Secured Credit Cards

If you have a poor credit history, or don’t have a credit score at all, a secured card might be your best option for restoring or building financial health. Most secured cards require you put down a security deposit which typically serves as your credit limit. This security deposit also serves as collateral for your credit card provider in the event you miss payments, which makes creditors more likely to approve your application regardless of your credit score.

Using your secured card responsibly and paying your balance in full each month will start improving your credit score so you can graduate to an unsecured credit card.

Best for building credit with no credit check
Refresh Financial Secured Card

Credit recommended (300-)Apply nowon Refresh Financial's secure site

300
Min. credit score

$12.95
Annual fee

17.99% fixed
Purchase APR

From $200
Min. deposit

• Info
• Pros & cons
• Details

Build up your credit score and control your monthly spending with the Refresh Financial Secured Card. With a monthly fee of $3 and an annual fee of $12.95, you can focus on rebuilding your credit score while getting access to a monthly credit limit between $200 - $10,000.

• No credit check is required for approval of this secured credit card.
• This secured card offers an interest rate of 17.99%, which is typically lower than most cards offered in Canada.
• With a secured card, you're offered the chance to work on improving your credit score. Timely repayments will be reported to the credit bureau, which means you can improve your score over time.
• Your monthly credit limit is determined by the amount of your security deposit, keeping you in control of your card. Credit limits start from a minimum of $200 to a maximum of $10,000.
• You get access to free educational financial training on their online portal called Refresh f.i.t.

• If you don't pay your balance in full by the end of the month, you'll be charged a 17.99% interest rate.
• If you don't use your card within the month, you'll be charged a $2 inactivity fee.
• The $3 monthly fee combined with the $12.95 yearly fee can really add up.

Annual fee	$12.95
Purchase APR	17.99% fixed
Balance transfer APR	N/A
Recommended minimum credit score	300

Best for ongoing low interest rate
Home Trust Secured Visa

Credit recommended (300-)Apply nowon Home Trust's secure site

300
Min. credit score

$0
Annual fee

14.9% fixed
Purchase APR

From $500
Min. deposit

• Info
• Pros & cons
• Details

Home Trust offers a secured visa card that acts as a revolving line of credit. You submit a security deposit at the time of application, and, if approved, your deposit becomes your credit limit. Charge purchases to your card, get cash advances and make payments just like a non-secured credit card. Your security deposit will be returned if you close your account, after all purchases and fees have cleared.

• Pay 14.9% interest on your purchases. Alternatively, you can choose the Home Trust Secured Visa, which comes with an annual or monthly fee but a lower interest rate.
• The amount of security deposit you offer up will determine your monthly credit limit. Credit limits range from $500 to $10,000.
• Home Trust is a member of the Canada Deposit Insurance Corporation (CDIC), so your security deposit is safe even if the company fails.
• Cardholders have the option of adding one authorized user to their account.

• Home Trust will check your credit report for this card, however the approval rate is quite high.
• Every time you withdraw funds from an ATM, you'll be charged a small percentage fee. Different fees apply for withdrawals in Canada, the US and other countries.
• This card is not available in Quebec. You also don't qualify if you're currently in bankruptcy, however, you can qualify once you're discharged.

Annual fee	$0
Purchase APR	14.9% fixed
Balance transfer APR	N/A
Recommended minimum credit score	300

Best for rewards with no credit check
Plastk Secured Visa Card

Credit recommended (N/A-)Read review

N/A
Min. credit score

$48
Annual fee

0% intro
Purchase APR

From $300
Min. deposit

• Info
• Pros & cons
• Details

Unlike most secured credit cards in Canada, Plastk Secured Visa Card lets you earn rewards on your purchases everywhere Visa is accepted. From gift cards and merchandise to travel perks and statement credit, turn your spending into opportunities to get something back. Plus, enjoy a lower-than-average interest rate and a special bonus offer when you sign up.

• Earn rewards points of your purchases, and redeem points for gift cards, merchandise, travel perks and cash back that can be used as statement credit. You can even donate points to charity.
• Signup offer for new cardholders: Enjoy a 0% promotional APR for 3 months plus 5,000 bonus points.
• The Plastk Secured Visa Card comes with a competitive interest rate of 17.99% on everyday purchase.

• This card comes with an annual fee of $48.
• Cardholders have to pay a monthly maintenance fee of $6.
• The minimum security deposit is $300.

Annual fee	$48
Purchase APR	0% intro for the first 3 months (then from 17.99% fixed)
Balance transfer APR	N/A
Recommended minimum credit score	N/A

Disclaimer

Please note: All information about Plastk Secured Visa Card has been collected independently by Finder and this product is not available through this site.

Best for benefits with no credit check
Capital One Guaranteed Secured Mastercard

Credit recommended (N/A-)Read review

N/A
Min. credit score

$59
Annual fee

19.8% fixed
Purchase APR

From $75
Min. deposit

• Info
• Pros & cons
• Details

The Capital One Guaranteed Secured Mastercard is a guaranteed-acceptance card, as long as you meet some basic qualification requirements. You'll have to submit at least the minimum security deposit of $75, which becomes your available card balance. This card comes with a number of travel benefits like common carrier travel accident insurance, car rental collision/loss damage waiver, baggage delay coverage and travel assistance. Purchases made on your card will also be covered with a price protection service, purchase assurance and extended warranty coverage.

• Enjoy an interest rate of 19.8% on your everyday purchases.
• This card comes with a number of travel benefits including common carrier travel accident insurance, car rental collision/loss damage waiver, baggage delay coverage and travel assistance.
• Purchases on your card are covered with a price protection service, purchase assurance and extended warranty coverage.
• You'll be approved for this card if you meet basic criteria such as being the age of majority in your province or territory, being in good standing with Capital One, not having an existing Capital One credit card and being able to submit a minimum security deposit.
• You can use this card with a deposit as small as $75.
• Enjoy protection from unauthorized use of your card with Mastercard Zero Liability protection.

• This card comes with an annual fee of $59.
• Because this is a secured credit card, the amount you can spend is limited to what you can load onto the card up to a maximum of $2,500.
• The Capital One Guaranteed Secured Mastercard doesn't offer rewards points or cash back on your purchases.

Annual fee	$59
Purchase APR	19.8% fixed
Balance transfer APR	N/A
Recommended minimum credit score	N/A

Disclaimer

Please note: All information about Capital One Guaranteed Secured Mastercard has been collected independently by Finder and this product is not available through this site.

• How we chose the best secured credit cards

  We’ve chosen the cards on this page based on the current range of secured credit cards available on the market and through Finder. We’ve narrowed down our top picks by considering annual fees, interest rates, introductory offers, travel perks and additional card benefits.

  No single credit card will be the best choice for everyone, so compare your options before picking your new card.

What is a secured credit card?

A secured credit card is designed to give people with no credit history, or a bad credit score, access to a credit card in order to build up their credit rating. A secured credit card is much easier to qualify for than a typical unsecured card because lenders are less concerned about your credit score when determining your eligibility. Instead, you provide a security deposit on the card, which serves as “collateral” for the card. Lenders can collect that security deposit if you default on your payments, making them much more willing to approve you for a credit card, even if you have a bad credit score.

Other than the security deposit, a secured credit card works exactly like an unsecured card: You build your credit score by making purchases on the card and paying your balance on time each month.

The money you deposit as collateral — usually between $200 and $10,000 — often becomes your monthly credit limit. After a few months of on-time payments, you may be eligible to increase your limit. Your deposit will be returned to you once you pay off your balance and cancel your card. Keep in mind that unlike unsecured cards, secured cards rarely offer additional perks such as cash back, rewards points or travel insurance.

How does a secured credit card help build my credit?

Most secured cards report your activity to the two major credit bureaus in Canada: Equifax and TransUnion. Many secured cards also offer monthly credit score checks so you can track your progress. Providers occasionally offer educational tools as well to help you get back on track.

Using your card regularly and responsibly can help your credit score increase. Providers tend to see a credit score of 650 as the “magic number”, which, once you’ve reached or surpassed this number, may open you up to the world of unsecured credit cards. Some secured card providers offer an opportunity to graduate to an unsecured version of the card – provided you show financial responsibility over a certain period of time.

What other factors go into a credit score?

Can I get a secured credit card with no credit check?

Yes, many secured credit cards don’t require credit checks for approval. And no credit check secured credit cards work like all other secured cards – the deposit you put down on the card becomes your credit limit. Your provider can use that deposit to pay off your balance if you default on your payments. Otherwise, you’ll get it back when you close out your card and make your last payment.

Secured credit cards with no credit check are ideal to build up your credit score, as you won’t need to have good credit score to qualify. Unfortunately, you have to pay interest on most secured credit cards with no credit checks and they usually don’t come with benefits or rewards.

Compare secured credit cards with no credit check

Who should consider getting a secured credit card?

Secured credit cards can be ideal for the following people:

• Those looking to rebuild a poor credit score.
• Those with a credit score under 620 who have been rejected for other credit cards.
• Those with no prior credit history whatsoever.
• Students or young adults who are ineligible for a student credit card.
• New immigrants who are ineligible for an unsecured card.
• Those who have filed for bankruptcy.
• Those who misused credit cards in the past and have a history of missed payments.

Even if you fall into one of these categories, it’s still possible to be denied for a secured credit card.

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 approval requirements. These cards are designed for individuals with a poor credit score or little to no credit history. Find out more about how your credit score impacts your credit card eligibility in our full guide here.
• Good for building credit. Use your card responsibly, avoid making late payments, and it will help build your credit. Once you’re back on track, you can easily apply for a unsecured card that offers greater benefits and rewards.
• Rewards. Earn cash back on your purchases with some secured cards, although the rewards rate will be lower compared to a unsecured rewards credit card.
• Control over your credit limit. Your deposit acts as your credit line. Although limited by the card issuer, you essentially control the size of your credit line via your deposit. This can help you manage your spending and payments responsibly.
• Potential to upgrade. You’re not stuck using a secured credit card forever and you can do more with it than simply build your credit. You could get upgraded to an unsecured card if your provider approves of your card usage and activity. This opens the door to greater rewards, perks, and benefits.

Cons

• Upfront costs. Secured cards require a deposit to be issued a credit limit, usually between $200 – $500, but this deposit is usually refundable if you close your account.
• Annual fee. While some cards offer a $0 annual fee, others charge an annual fee of $12.95 or higher.
• Foreign transaction fee. Expect to pay foreign transaction fees of up to 3% for each transaction made abroad or online with foreign merchants. Secured cards aren’t generally designed for international travel.
• No intro APR period. It isn’t common to find a secured card that offers an intro APR period on purchases, balance transfers or both.
• No signup bonus. Generally, secured cards do not offer a signup bonus of any kind.

How to choose a secured credit card

Choosing the right secured credit card is important for making sure you end up with a card that will help you rebuild your credit score. Once you’ve reviewed your options, follow these simple steps to apply for a secured card.

• Minimum security deposit. If you don’t have a lot of money to put toward a security deposit, you’ll want a secured credit card that will allow you to pay a low security deposit. You’ll be able to get a secured credit card without having to come up with a lot of money.
• Maximum security deposit. Perhaps you have several thousand dollars and want a secured credit card with a large credit limit. In this case, look for a secured credit card that requires a high security deposit. Some providers limit the security deposit to $5,000, but there are a few that allow security deposits as high as $10,000.
• Annual fee. Annual fees are fairly common with secured credit cards. When you compare secured credit cards, look for one with a low or no annual fee.
• Interest rate. Many secured cards have interest rates of 19.99% and higher, with many imposing a penalty APR for late or declined payments. Avoid paying APRs by spending only what you can afford and paying your balance in full each month by the due date. If there’s a chance that you’ll carry a balance rather than pay in full each month, choose a secured credit card with a low interest rate.
• Reporting to the major credit bureaus. The goal of having a secured credit card is to build a new credit history or rebuild a bad credit history. However your goal may be to prove that you can manage money on a low income. Having a card that reports your account details to Equifax and TransUnion is a must. This way, your payment history will be included in your credit report and will help improve your credit score and ultimately your chances of being approved for a different credit card in the future.
• Transaction fees. Transaction fees refer to things like balance transfers, cash advances, foreign transactions and late fees. If you plan on using these features, consider how the fee will affect you.
• Upfront fees. The best secured credit cards do not charge any upfront fees. You’ll only have to pay your security deposit to receive your credit card. Tread carefully with any credit card that asks you to pay additional fees to get the card.
• Authorized users. If you plan on letting a family member or significant other use your card, check with the lender to make sure this is allowed. Some lenders allow you to apply for an extra secured card at no additional cost, but others will charge a flat fee or require you to provide a higher security deposit.
• The credit card provider. Picking a secured credit card from a major credit card provider is often a safe choice. Choose a secured credit card from a well-known, reputable credit card provider to avoid falling for a scam.

What you’ll need to apply for a secured credit card in Canada

While it can vary between providers, you’ll typically need to provide the following information when you apply for a secured credit card:

• Personal information. Full name, phone number, date of birth and Social Insurance Number (SIN).
• Housing information. Address, type of residence, rented/owned, how long you’ve lived at your home and your monthly mortgage/rent payments.
• Financial information. Banking information including assets and liabilities.
• Income information. Employers name, your job position, length of employment and annual income.

Eligibility requirements for secured credit cards

The exact requirements to qualify for a secured credit card will vary depending on the type of card and the specific lender you choose to go with. That being said, most providers require you to meet these basic eligibility criteria:

• Be 18 years old or the age of majority in your province or territory.
• Have a working bank account (this is sometimes not a requirement – it varies between providers).
• Have enough money to provide a deposit to secure your credit limit (usually between $200 and $10,000).

How to apply for a secured credit card in Canada

You can follow these 5 steps to apply for a secured credit card:

1. Compare secured cards.Compare a number of secured credit cards with no credit check to find the best one for your personal situation.
2. Apply for the card of your choice. Apply for the credit card of your choice by visiting the main site of the provider you’re interested in. You can navigate to the application page by clicking the “Apply now” button in the table below.
3. Fill out application details. Provide personal information such as your full name, address, email and phone number to start your application.
4. Review final details. Read the fine print of your contract so that you understand the terms and conditions of your no credit check credit card.
5. Click submit. Click submit on your application or call your credit card provider directly to apply over the phone.

When can I ask for an upgrade to an unsecured card?

Secured credit cards are often used with the goal of graduating to an unsecured card as soon as you’ve improved your credit score enough.

Some secured card providers will offer you the chance to upgrade to an unsecured card once you’ve increased your credit score and proved that you’re a responsible and trustworthy borrower. If you’re provider doesn’t offer an unsecured card, consider applying for one with a different provider once your credit score is in the good range: about 650 or higher.

Once you decide to close your secured credit card account, you’ll need to pay off your balance in full before you receive your deposit back.

Why do I need a deposit for a secured credit card?

A secured credit card’s deposit is similar to the deposit you put down when renting an apartment. Just as a rental deposit protects a landlord if a renter doesn’t pay, the deposit on your secured credit card protects the provider should you find yourself unable to make payments.

The amount you provide as a deposit will usually serve as your monthly credit limit. So if you provide the lender with $300, your monthly credit limit will likely be $300.

7 tips to help you save for your secured credit card deposit

Before receiving your secured credit card, you’ll need to save up some cash to put down as your deposit. Your plan to get a secured credit card must involve a saving strategy that begins with knowing your fixed expenses. Developing new spending habits can yield a lot of savings, but a little assertiveness won’t hurt either.

1. Download a free budgeting app

To avoid late payments, set up payment alerts and autopay for your bills. A free budgeting app such as Mint can be particularly helpful. Use it to set financial goals, track your spending, view your credit score, keep tabs on your investments and balances, pay bills and receive alerts.

2. Download a free mobile banking app

A free mobile banking app can also help you set aside money. For instance, the Nomi Find & Save by RBC works by moving money from your chequing or savings account to a separate account when you receive your pay or other regular income.

3. Look into low-income assistance

Many communities offer low-income assistance programs for gas, electricity and other utilities. Also, if you initially put down a deposit for your utility accounts, ask if you can have it refunded after about a year of timely payments. Some utility providers automatically refund deposits after you’ve established a reliable track record of payments.

4. Get programmable thermostats and energy-saving appliances

Reducing your overall expenses is key to taking control of your personal finances. Even seemingly small steps like installing a programmable thermostat to lower home heating costs, changing your lightbulbs to LEDs or seeking out Energy Star–labelled appliances matter to your long-term financial success. Some services even offer rebates that partially cover the cost of a programmable thermostat.

5. Reexamine your phone bill

Examine your cell phone and landline service plans, and talk to your providers about ways to bring down the costs. To get a clearer sense about whether your cell phone plan is right for you, install a free app to track your data use. If you’re not close to hitting your limits, consider a cheaper no-frills plan. Using a prepaid carrier or joining a friend or family member’s plan can also reduce your monthly smartphone tab.

6. Ditch cable

Join the growing number of cord cutters by exploring whether Netflix, Amazon Prime Video, hayu or Crave can replace your cable bill. If you aren’t ready to ditch cable, call your provider to negotiate a cheaper deal.

7. Look into your transportation options

If you live far from work, consider asking your employer if working from home — either one day a week or several — is possible.

For good measure, evaluate public transportation, particularly if you live in or near an urban centre where trains, buses, carpooling and carshare services are available. For those who don’t need a car daily, taxis, rideshare services — like Uber and Lyft — or simply renting a car or using a carshare here and there can save money.

If you do drive, apps like GasBuddy and Gas Guru can steer you to the best gas deals along your route. Also, check if your auto insurance provider offers multiline policies: Bundling your auto and home or rental insurance into a multiline policy can typically shave 10% to 15% off your overall bill.

Alternatives to getting a secured credit card

Secured credit cards should always be the secondary option to unsecured credit cards when it comes to building and utilizing credit, because unsecured cards come with more perks and don’t require a security deposit. As such, secured cards should be one of your first fallback choices if you’re denied an unsecured credit card.

You could also consider these other financing alternatives instead of getting a secured credit card:

• Personal loans offer money quickly, but often charge hundreds of dollars in interest over the course of your loan. Alternatively, secured cards give you quick access to cash and the opportunity to avoid interest altogether by paying your balance in full each month.
• Prepaid cards are another option that require a deposit. The main difference between a prepaid card and a secured credit card is that prepaid cards can’t help build up your credit rating because your payment history is not reported to the either Canadian credit bureau. You can think of a prepaid card more like a gift card.

Bottom line

Secured credit cards are designed for individuals with a poor credit score, limited to no credit history and who have difficulty qualifying for an unsecured credit card. These cards are structured to operate on a security deposit with a smaller credit limit to encourage responsible use and help you build your credit.

Depending on the card, you may not have to pay an annual fee and you could be offered limited cash back rewards. But most secured cards do not offer rewards, signup bonuses, and could come with a annual fee. If you’re not sure this kind of card is right for you, compare other credit builder cards here.

Frequently asked questions

• Can I apply for a secured card if I'm new to Canada?

  Yes. Once you’ve established yourself here in Canada with a job and a home, there are secured credit cards available that are suited toward newcomers to Canada. You may also find unsecured credit cards offered by the big banks that are catered toward immigrants. Find out what you need to know about applying for a credit card as an immigrant in our guide.

• Can a secured credit card be denied?

  Although it’s very rare, it is possible to for your secured credit card application to be denied. While there are many reasons why your application could have been denied, here are a few of the most common causes:

  • Poor credit score. Some secured credit card issuers require a minimum credit score to verify your ability to pay your bills. If you’re worried about that requirement, consider applying for a no credit check secured credit card, like the Refresh Financial Secured Card.
  • Outstanding loans. Outstanding loans may be a sign that you are unable to pay off debts, which can be a red flag to some issuers.
  • A history of inadequate income, missed payments or bankruptcy. Issuers want to make sure you’re able to pay your bill. If you have inadequate income or you have a bankruptcy on your history, they may doubt that ability.
  • Spotty employment history. Just like inadequate income, a spotty employment history may be seen as a sign that you’re unable to pay your bill.
  • Error on your application. This could be as minor as a spelling error or a wrong phone number. Always check to make sure all of your information is correct before submitting your application.
  • Error on your credit report. Your application may also be rejected due to errors on your credit report, which can be resolved by contacting the relevant credit bureau.
  • Security deposit. Sometimes, the reason for a denied application may prove as simple as failure to pay the security deposit.
  • Too many applications or inquiries. Too many credit card applications or inquiries in a short period can decrease your credit score or indicate that you are relying too heavily on credit.
  • You don’t meet the minimum qualification requirements. Even guaranteed approval credit cards will have basic requirements that you’ll need to meet to get the card, like being a Canadian citizen or permanent resident. You’ll need to at least meet the basic criteria to get approved for a secured credit card.

  Instead of getting a secured card, consider getting a prepaid card instead. Prepaid cards work similarly to gift cards where you load the card with money upfront. They provide a flexible and secure plastic payment method for a low cost. You can use the card for purchases at any retailer, service provider or even online. These cards, however, won’t impact your credit score whatsoever.

• What should I do if I get rejected for a secured credit card?

  While uncommon, if you get denied for a secured credit card, there are a number of steps you can take to improve your chances. You should firstly start by finding out why you were rejected by reading the details on your rejection letter or calling the card provider directly.

  If it’s a simple fix, like correcting an error on your application, you may be able to reapply immediately. Otherwise, you might have to take some steps towards meeting the eligibility requirements and improving your credit, including:

  • Pay your bills on time. This includes secured credit cards, utility bills, phone bills, mortgage payments and any other bills.
  • Take your time between credit card applications. Applying for too many cards at once can damage your credit score. If your application gets rejected, take a moment to understand why, then spend some time (many people suggest a minimum 6 months) improving your credit score before applying for other forms of credit.
  • Pay off outstanding debts. Outstanding loans and other debts can decrease your credit score. Paying off outstanding debts or bills can help you gradually build your credit score over time. But avoid closing old credit accounts since lenders and credit card providers like to see a long history of credit in your report.
  • Budget. Creating a monthly budget can help you understand where your money is going and help ensure your bills are paid on time. It can also decrease your debt-to-income ratio and reduce outstanding debts.
  • Avoid closing unused accounts. Having only newer accounts on your credit report can result in a lower score. Lenders and credit card providers like to see a long history of credit in your report.
  • Consolidate your debt.Consolidating several loans into one can streamline your repayments and help you save money on interest charges.

• Do secured credit cards hurt your credit score?

  No. While the initial application may temporarily affect your credit score by a few points because of the hard credit pull performed by the provider, actively using a secured credit card will improve your score (provided you use it responsibly).

• Is a secured credit card better than an unsecured credit card?

  If you have poor credit, then yes. A secured card may be a better card option to build your credit score as you may find it hard to get approval for an unsecured card. Otherwise, unsecured credit cards can be a more rewarding option.

• Are there any guaranteed approval secured credit cards?

  Some issuers do offer guarantee application approval if you meet basic requirements such as being the age of majority in your province and not having a pre-existing account with the issuer that’s in poor standing. Guaranteed approval depends on the issuer. One example of a guaranteed approval secured credit card is the Refresh Financial Secured Card.

• How can I graduate or transition to an unsecured credit card?

  The surest way to graduate to an unsecured credit card involves selecting a reputable secured credit card and using your card responsibly. After a few months or years of good standing, your provider may extend the option to upgrade to an unsecured credit card. Or, you can apply for an unsecured card with a different provider once you’re ready.

• When I make a security deposit, will it earn interest?

  No, most of the time your provider won’t pay interest on your security deposit. You’ll usually receive back the exact amount that you provided.

• Can I pay the minimum security deposit in increments?

  No. Typically, a secured credit card provider requires an upfront deposit before activating your card. Your deposit reduces the risk to the secured credit card provider, which is why they usually require it in one payment and before you start spending on the card.

• Can I increase the credit limit on my card so I can do more with it?

  A secured credit card’s credit limit is often linked to your deposit. Your card provider might allow you to top up your deposit to the maximum, thereby extending your credit limit. Call your credit card provider to learn more about how it handles credit limits.