Best Secured Credit Cards

For someone with low credit or no credit, it can be quite challenging to apply for a credit card. Oftentimes, you’ll need a good credit score to get approved for many credit cards, but you also need a credit card to build your credit score in the first place! This is where a secured credit card comes in. 

Secured credit cards generally require a minimum deposit amount that hovers around $200. This minimum deposit must be kept at all times and failure to do so could result in the card being deactivated. Similarly, the deposit amount is used as insurance in case the cardholder defaults on their credit card payments. 

Another great benefit of secured credit cards is that they have greater approval rates than other credit cards. People with low credit or no credit history at all can take advantage of a secured credit card to gradually build their credit score. So if you are looking for a credit card that helps with rebuilding your credit, a secured credit card is a great option to consider.

Some secured credit cards, like the Discover it Secured, even offer cash back rewards. As a result, cardholders can enjoy the best of both worlds: the standard cashback rewards offered by most credit cards and an easy way to build credit history without accumulating too much debt.

Now you might be wondering: how can a secured credit card help me avoid a large amount of debt? Most secured credit cards have a credit limit that is equal to the deposit amount or slightly larger. This restrictive credit limit ensures that cardholders can only make purchases that they can afford with their deposit amount. The credit limit can also be a drawback to some cardholders because it’ll be more difficult to finance large purchases with a secured credit card. If you go over the credit limit, you could be charged with a penalty fee.

Here are some of our top recommendations for secured credit cards:

• Discover it Secured: The Discover it Secured card is one of the best options for cardholders looking to maximize rewards while also rebuilding credit. This card offers 2% cash back on restaurants and gas stations and 1% cash back everywhere else. Moreover, this card does not have an annual fee, so cardholders earn great cash rewards while also saving money on pesky fees. Lastly, this card comes with free FICO credit score reports, so cardholders can stay up to date on their credit score as they build their credit history with the Discover it Secured card.
• OpenSky Secured Visa Credit Card: While the OpenSky Secured Visa Credit Card does come with an annual fee, it makes up for this by offering great flexibility to cardholders. When applying for this card, OpenSky won’t check your credit score, so anyone can use this secured credit card. Additionally, a bank account isn’t required to use this credit card. Cardholders can pay the minimum $200 deposit with a money order or a Western Union payment. Therefore, the OpenSky Secured Visa Credit Card is a great option for cardholders with no credit history looking to gradually raise their credit scores.
• First Progress Platinum Select Credit Card: The First Progress Platinum Select Credit Card comes with a $39 annual fee, but almost every cardholder is eligible for this card. Like the OpenSky Secured Visa Credit Card, cardholders don’t have to worry about their credit score getting in the way of the application process, as this card does not have a minimum credit score requirement. One thing to be aware of is that the First Progress card comes with a maximum credit limit of $2,000. So while this can be a great card for people looking to rebuild their credit, it isn’t very great for people who make large purchases.

Takeaways

Secured credit cards are a great option for people looking to gain experience with credit cards or for cardholders with low credit. They are not as risky as regular credit cards because they come with a low credit limit. Therefore, new cardholders using a secured credit card don’t have to be as worried about accumulating large debt, as secured credit cards come with many features to protect cardholders. If you’re new to credit cards or simply want a credit card to rebuild your credit, a secured credit card might be the way to go.