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.You can use your secured card responsibly and pay your balance in full each month to start improving your credit score and graduate to an unsecured credit card

Compare secured credit cards

Sort by:

Name	Product	Min. Required Deposit	Purchase Interest Rate	Cash Advance Rate	Annual Fee		Reward
Refresh Financial Secured Card		$200	17.99%	N/A	$12.95	Apply now More Info	The Refresh Secured Card has no credit check, a low annual fee and guaranteed approval once you secure your card with anywhere from $200 - $10,000.	Take advantage of a low annual fee, with no credit check and guaranteed approval once you secure your card with some funds.	Compare	loading Fetching your data...
Home Trust Secured Visa		$500	14.90% - 19.99%	19.80% - 19.99%	$59	Apply now More Info	Improve your credit score and make purchases with the Home Trust Secured Visa. Choose between paying no annual fee or low interest.	Choose from three card options: No Annual Fee ($0 annual fee, 19.99% purchase rate), Low Interest Rate ($59 annual fee, 14.90% purchase rate) or a Low Monthly Fee ($5 monthly fee, 14.90% purchase rate).	Compare	loading Fetching your data...

loading

Compare up to 4 providers

Clear selection

Compare

What type of secured credit card do you need?

No Annual Fee

No Credit Check

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 applying 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. Ideally, you will pay your balance in full each month. This is the best way to build up your credit score and avoid getting into debt. 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.
• 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.
• 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.

Funding your secured credit card

How a secured credit card can help you build credit

Secured credit cards play an important role in helping you build or rebuild your credit. They’re a useful first step on your journey to better credit and they stand to bolster several of the financial areas lenders will look at when considering your credit applications.

By making on-time payments and paying your balance in full, you can improve your credit score over the course of a year or two. Having a secured credit card also helps to improve your credit utilization ratio, as long as you keep your spending to less than 30% of your credit limit.

What other factors go into a credit score?

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 your credit score and how to improve you credit 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.

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.

Our guide to secured credit cards with low deposits

Tips to save money 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.

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.

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 chequings or savings account to a separate account when you receive your pay or other regular income.

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.

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.

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.

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.

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.

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 provide 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.

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 you get turned down for a secured credit card?

  Yes. While uncommon, particularly poor credit or a history of bankruptcy or other financial mishandling can disqualify you from obtaining a secured credit card.

• What do I do if I'm rejected for a secured credit card?

  There are a number of steps you can take after getting turned down for a secured card, including finding out why and boosting your credit score in other ways.

• 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 inquiry 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.

• How is a secured credit card different from your typical unsecured credit card?

  The main difference between a secured credit card and an unsecured credit card is that secured credit cards require a deposit to open the account and receive the card.

• Is approval guaranteed with a secured card?

  Just like any other card you apply for, approval is not always guaranteed. However, 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.

• 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.

• 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.