minimum security deposit — annual fees up to $99, application fees, "activation" and "processing" fees, monthly maintenance fees and so on. And unlike the deposit on a secured card, those fees are money you can't get back. Our roundup of the best and worst cards for bad credit has more information on cards to avoid.

Prepaid debit cards

Prepaid debit cards offer convenience and are a safer alternative than carrying cash, but they don't help you build credit. With a prepaid debit card, you "load" money onto the card, and the purchases you make are paid for with that money. Since you're not borrowing money, there's no effect on your credit score. See NerdWallet's best prepaid cards.

Credit-builder loans

Offered mostly by smaller financial institutions, such as credit unions and community banks, these loans are designed to help you build a good payment history. The money you "borrow" isn't actually given directly to you. Instead, it's held on your behalf in a savings account while you repay the loan in monthly installments. Once you're done, the money is released to you — and your credit report shows a paid-off loan. Learn more about credit-builder loans.

Personal loans

These loans can be secured or unsecured. Unsecured loans (those without collateral, such as a car title) generally have higher interest rates than secured loans. The better your credit, the lower your rate is likely to be. Conversely, those with bad credit can expect to pay very high rates, if they can get a loan at all. Learn more about personal loans.

Last updated on June 7, 2023

Methodology

NerdWallet's Credit Cards team selects the best secured credit cards based on overall value, as evidenced by star ratings, as well as suitability for specific kinds of consumers. Factors in our evaluation include annual and other fees, security deposits (both the minimum required and maximum allowed), APRs, whether a card offers an option to upgrade to an unsecured account, the availability of free credit scores and other credit education, reporting to credit bureaus, and other noteworthy features such as a rewards program or the ability to qualify without a credit check. Learn how NerdWallet rates credit cards.

Frequently asked questions

Secured credit cards require a cash security deposit, while regular "unsecured" cards do not. The card issuer requires that you deposit some money — typically $200 or more — to open your secured card account. The deposit is there to protect the issuer in case you don't pay your bill. Because secured credit cards pose less risk to the issuer, they are generally easier to qualify for.

Secured credit cards usually require you to deposit at least $200 to $300, although some have minimum requirements as high as $500. See the chart of deposit requirements above.

No. A secured credit card is different from a prepaid debit card that you "load" with money. With prepid debit, you put money on the card, and then you spend that money when you make purchases. A secured card works just like a regular credit card: You make purchases with the card, and then you pay them off later. The deposit comes into play only if you don't make your payments. In that case, the issuer can use it to pay your debt.

In most cases, your credit limit will be equal to your security deposit. So if you deposit $300, you'll have a $300 credit limit on your card. If you deposit $1,000, you'll have a $1,000 limit, and so on. Most cards set a maximum amount you can deposit — say, $2,500 or $5,000 — which also limits your credit line.

It depends on the card. With some cards, you can increase your credit limit just by depositing more money. With others, you must apply for an increase. Some cards will automatically consider you for a credit line increase if you use the card responsibly for a while — not going over your limit and paying your bill on time every month. Also depending on the card, you might be able to get a higher credit line without depositing more money.

Yes, when you close your account in good standing (meaning you've paid off your balance) or when you upgrade to an unsecured card from the same issuer, your security deposit will be returned to you.

It depends on the card. There are excellent options that don't charge an annual fee, including several on this page. If you want a card that won't require a credit check or that charges an extra-low interest rate, you're more likely to pay an annual fee. In general, you shouldn't pay more than $50 a year for a secured card.

Secured credit card interest rates tend to be high — often well over 20% APR — although there are exceptions. Credit card issuers set interest rates according to risk: The higher the risk, the higher the rate. Since secured cards are designed for people building or rebuilding credit, they usually charge higher rates than "regular" cards. Keep in mind that if you don't carry a balance from month to month — that is, if you pay your balance in full every time — then your interest rate doesn't really matter because you don't get charged interest.

No. Even though the risk is lower, issuers of secured cards still have eligibility criteria. For example, you'll need to be able to pay your bill each month, so your application could be rejected if you don't have a job or if you have only a small income. If you have filed for bankruptcy and the case is still pending (meaning a court could wipe out any debt you put on a new card), you could be rejected. Some secured cards are designed only for people new to credit, rather than those with bad credit, so you could be rejected based on negative information on your credit report.

Use it to build your credit! Make small purchases with it regularly, and then pay those purchases off in full every month to avoid paying interest. Don't max out the card — in fact, strive to keep your balance below 30% of your limit. Ideally, you won't have this card forever. It's a tool you use to demonstrate to lenders that you can handle credit responsibly. As you build a solid payment history and your credit improves, you can start looking at cards with better benefits.

Yes, but be careful. Several specialist companies offer unsecured credit cards designed for people with bad credit, but we generally advise consumers to be cautious when applying for them. They tend to charge high fees that secured cards do not — application or "processing" fees at the beginning, annual fees as high as $99, monthly maintenance fees, and so on. And unlike a secured card deposit, none of these fees are refundable.

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