Are secured cards worth it?

Make a secured deposit to your card account and start building credit.

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Secured cards may not always be a first choice credit card, but they are great for one thing — building credit. Of course, all cards, if used responsibly, can help you build your credit, but secured cards are designed for individuals who likely can’t get approved for an unsecured card.

How do I know if it’s worth getting a secured credit card?

Ask yourself the following questions to decide if a secured credit card would be worth it for you:

  1. Do you need to build credit?
    If you have a poor credit score or no credit history at all, a secured card can certainly be worth having, and it might even be your first option to consider. Using this type of card, you can build credit over time with responsible use.
  2. Note: To build credit score with a secured card, the card provider must report your payment activity to the three major credit bureaus — TransUnion, Experian and Equifax.
  3. Do you want a card with low fees?
    In general, secured credit cards come with lower fees compared to unsecured cards for building credit. Also, most secured cards have either a low annual fee of up to $49 or have no annual fee. On the other hand, unsecured cards for building credit can cost you up to $300 per year with a variety of fees.
  4. Would you benefit from having a flexible credit line?
    Secured credit cards require that you make a deposit which will act as your credit line. Typically, your secured deposit can range from $200 to $10,000. This gives you flexibility to deposit the amount you feel comfortable with. Once you decide to close your secured credit card account, the card issuer will return your deposit if you don’t have an outstanding balance.

Who are secured credit cards best for?

If you have poor credit score and you’re struggling to build your credit, getting a secured credit card is one of the first options you should consider.

What are the pros and cons of secured credit cards?

Because secured cards are designed for building credit, there are some trade-offs to consider.

Pros

  • Low credit score requirements. Apply with a poor credit score of 300 or higher and you can still get your card approval.
  • Good for building credit. Use your card responsibly, pay your balance when it’s due and in time, and it will build your credit. Once you’re back on track, you can easily apply for a better card.
  • Rewards. Earn cash back on your purchases with some secured cards. However, the rewards rate is lower compared to their unsecured counterparts.
  • Control over your credit limit. Make a secured deposit that acts as your credit line. That way you can control the size of your credit line. Unfortunately, all card providers impose limits on the amount you can deposit.
  • Upgrade to an unsecured card. You do more than simply build your credit with a secured card. You can also get an upgrade to an unsecured card if your provider finds your card activity worth rewarding.

Cons

  • Upfront costs. Deposit a required sum to use the card. If you decide to close your account, the card issuer often returns this deposit.
  • Annual fee. Pay an annual fee of up to $49 for the card. Luckily, not all secured cards come with an annual fee.
  • Foreign transaction fee. Pay foreign transaction fees of up to 3% for each transaction made abroad or online with foreign merchants. That’s because secured cards aren’t designed for international travel.
  • No intro APR period. It’s hard to find a secured card that offers an intro APR period on purchases, balance transfers or both. Those cards that do offer this perk will likely have 6% or 9% intro APR period instead of 0%.
  • No signup bonus. Often, you won’t get to earn a signup bonus of any kind. However, there are some cards that offer this perk.

Our pick for a secured credit card

Citi® Secured Mastercard®

  • The Citi® Secured Mastercard® is a no annual fee credit card that helps you build your credit when used responsibly.
  • Unlike a debit card, it helps build your credit history with monthly reporting to all 3 major credit bureaus. Once available, you will also have free access to your FICO score online.
  • Use your card anywhere Mastercard® is accepted — worldwide.
  • A security deposit is required. Once approved, your credit limit will be equal to your security deposit (minimum of $200).
  • Get help staying on track with Auto Pay and account alerts.
  • With Flexible Payment Due Dates, you can choose any available due date in the beginning, middle or end of the month.
  • Manage your account 24/7 online, by phone, or in our mobile app.
  • The standard variable APR for Citi Flex Plan is 22.49%. Citi Flex Plan offers are made available at Citi's discretion.
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Compare secured credit cards

Updated March 30th, 2020
Name Product Filter values Minimum deposit required Purchase APR Annual fee Recommended minimum credit score
Citi® Secured Mastercard®
Starting at $200
22.49% variable
$0
580
A no annual fee secured card for people who are new to credit or have limited credit history with a fair to average credit score.
OpenSky® Secured Visa® Credit Card
Starting at $200
18.89% variable
$35
300
A secured Visa® credit card that helps you build your credit quickly.
Applied Bank® Secured Visa® Gold Preferred® Credit Card
Starting at $200
9.99% fixed
$48
300
No credit check is required for this secured card. Make a deposit of at least $200 to open this card and get a low 9.99% fixed APR on purchases.
CardMatch™ from creditcards.com
See terms
See issuer's website
See terms
300
Use the CardMatch tool to find cards you're likely to qualify for with your credit score, without a hard pull on your credit.
First Progress Platinum Elite MasterCard® Secured Credit Card
Starting at $200
19.99% variable
$29
300
Build your credit with all three major credit bureaus.

Compare up to 4 providers

When shouldn’t you get card a secured credit card

If you have fair credit score or higher, you can apply for an unsecured credit card and use better credit card perks than you would get with a secured credit card.

Bottom line

Secured credit cards are designed for individuals with a poor credit score who have difficulty qualifying for an unsecured credit card. Depending on the card, you may get a signup bonus or an intro APR period, but often you’ll have to skip these kinds of perks.

If you’re not sure whether a secured card is worth applying for, compare all your credit card options until you find what suits you best.

Frequently asked questions

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