5 Best Secured Cards Overview

Secured credit cards are a great choice for individuals looking to establish or rebuild their credit, especially if their credit score is under 600. Unlike traditional unsecured credit cards, secured credit cards require a refundable security deposit, which serves as collateral and sets your credit limit. The primary purpose of a secured card is to help you build or improve your credit score through responsible use and timely payments.

Finding the right secured credit card is crucial, as the best options offer manageable fees, helpful credit-building tools, and favorable terms. To help you get started on your credit journey, we’ve compiled a list of the five best secured credit cards available today. These options cater specifically to people with lower credit scores, providing the opportunity to improve your financial standing and eventually qualify for better cards with higher rewards and perks.

1. OpenSky® Secured Visa® Credit Card

Read our review here.

The OpenSky® Secured Visa® Credit Card is a popular choice for those who need to build credit from scratch or rebuild their existing credit score. What makes this card unique is that it doesn’t require a credit check during the application process, making it accessible for people with poor credit or no credit history at all. Here’s why the OpenSky® card stands out:

• No Credit Check Required: One of the most appealing features of the OpenSky® card is that it does not perform a credit inquiry when you apply. This is ideal for individuals with a credit score under 600 who may have been turned down for other credit products.
• Flexible Security Deposit: The security deposit ranges from $200 to $3,000, which gives you some control over your credit limit. Your deposit acts as collateral, so it’s refundable when you close your account or transition to an unsecured card.
• Annual Fee: The card has a $35 annual fee, which is relatively affordable compared to other secured cards. This fee helps keep the card accessible while offering a solid credit-building opportunity.
• Reports to All Three Major Credit Bureaus: The OpenSky® card reports your payment history to Experian, Equifax, and TransUnion, ensuring that your responsible credit use can help improve your credit score over time.

Overall, the OpenSky® Secured Visa® is a great option for anyone who wants to improve their credit without a credit check. However, it doesn’t offer rewards or cash-back programs, which may be a drawback if you’re looking for additional benefits.

2. Discover it® Secured Credit Card

Read our review here.

The Discover it® Secured Credit Card is one of the best options available for individuals who want to build credit while earning rewards. This card offers cash back on purchases, making it a standout choice in the secured card market.

• Cash-Back Rewards: The Discover it® Secured Card offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. Plus, you’ll earn unlimited 1% cash back on all other purchases. As a bonus, Discover matches all the cash back you’ve earned at the end of your first year.
• No Annual Fee: There is no annual fee for this card, which is a significant advantage for those who want to avoid extra costs while building credit.
• Free FICO® Credit Score: Cardholders can monitor their progress with free access to their FICO® Credit Score. This tool helps you track your credit-building efforts and make adjustments as needed.
• Transition to an Unsecured Card: After seven months of responsible use, Discover automatically reviews your account to determine if you qualify to graduate to an unsecured card, making it a great stepping stone in your credit journey.
• Reports to All Major Credit Bureaus: Your payment history is reported to Experian, Equifax, and TransUnion, helping you establish a positive credit history.

The Discover it® Secured Credit Card is ideal for those who want to earn rewards while working on their credit score. The absence of an annual fee and the opportunity to upgrade to an unsecured card make it a top choice for secured credit cards.

3. Capital One Platinum Secured Credit Card

Read our review here.

The Capital One Platinum Secured Credit Card is an attractive option due to its flexible security deposit requirements and the potential to increase your credit limit without additional deposits.

• Low Minimum Security Deposit: Depending on your creditworthiness, you may qualify for a $200 credit limit with just a $49, $99, or $200 security deposit. This flexibility makes it accessible for a wide range of individuals.
• Credit Limit Increases: Capital One automatically reviews your account for credit limit increases after six months of on-time payments. This can help improve your credit score by lowering your credit utilization ratio.
• No Annual Fee: There is no annual fee associated with this card, which means you can focus solely on building your credit without worrying about extra costs.
• Reports to All Major Credit Bureaus: Your payment history is reported to Experian, Equifax, and TransUnion, helping you establish a positive credit history.

The Capital One Platinum Secured Credit Card is a great choice for those who need a secured credit card with a low initial deposit and the potential for credit limit increases over time.

4. Citi® Secured Mastercard®

Read our review here.

The Citi® Secured Mastercard® is designed for individuals who are new to credit or looking to rebuild their credit score. It offers straightforward terms and is a good choice for those who want a simple, no-frills card to establish a solid credit history.

• No Annual Fee: There is no annual fee, which helps keep costs low as you work on improving your credit.
• Security Deposit: The required security deposit ranges from $200 to $2,500, and this deposit serves as your credit limit. It is fully refundable when you close your account in good standing or transition to an unsecured card.
• Reports to All Three Major Credit Bureaus: Citi reports your payment history to the major credit bureaus, ensuring that your responsible use can help boost your credit score.
• Credit-Building Resources: Citi provides access to resources and tools to help you learn about credit and manage your account effectively, making it easier to achieve your financial goals.

The Citi® Secured Mastercard® is a good option for individuals who prefer a basic card with no rewards but want a reputable issuer to help them establish or rebuild their credit.

5. BankAmericard® Secured Credit Card

Read our review here.

The BankAmericard® Secured Credit Card is another solid choice for those who want to establish credit, with added benefits for existing Bank of America customers.

• Flexible Security Deposit: The security deposit can range from $200 to $5,000, depending on your preference and ability to pay. Your credit limit is equal to your deposit.
• No Annual Fee: There is no annual fee, which keeps the card accessible to individuals looking to improve their credit without incurring extra costs.
• Graduation to an Unsecured Card: Bank of America reviews your account after 12 months to determine if you’re eligible to transition to an unsecured credit card, making this card a great choice for long-term credit improvement.
• Access to FICO® Score: Cardholders can view their FICO® Score for free, which allows them to track their credit-building progress.
• Reports to All Major Credit Bureaus: Your payment history is reported to Experian, Equifax, and TransUnion, helping you establish a positive credit history.

The BankAmericard® Secured Credit Card is a good option for individuals who prefer to bank with Bank of America and want a straightforward credit-building tool. Its benefits include no annual fee, flexible security deposits, and the possibility of graduating to an unsecured card.

Why Choose a Secured Credit Card?

Secured credit cards are specifically designed for individuals who have a poor credit score (under 600) or no credit history at all. They offer several advantages that can help you build a strong credit foundation:

• Easy Approval Process: Since the security deposit minimizes the lender’s risk, secured cards are more accessible for people with low credit scores. Some options, like the OpenSky® Secured Visa®, do not require a credit check, making it easier for those with past credit issues to qualify.
• Credit Building: With responsible use, secured cards help improve your credit score by reporting your payment history to the credit bureaus. Timely payments and low credit utilization can lead to an increase in your score over time.
• Path to Unsecured Cards: Many secured credit cards offer the opportunity to transition to an unsecured card after demonstrating responsible credit management, giving you access to more benefits and rewards.

How to Use a Secured Credit Card to Improve Your Credit

To get the most out of your secured credit card, follow these best practices:

1. Make On-Time Payments: Payment history is the most important factor in your credit score. Always pay your bill on time to avoid late fees and negative marks on your credit report.
2. Keep Your Balance Low: Aim to keep your credit utilization below 10% of your credit limit. For example, if your credit limit is $500, try to maintain a balance under $50.
3. Monitor Your Credit Score: Many secured cards offer access to your credit score. Regularly check your score to track your progress and identify areas for improvement.
4. Transition to regular, unsecured credit cards: After your credit has been established and your credit scores have improved, you’ll want to look at transitioning to regular, unsecured cards so you can start taking advantage of all the benefits, rewards, and perks regular, unsecured cards offer. This is especially true once your credit scores have improved to 670+ and you can start getting approved for more premium card offerings that have extensive rewards structures. Check out our article on the 10 Best Rewards Cards here when you get to this stage.

Note that if your credit is in poor condition due to previously defaulted cards, collection, late payments, etc., it may be in your best interest to have a professional credit analyst review your credit profile. They will go over with you what can be done to improve your credit score in more extensive detail as it may involve more than just establishing some secured cards, as important as establishing credit is in the process of improving your credit profile.

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Conclusion

Choosing the right secured credit card is essential for anyone looking to establish or rebuild their credit, particularly those with a credit score under 600. The five options discussed here—OpenSky® Secured Visa®, Discover it® Secured Credit Card, Capital One Platinum Secured Credit Card, Citi® Secured Mastercard®, and BankAmericard® Secured Credit Card—offer varying benefits to meet different needs.

By selecting the best secured credit card for your situation and using it responsibly, you can set yourself on a path toward a better credit score, improved financial opportunities, and the chance to qualify for unsecured credit cards with more rewards.