5 Best Secured Credit Cards in Canada for 2025
A secured credit card is a great tool for building credit history or rebuilding after a bad setback. Use it wisely and keep your account in good standing, and one of Canada’s best credit cards can help strengthen your credit.
The best secured credit cards in Canada
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Best Credit Cards in Canada
Compare the best credit cards side-by-side and find a card that will meet your needs with special perks and benefits.
What to know about secured credit cards
A secured credit card works like a regular credit card but requires a security deposit, which reduces the risk to the lender.
What is a secured credit card?
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 and 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.
If you use the card responsibly, and build up a healthy credit history with a higher score, you may then be eligible for a standard, unsecured credit card. The issuer will pay back the security deposit in full (as long as there are no outstanding payments) when the account is closed.
Each secured credit card provider may have different minimum and maximum deposit requirements. Minimum deposits can be as low as $50, and maximum deposits do not typically exceed $10,000.
Secured vs. unsecured credit cards
For the most part, secured credit cards work very similarly to unsecured ones. You use the card to purchase items, up to the credit limit, and ideally pay back the balance at the end of the billing cycle.
The biggest difference between the two is that a secured credit card requires a cash deposit, which typically sets the credit limit. The deposit acts as collateral in case you fail to pay your debt. While you can’t use the deposit to pay your balance each month, the issuer will return it when you close the account in good standing.
Another difference between the two is the perks. Unsecured credit cards often come with benefits, perks and rewards not typically offered by secured cards.
Whether a secured or unsecured credit card is the best fit for you will essentially come down to your credit report and score. Generally, you can expect to need a score of at least 660 to qualify for an unsecured credit card.
If you have a history of bad credit, it will be challenging to find an issuer willing to give you an unsecured credit card that doesn’t come with steep fees and charge high rates of interest.
Check your credit score to see what option is best for you.
How does a secured credit card work?
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 in-person and online 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.
What is the security deposit for a secured credit card?
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.
What is the credit limit for a secured credit card?
Typical credit limits
Credit limits vary with each provider, but you can start with as little as a $50 security deposit and can go up to as much as $10,000.
How to increase credit limits
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.
Making payments
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.
Typical secured credit card rates
Secured credit card interest rates vary, from as low as 14.90%, as with Home Trust’s low-interest option, to as high as 29.99%.
Use our credit card interest calculator to see how much you’ll owe if you don’t pay off your balance.
How to get a secured credit card
The process for getting a secured card is similar to getting any credit card.
Secured cards are typically aimed at people who are just entering adulthood or are new to Canada and need to build up a credit history. They are also intended for people who would have a hard time getting an unsecured card, like those with bad credit. For that reason, secured credit cards are easier to get than unsecured credit cards.
Eligibility
Credit card issuers tend to be much more flexible with their eligibility requirements for a secured card.
Credit score needed for a secured card
Because secured cards are designed for people with no or bad credit, an issuer may not even consider an applicant’s credit score. Many secured credit card issuers will approve applicants regardless of their credit scores.
Income requirements
Secured credit cards do not tend to have strict or clearly stated income requirements.
Usually, you just need to be able to provide the security deposit and can’t be in bankruptcy.
Other requirements
Aside from providing a minimum amount for a security deposit, you generally need to be a Canadian resident who is the age of majority in your territory or province.
How to choose the right secured credit card
Briefly, here are some things to consider when choosing a credit card.
Credit bureau reporting
The main point of having a secured credit card for most users is to build a credit history and improve their credit score, so it’s important to ensure that the issuer is reporting payments to a credit bureau.
Affordable deposit
Carefully consider your budget and how much money you can afford to tie up indefinitely as a security deposit. Do you have enough savings in your emergency fund to cover both the security deposit and an unexpected expense, for example?
Low or no fees
Annual fees can vary significantly among issuers, so be sure to check the cost of each card when making your selection.
Ability to switch to unsecured
One reason to consider going with a credit card issuer that also has unsecured credit card options is that it can be easier to switch to another type of credit card after you’ve built up your credit.
Application process for a secured credit card
Some major banks in Canada don’t advertise secured credit cards on their websites. They may offer secured cards to some applicants, but you must generally contact the bank to apply.
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 steps listed, which will go something like this:
Review the terms and conditions and accept them.
Provide personal information like your name and social insurance number (SIN).
Employment details.
Indicate whether you want to include an authorized user.
Submit your application.
If approved, pay your deposit. The method by which you pay the deposit varies among banks, but may include mailing a cheque or completing a bank transfer.
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.
Where to get a secured credit card in Canada
Most major banks in Canada don’t offer dedicated secured credit cards – or at least, they don’t advertise that they do. You can contact them to ask about secured card options that might fit your needs, but you’ll generally have more luck with smaller banks or alternative financial institutions that carry dedicated secured credit cards.
Who offers secured credit cards?
Financial institution | Secured credit card |
|---|---|
TD Canada Trust | Secured cards are available but require an in-branch appointment to apply. |
Royal Bank of Canada (RBC) | None available. Credit-building options are available for newcomers, students, and others. Contact RBC directly for details. |
Canadian Imperial Bank of Commerce (CIBC) | None available. Credit-building options are available for newcomers, students, and others. Contact CIBC directly for details. |
Bank of Montreal (BMO) | None available. Credit-building options are available for newcomers, students and others. Contact BMO directly for details. |
Scotiabank | None available. Credit-building options are available for newcomers, students, and others. Contact Scotiabank directly for details. |
National Bank of Canada | No advertised online. Credit-building options are available for newcomers, students, and others. Contact NBC directly for details. |
KOHO Financial | None available, but offers an optional Credit Building feature (at a cost) with KOHO’s prepaid card and unsecured credit cards. |
Home Trust | Home Trust Secured Visa Card. Home Trust Secured Visa card (No Annual Fee). |
Capital One | Capital One Guaranteed Secured Mastercard. |
Tims Financial | Secured Tims Mastercard. |
Neo Financial | Secured Neo Mastercard. |
Credit union secured credit cards
Some credit unions in Canada offer secured credit cards, such as Vancity and ATB. If you live within an area they operate, you can contact them for more details.
Advantages and disadvantages of secured credit cards
Advantages
Ability to build credit and improve your score.
Easy to get, even for those with no or bad credit.
Some may offer rewards like cash back.
Disadvantages
Cash security deposit is required. You won’t get back your security deposit funds back until you close the account, which can be a significant financial burden.
Monthly or annual fees may apply.
High rates of interest may apply.
What to ask before using a secured credit card
How do I add money to a secured credit card?
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.
Should I pay my secured credit card early?
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 and improve your score.
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.
How long should I keep a secured credit card?
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. It’s a good idea to aim for a score of at least 660 before applying for an unsecured card for the greatest chance of qualifying and to get the best terms.
What happens if I close my secured credit card?
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.
What are the alternatives to secured credit cards?
Unsecured credit cards for bad credit are very difficult to successfully apply for without credit history or a strong credit score. If you have a history of bad credit, it will be challenging to find an issuer willing to give you an unsecured credit card that doesn’t come with high fees and charge high rates of interest.
Prepaid cards are another handy way to make purchases without cash. Because you have to load them with your own money, prepaid cards can also help you curb spending and avoid accumulating high-interest debt.However, unlike unsecured credit cards, your transactions are not typically reported to credit bureaus. That means prepaid cards can’t help you improve your credit score or establish a credit history.
Student credit cards are available for students who don’t have a built-up credit history, so eligibility requirements are more relaxed. While some student cards are available only to those enrolled in a college or university, most are technically available to anyone.
Credit cards for Canadian newcomers are designed for recent arrivals who don’t yet have a Canadian credit history. Many banks offer unsecured cards through newcomer packages, often featuring no annual fees, rewards, and travel perks.
What Reddit has to say
To find the best secured cards in Canada, NerdWallet’s credit card experts review numerous options available on the market. But our Nerds know it can also be helpful to hear what everyday cardholders think. We took to Reddit to find out what users are saying across multiple threads.
Redditors mostly agree with NerdWallet’s secured card picks.
As of this writing, Redditors suggest that some of the best secured cards are the Secured Neo Mastercard and Home Trust Secured Visa, both of which made our list. They also recommend the KOHO Prepaid Mastercard, which technically isn’t a secured card but a prepaid card. However, it functions similarly to a secured card if you pay for the optional Credit Building feature. Some Redditors also favor cards that didn’t make our list, like the Capital One Guaranteed Secured Mastercard.
Frequently asked questions
What is an unsecured credit card?
What is an unsecured credit card?
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 a security deposit.
Because no collateral is needed, unsecured cards tend to require applicants to have good credit scores and may also require proof of a minimum annual income.
Are credit cards secured debt?
Are credit cards secured debt?
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.
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