5 Best Secured Credit Cards in Canada for 2025

An unsecured credit card, more commonly known as a traditional or regular credit card, is a card that does not require a security deposit for approval. The credit card issuer “trusts” that the cardholder will make regular payments and therefore does not require collateral. This “trust” is primarily based on the cardholder’s credit history and credit score. A good credit score implies the cardholder can repay their debts and handle credit responsibly.

Check your credit score before you apply for an unsecured option to make sure you have a good enough score to qualify.

Secured debt is a type of debt in which the borrower provides some form of collateral (such as cash or a car) to guarantee repayment of the debt. Secured credit cards are a form of secured debt because you pay a cash security deposit as collateral.

A secured credit card requires the cardholder to provide a cash security deposit to open an account. The card’s credit limit is typically the same as the security deposit. So, for example, if your deposit is $500, you’ll have a $500 credit limit.

The deposit acts as a form of collateral, reducing the risk for the credit card provider. If the secured credit cardholder doesn’t make their payments, the issuer can use the deposit to pay off the debt. This is why secured credit cards tend to be easier to qualify for than unsecured, regular credit cards — making them ideal for people with poor credit or no credit history.

When used responsibly, paid on time and in full, a secured credit card can build your credit. If your score is high enough, you’ll likely qualify for a traditional unsecured credit card that does not require a deposit.

As you would with a regular, unsecured credit card, you will want to pay your bill in full and on time. To keep your account in good standing, you’ll need to pay at least the required minimum payment each billing cycle.

Remember, the security deposit acts as collateral, and won’t pay off charges to the card. The deposit is only used if the cardholder defaults on payments.

A secured credit card works like a regular, unsecured credit card once you’ve been approved and provided the required security deposit. You can use a secured credit card to make purchases and then pay off your balance in full, or make the minimum payment each month.

As with a traditional credit card, unpaid balances typically accrue interest, so it’s a good idea to pay off the bill in full when it’s due.

The issuer usually reports your payments to Canada’s credit bureaus, just like standard credit cards. As long as you use your card responsibly and make your payments on time, your credit score will rise. If boosting your credit score is your goal, make sure your payments are being reported — not all issuers report to the credit bureaus.

The security deposit for a secured credit card can vary widely depending on the issuer. With few exceptions, most secured credit cards in Canada require a deposit of at least $50.

Credit limits vary with each provider, but you can start with as little as a $50 security deposit and can reach upward of $10,000.

Each provider may have a different method for increasing your credit limit. As long as it falls within the maximum allowable amount, you should be able to increase your limit if you can provide the security funds.

Secured credit card interest rates vary, from as low as 11.25% to as high as 25.90%, according to NerdWallet's analysis.

As of this writing, the following institutions offer secured cards:

The method to add money to a secured card varies among providers. It may just be a matter of contacting your credit card issuer and telling them you want an increase, then providing the funds. Or you may be able to increase your limit online with an e-transfer.

A secured credit card can be a helpful tool to build your credit history and score, but only if used wisely. For this reason, it’s a good idea to make payments in full and on time each month to avoid interest charges.

While you don’t have to make payments early, it may be a good habit to adopt if you tend to be late or forget to make payments. You may also consider setting up automatic payments or alerts when your balance is due.

It’s advisable to keep a secured credit card until you start to see an improvement in your score and feel confident that you can successfully apply for an unsecured credit card. A credit score of at least 660 will help you qualify for an unsecured card, but as a general rule of thumb, the higher your score, the better your chances of approval.

If you cancel your secured card, you’ll get your full security deposit back as long as you don’t have any pending charges or a balance remaining on the card.

Some smaller banks and alternative financial institutions that issue dedicated secured credit cards allow prospective cardholders to apply online, and many offer instant or guaranteed approval.

The process is the same as applying for an unsecured credit card. You simply hit the “apply” icon on the website and follow the prompts, such as:

If you aren’t approved, make sure to wait about six months before applying for another card as credit card issuers view multiple card applications in quick succession as a sign of financial distress.