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Published September 14, 2022

How to Choose a Secured Credit Card

Choosing a secured card that reports to Canadian credit bureaus is crucial to getting the most value out of these credit-building products.

Secured credit cards are a tool that can help you establish, build or improve credit history, but they are not all created equally.

If you’re looking for a secured credit card, keep in mind its main purpose is to help you build credit. Knowing this can help you compare and prioritize a card’s key features, such as credit bureau reporting, low fees and an affordable security deposit.

1. Verify reporting to Equifax or TransUnion

Whether your goal is to establish and build a credit history or strengthen your credit score, be sure that any secured credit card under consideration will report your payments to at least one of Canada’s main credit bureaus — Equifax and TransUnion. If your payments aren’t reported, the card won’t have any impact on your credit.

It’s not always possible to verify whether a card issuer reports payments to a credit bureau just by checking its website. If you’re uncertain, ask the provider before applying for a secured card.

Some examples of secured cards that report include:

Secured cards that report to credit bureaus

Home Trust Secured Visa Card

  • Annual Fee
    $59
  • Interest Rates
    14.90% / 19.80%
  • Minimum Deposit
    $500
  • Maximum Deposit
    $10,000
  • Our Take
    Why we like it

    The Home Trust Secured Visa offers a straightforward, no-frills experience for credit builders. Plus, there are two secured credit card options to fit a variety of needs: a no-fee card, and a low-interest card with a $59 annual fee.

    Pros
    • Low interest rate.
    • Payments are reported to both credit bureaus.


    Cons
    • You’ll need to budget for the annual fee.
    • No ability to earn rewards on purchases.
  • Product Details
    • $59 annual fee.
    • $500 minimum security fund deposit required.
    • $10,000 maximum security fund deposit.
    • Hard credit checks are made on Home Trust Secured Visa applications.
    • Credit activity, including every payment, is reported to TransUnion and Equifax, the two major consumer credit bureaus in Canada.
    • Ability to upgrade to an unsecured credit card.
    • Manage your account and billing with online banking.
    • Cardholders can choose between a card with no annual fee and 19.99% interest or an annual fee of $59 and 14.90% interest.
    • Protection against fraud through Visa’s Zero Liability Policy.
    • Preferred rates: 14.90% for purchases, 19.80% for cash advances.
    • To be eligible, you must have a source of income and cannot currently be in bankruptcy. You must be able to provide security funds and be a Canadian resident of the age of majority in the province or territory where you live. The Home Trust Secured Visa Card is not available to Québec residents.

Refresh Secured Card

  • Annual Fee
    $48.95
  • Interest Rates
    17.99%
  • Minimum Deposit
    $500
  • Maximum Deposit
    $10,000
  • Our Take
    Why we like it

    The Refresh Secured Card comes with a host of free financial tools and educational resources, making it a great choice for both credit score beginners and those who need to rebuild their credit history.

    Pros
    • A low $200 minimum deposit makes this card accessible to most consumers.
    • Card holders can benefit from free credit reports, weekly updates, and financial education courses.


    Cons
    • You’ll need to budget for the annual fee and monthly maintenance costs.
    • Since Refresh doesn’t offer unsecured credit cards, there’s no ability to upgrade to an unsecured credit card.
  • Product Details
    • $48.95 annual cost: $12.95 annual fee + $3 monthly maintenance fee ($36 over the course of one year).
    • $200 minimum security fund deposit required.
    • $10,000 maximum security fund deposit.
    • Hard credit checks are not made on Refresh Financial Secured Card applications.
    • Credit activity, including every payment, is reported to TransUnion and Equifax, the two major consumer credit bureaus in Canada.
    • Guaranteed approval, as long as you meet eligibility requirements.
    • Get your credit report and credit score for free, plus weekly updates.
    • Access to free financial education through Refresh f.i.t.
    • Refresh Financial also offers Credit Builder Loans across Canada (excluding Saskatchewan, Quebec, and New Brunswick).
    • 17.99% annual interest rate.
    • To be eligible, you must be able to provide security funds and be a Canadian resident of the age of majority in the province or territory where you live. Refresh Secured Card is not available to Saskatchewan or New Brunswick residents.

Plastk Secured Rewards Card

  • Annual Fee
    $120
  • Interest Rates
    17.99% / 21.99%
  • Minimum Deposit
    $300
  • Maximum Deposit
    $10,000
  • Our Take
    Why we like it

    The Plastk Secured Rewards Card features a welcome offer, the ability to earn rewards on every purchase, and a subscription service with credit monitoring and financial education resources.

    Pros
    • Intro offer includes a 0% promotional interest rate for the first three months and a sign-up bonus of 5,000 points ($20 value).
    • Earn rewards on every purchase.


    Cons
    • It’s not just the annual and monthly maintenance fees that add up — card holders will need to carefully read the terms and conditions for hidden costs, like the $35 charge for dishonoured payments, the 4.5% foreign conversion fee, or the chance of getting hit with a 29.99% interest rate after two late payments in a year.
    • Credit activity is only reported to one credit bureau.
    • You’ll find a lot of negative consumer reviews for this card across the web — especially with the Better Business Bureau (bbb.org) and on the Apple and Google Play app stores.
  • Product Details
    • Intro offer: Receive 0% Interest Rate on purchases for the first 3 months when you sign up for the Plastk Secured Credit Card. In addition, new Plastk Secured Visa card holders can earn 5,000 points ($20 value), redeemable after three months. Terms and conditions apply. Click "Apply Now" for more information.
    • Earn 250 Plastk points on every $1 spent. Plastk points are worth $0.004.
    • Redeem points for statement credits, gift cards, merchandise, exclusive member events and other perks.
    • $120 annual cost: $48 annual fee and $6 monthly maintenance fee ($72 over the course of one year).
    • $300 minimum security fund deposit required.
    • $10,000 maximum security fund deposit.
    • Hard credit checks are not made on Plastk Secured Rewards Card applications.
    • Credit activity is reported to Equifax, one of the two major consumer credit bureaus in Canada.
    • Guaranteed approval, as long as you meet eligibility requirements.
    • Access your full credit report powered by Equifax, ability to monitor your credit report, receive daily alerts, and receive financial education through Plastk Sentinel, a subscription service available for $15.99 monthly or $149.99 annually (plus applicable taxes).
    • Refer a friend for the chance to earn 1,250 Plastk reward points ($5 value).
    • Preferred rates: 17.99% for purchases, 21.99% for cash advances. If you are late making two minimum payments within a calendar year, you will be charged the default interest rate of 29.99%.
    • To be eligible, you must be able to provide security funds and be a Canadian Citizen or a Permanent Resident and the age of majority in the province or territory where you live.
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2. Find a minimum deposit you can afford

Secured credit cards require a security deposit to open an account, which is typically equal to your credit limit. The minimum required security deposit is another important factor to consider when deciding which secured card is best for you.

In many cases, you can’t get approved for the card until you transfer the full amount of your security deposit to the issuer, which can be hundreds of dollars in some cases. If your cash flow is limited, a card with a lower deposit requirement might be best for your budget.

Some examples of low-deposit secured credit cards include:

Secured credit cards with low minimum deposits

Neo Secured Credit Card

  • Annual Fee
    $0
  • Interest Rates
    19.99%-24.99%
  • Minimum Deposit
    $50
  • Maximum Deposit
    $10,000
  • Our Take
    The Neo Secured Credit Card is a no-fee card that earns cash back rewards and offers access to high-interest savings.

    Pros
    • A small $50 minimum deposit makes this card accessible to consumers of all budgets.
    • Earn up to 15% cash back on purchases with select Neo partners.


    Cons
    • Interest rates could be as high as 24.99% for some users.
    • While Neo plans to report card activity to TransUnion, the company has confirmed that this function isn't fully operational yet, so the credit-building benefits of this card will be delayed.
  • Product Details
    • Earn a 0.5% cash back guarantee, an average of 5% unlimited cash back at thousands of Neo partners, and up to 15% cash back on your first purchase at participating partners.
    • No annual fee for the Standard rewards plan.
    • $50 minimum security fund deposit required.
    • $10,000 maximum security fund deposit.
    • To apply, visit member.neofinancial.com and create an account. Select “Credit”, pick either the Neo Card or the Hudson’s Bay Mastercard, and then choose “Secured Card” as the type of credit you are looking for.
    • Hard credit checks are not made on applications.
    • Guaranteed approval, as long as you meet eligibility requirements.
    • Ability to upgrade to an unsecured rewards credit card.
    • Link your account to a Neo Money account and earn 2.25% interest on savings.
    • Purchase rates range from 19.99%-24.99%. The standard rate on purchases and cash advances is dependent on Neo Financial’s assessment of your credit application, credit profile, and your province.
    • To be eligible, you must be able to provide security funds and be a Canadian resident of the age of majority in the province or territory where you live.

Capital One Guaranteed Secured Mastercard

  • Annual Fee
    $59
  • Interest Rates
    19.80% / 21.90%
  • Minimum Deposit
    $75
  • Maximum Deposit
    $2,500
  • Our Take
    Why we like it

    The Capital One Guaranteed Secured Mastercard is one of the few secured credit cards that comes with a suite of insurance benefits and premium perks.

    Pros
    • Price protection, extended warranty, travel benefits and several types of insurance, including up to $250,000 in Common Carrier Travel Accident Insurance are included.
    • A low $75 minimum deposit is affordable for most consumers.


    Cons
    • No ability to earn rewards on purchases.
    • Your credit limit can’t surpass the $2,500 maximum security funds deposit, which is lower than what other secured credit cards typically offer.
  • Product Details
    • $59 annual fee.
    • $75 or $300 minimum security fund deposit is required.
    • $2,500 maximum security fund deposit.
    • Hard credit checks are made on Capital One Guaranteed Secured Mastercard applications.
    • Credit activity, including every payment, is reported to TransUnion and Equifax, the two major consumer credit bureaus in Canada.
    • Ability to upgrade to an unsecured credit card.
    • Guaranteed approval, as long as you meet eligibility requirements.
    • Includes Capital One Price Protection Service, Purchase Assurance, and Extended Warranty coverage that automatically doubles the original manufacturer’s warranty for up to two years on most items.
    • Cardholders benefit from Mastercard Global Service, which includes emergency cash advances, and Zero Liability for unauthorized use of the card.
    • Access to travel benefits: Common Carrier Travel Accident Insurance (up to $250,000), a Car Rental Collision/Loss Damage Waiver, baggage delay, and travel assistance.
    • Preferred rates: 19.80% for purchases and balance transfers, 21.90% for cash advances.
    • To be eligible, you must be able to provide security funds and be the age of majority in the province or territory where you live. In addition, you don’t have an existing Capital One account or a pending application for one, haven’t applied for a Capital One account more than once in the last 30 days or had a Capital One account that was not in good standing in the last year.
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3. Compare fees

Generally, it’s a good idea to avoid annual fees and other fees on credit cards, if possible. Some credit card providers are clear about their fees, but other may require you to sift through the fine print. Be on the lookout for:

  • Inactivity fees.
  • Higher-than-normal foreign transaction fees.
  • Monthly fees on top of an annual fee.

If you have bad credit and find it tough to get approved for a secured card, it may be worth paying an annual fee in exchange for a more flexible approval process. Alternatively, you can also seek out a prepaid card that has the ability to help you build credit while avoiding debt. They’re rare, but they do exist.

4. Seek providers offering both secured and unsecured cards

Some providers that offer a variety of credit cards may automatically offer to upgrade cardholders to unsecured cards — otherwise known as traditional credit cards — after a certain period of responsible usage. That includes on-time and regular payments, which can improve your credit score.

The best way to ensure a chance of getting upgraded is to choose a credit card company that has both secured and unsecured credit cards. That may make the process of being upgraded from a secured to an unsecured card with the same issuer can be fairly seamless when the time comes.

If you opt for a provider that specializes only in unsecured cards , you’ll have to switch card issuers when you’re ready to upgrade. However, switching providers is manageable, and shopping around can help you find the best card for your needs.

Best Secured Credit Cards in Canada

Compare all different secured credit cards side-by-side and find out the best card that will meet your need with special perks and benefits

5. Be aware of approval timeline

Secured cards generally don’t offer instant approval because you need to provide a security deposit to be officially approved for a card. That said, some card providers all but guarantee approval as long as you meet the basic requirements (like being the age of majority and a resident of Canada) and provide a deposit.

6. Compare perks, rewards and other benefits

It’s nice to get cash back or rewards when using a credit card, but the primary purpose of a secured card is to build credit, so rewards and benefits should be of secondary concern. Still, some secured credit card providers offer cash back rewards or other perks that can enhance the experience of being a cardholder.

About the Author

Sandra MacGregor

Sandra MacGregor has been writing about personal finance, investing and credit cards for over a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star. You can follow her on Twitter at @MacgregorWrites.

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