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Best secured credit cards in 2020

Use your card responsibly to improve your credit score and graduate to an unsecured card.

Updated . What changed?

Fact checked

Our pick for a secured card: OpenSky® Secured Visa® Credit Card

OpenSky® Secured Visa® Credit Card logo

from $200

Security deposit

  • No credit check to apply
  • Low annual fee of $35
  • Reports to all three credit bureaus to help build credit
Apply now

A secured credit card for bad credit is one of the best financial tools you can get to help you build credit. Some secured cards come with perks like reward programs, but all require a security deposit.

Our card experts weigh the features, requirements and perks across secured cards to help you find the best card to rebuild your credit.

Quick look: Best secured credit cards

Best secured card for no credit check
OpenSky® Secured Visa® Credit Card

OpenSky® Secured Visa® Credit Card logo
Finder Rating: 3.8 / 5

★★★★★

Credit recommended (300-669)
Apply now
on Capital Bank N.A.'s secure site
300
Min. credit score
$35
Annual fee
17.39%
variable
Purchase APR
From $200
Min. deposit
You'll pay a $35 annual fee for the OpenSky® Secured Visa® Credit Card. For the price, however, you'll find not only a reputable secured card from a provider that doesn't require a credit check for approval, but a secured card that offers intro APR on purchases.
  • Build your credit. The card reports to all three major credit bureaus, which can help strengthen your credit. All you have to do is keep your utilization low and make timely payments.
  • No credit check. OpenSky only uses your ID to confirm your identity — it won't do a credit pull.
  • Credit line. You have full control over your credit line, as it's the sum of your security deposit. You can make a deposit from $200 up to $3,000.
  • Annual fee. The card comes with a $35 annual fee.
Annual fee $35
Minimum deposit required Starting at $200
Purchase APR 17.39% variable
Balance transfer APR N/A
Recommended minimum credit score 300

Best secured card for low APR
Green Dot primor® Mastercard® Gold Secured Credit Card

Green Dot primor® Mastercard® Gold Secured Credit Card logo
Finder Rating: 4 / 5

★★★★★

Credit recommended (300-579)
Read review
300
Min. credit score
$49
Annual fee
9.99% fixed
Purchase APR
From $200
Min. deposit
While this card has a high $49 annual fee, it offers a 9.99% fixed purchase APR that's much lower than you'll find with other secured cards. Green Dot Bank, the issuer, says you'll be approved after verifying your identity and address and funding a savings account.
  • Build your credit. The card reports to all three major credit bureaus — Equifax, Experian and TransUnion. If you keep your utilization low and pay your balance on time, you'll be on a good track to build your credit.
  • Fixed APR. Most cards come with a variable APR, but with this card, you'll get one of the lowest APRs at 9.99% fixed.
  • No minimum credit score. You can apply without credit history or if you have a poor credit score.
  • Annual fee. You'll pay an annual fee of $49 for the card.
Annual fee $49
Minimum deposit required Starting at $200
Purchase APR 9.99% fixed
Balance transfer APR N/A
Recommended minimum credit score 300

Best secured card for low deposit and no annual fee
Capital One® Secured Mastercard®

Capital One® Secured Mastercard® logo
Finder Rating: 4.4 / 5

★★★★★

Credit recommended (580-669)
Read review
Rates & fees

580
Min. credit score
$0
Annual fee
26.99% variable
Purchase APR
From $49
Min. deposit
The possibility of depositing less than your credit limit is what makes this card unique. You can receive a $200 starting credit limit with an initial deposit of $49, $99 or $200.
  • No annual fee. You'll pay no annual fee to use this card.
  • Low secured deposit. Depending on your credit, you may pay a security deposit as low as $49 and still get a $200 credit limit.
  • Potential credit limit increase. Make your first 5 monthly payments on time and Capital One will raise your credit limit.
  • High interest rates. This card features a high APR of 26.99% variable.
  • No rewards. You won't earn any rewards on your purchases.
Annual fee $0
Minimum deposit required $49, $99 or $200
Purchase APR 26.99% variable
Balance transfer APR 26.99% variable
Recommended minimum credit score 580

Best secured card for signup bonus
Discover it® Secured

Discover it® Secured logo
Finder Rating: 4.4 / 5

★★★★★

Credit recommended (300-669)
Read review
300
Min. credit score
$0
Annual fee
22.99% variable
Purchase APR
From $200
Min. deposit
The Discover it® Secured has long been the best choice in this category. It offers cashback rewards and a solid signup bonus, which is rare among secured cards.
  • Build your credit. Responsible use of the card will help you build your credit score, as the card reports to all three major credit bureaus — Equifax, Experian and TransUnion.
  • Earn cash back. Earn 2% back on dining and gas on up to $1,000 in combined purchases each quarter. On everything else you buy, you'll earn 1% cash back.
  • Intro APR period on balance transfers. Enjoy a 10.99% intro APR period on balance transfers for 6 months. After that, a variable APR of 22.99% applies.
  • Balance transfer limitation. You must make your balance transfers by a rolling deadline to use the intro APR period.
Annual fee $0
Minimum deposit required Starting at $200
Purchase APR 22.99% variable
Balance transfer APR 10.99% intro for the first 6 months (then 22.99% variable)
Recommended minimum credit score 300

Best secured card for military members
nRewards® Secured Credit Card

nRewards® Secured Credit Card logo
Finder Rating: 4.4 / 5

★★★★★

Credit recommended (300-579)
Read review
300
Min. credit score
$0
Annual fee
18% variable
Purchase APR
From $200
Min. deposit
The nRewards® Secured Credit Card offers 1x points on all purchases, and it's light on fees. After six months, Navy Federal Credit Union reviews your account to see if you're eligible for an upgrade to an unsecured card.
  • No annual fee. You won't pay an annual fee to use this card.
  • Few miscellaneous fees. There are no fees for balance transfers, foreign transactions or cash advances.
  • Rewards. You can earn 1 point per dollar spent on eligible purchases.
  • Membership required. You'll need to be a NFCU member to qualify for this card.
Annual fee $0
Minimum deposit required Starting at $200
Purchase APR 18% variable
Balance transfer APR 18% variable
Recommended minimum credit score 300

Best secured card for cash back
Bank of America® Cash Rewards Secured

Bank of America® Cash Rewards Secured logo
Credit recommended (300-669)
Read review
300
Min. credit score
$0
Annual fee
23.99% variable
Purchase APR
From $300
Min. deposit
The Bank of America® Cash Rewards Secured card earns accelerated cash back at grocery stores, wholesale clubs and on one category you choose each quarter. This makes the card one of the most rewarding secured cards you can currently get.
  • No annual fee. The card costs $0 to own.
  • Cash back. Earn 3% cash back on one category you choose, earn 2% back at grocery stores and wholesale clubs on up to $2,500 each quarter. After reaching the cap and on all other purchases, earn 1% cash back.
  • Deposit return. Bank of America will monitor your account. Based on your card activity and credit score, you could get your deposit back, thus turning this card into an unsecured card.
  • Foreign transaction fees. Every purchase made abroad or online with foreign merchants will cost you 3%% of the amount.
Annual fee $0
Minimum deposit required Starting at $300
Purchase APR 23.99% variable
Balance transfer APR 23.99% variable
Recommended minimum credit score 300

Best secured card for high secured deposit
U.S. Bank Secured Visa® Card

U.S. Bank Secured Visa® Card logo
Finder Rating: 3.9 / 5

★★★★★

Credit recommended (300-669)
Read review
Rates & fees

300
Min. credit score
$29
Annual fee
18.99% variable
Purchase APR
From $300
Min. deposit
The U.S. Bank Secured Visa® Card doesn't have bells and whistles, but it lets you make one of the largest secured deposits to act as your credit line.
  • High secured deposit. You can deposit anywhere from $300 to $5,000.
  • Choose your due date. U.S. Bank gives you the option to choose your due date, which gives you better payment flexibility.
  • Deposit return. Bank of America will monitor your account. Based on your card activity and credit score, you could get your deposit back, thus turning this card into an unsecured card.
  • Annual fee. Expect to pay $29 each year to own the card.
Annual fee $29
Minimum deposit required Starting at $300
Purchase APR 18.99% variable
Balance transfer APR 18.99% variable
Recommended minimum credit score 300

Best for balance transfers
UNITY Visa® Secured Credit Card

UNITY Visa® Secured Credit Card logo
Finder Rating: 4.1 / 5

★★★★★

Credit recommended (300-669)
Read review
300
Min. credit score
$39
Annual fee
17.99% fixed
Purchase APR
From $250
Min. deposit
The UNITY Visa® Secured Credit Card is one of the rare secured cards that lets you make balance transfers with low APR for a short period of time.
  • Intro APR period on balance transfers. You get 6 months months of 9.95% intro APR period on balance transfers from the day you open your account. After that, a fixed APR of 17.99% applies.
  • Low ongoing APR. Most secured cards have an APR on purchases of above 20% variable. This card has a 17.99% fixed APR.
  • Annual fee. You'll pay $39 annual fee each year.
Annual fee $39
Minimum deposit required Starting at $250
Purchase APR 17.99% fixed
Balance transfer APR 9.95% intro for the first 6 months (then 17.99% fixed)
Recommended minimum credit score 300

How we selected our top cards

We evaluated secured credit cards on several dimensions, including credit check, low deposit, rewards and more. The cards we selected for this list showed standout features compared to competitors.

What’s changed in 2020

We added three new credit cards this year:

  • Bank of America® Cash Rewards Secured
  • U.S. Bank Secured Visa® Card
  • UNITY Visa® Secured Credit Card

  • Why trust us? Finder's credit card experts spend close to 400 hours a week researching and writing about credit card strategies and comparisons. Thanks to this experience, we know what makes the right type of credit card for the right type of consumer. Above all, we want to help our readers quickly and easily compare their options so that they can find the card that suits them best. Under our editorial guidelines, our content is always unbiased and as accurate and current as possible.

Summary of best secured credit cards to rebuild credit

Card nameBest for...Finder ratingAnnual feeMinimum deposit required
OpenSky® Secured Visa® Credit CardBest secured card for no credit check
★★★★★
$35$200
Green Dot primor® Mastercard® Gold Secured Credit CardBest secured card for low APR
★★★★★
$49$200
Capital One® Secured Mastercard®Best secured card for low deposit and no annual fee
★★★★★
$0$49
Discover it® SecuredBest secured card for signup bonus
★★★★★
$0$200
nRewards® Secured Credit CardBest secured card for military members
★★★★★
$0$200
Bank of America® Cash Rewards SecuredBest secured card for cash back
Not yet rated
$0$300
U.S. Bank Secured Visa® CardBest secured card for high secured deposit
★★★★★
$29$300
UNITY Visa® Secured Credit CardBest for balance transfers
★★★★★
$39$250

Compare secured credit cards to rebuild credit

Use the table below to compare secured credit credits for bad credit. These cards are designed to help you build your credit. Note, you may need to pay the security deposit when you apply for a card. If you don't have enough to fund the deposit, learn how to save up for a deposit.

Name Product Filter values Minimum deposit required Purchase APR Annual fee Recommended minimum credit score
OpenSky® Secured Visa® Credit Card
Starting at $200
17.39% variable
$35
300
Apply for this card with no credit check if you're new to credit or have bad credit.
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.
Assent Platinum 0% Intro Rate Mastercard® Secured Credit Card
Starting at $200
0% intro for the first 6 months (then 12.99% variable)
$49
300
A rare secured card with a 0% intro APR on purchases for 6 months, followed by 12.99% variable.
Self Visa® Credit Card
Starting at $100
21.74% variable
$25
300
Build your credit with a low minimum security deposit of $100 and no credit score required.
First Progress Platinum Select MasterCard® Secured Credit Card
Starting at $200
13.99% variable
$39
300
No minimum credit score and no credit history required.
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Compare up to 4 providers

Which banks offer secured credit cards?

BanksDo they offer a secured card?Available secured cards
AmexNN/A
Bank of AmericaYBankAmericard® Secured Credit Card
BarclaycardNN/A
Capital OneYCapital One® Secured Mastercard®
ChaseNN/A
CitiYCiti® Secured Mastercard®
HSBCNN/A
DiscoverYDiscover it® Secured
U.S. bankYU.S. Bank Secured Visa® Card
Wells FargoYWells Fargo Business Secured Credit Card

What type of card do you need?

How do secured credit cards work?

A secured credit card is designed to help you build your credit score and works similarly to a traditional credit card. The main difference is you need to put down a security deposit before you can open a secured card.

This deposit helps protect the issuer in the event you fall behind on your payments or default. Because of this, the bank extends you credit when you otherwise wouldn't qualify for a credit card. This gives you the opportunity to build your credit by showing you can responsibly manage a credit card. To learn how secured credit cards work, read up on our guide.

1. Compare & apply for a card

Avoid predatory cards with high fees or rates. Once you choose a card, you may have to provide your bank credentials during the application to pay the deposit.

2. Raise your credit score

Now that you have a card, use it to raise your credit score by paying your full balance on time each month.

3. Graduate to an unsecured card

Once you raise your credit score, you're ready for a new card. Contact the bank to see if you can upgrade your card and get your deposit refunded.

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How to choose the best secured credit cards

On top of a secured card's APR, you'll want to look at the following card features before making your choice:

Security deposit

The required security deposit depends on the card and can range from $200 to $5,000.

Credit reporting

You'll want to make sure the secured card reports to all three major credit bureaus.

Fees

Watch out for secured cards with annual or monthly fees. These can make it difficult to keep up on your payments.

Graduation

Some secured cards will let you graduate to an unsecured version or will upgrade your credit limit after you demonstrate strong financial habits.

Credit check

If you're worried you won't qualify for a secured card because of your credit, look for one that doesn't check your credit score for qualification.

Rewards

While rare, some secured cards can let you earn rewards while you build your credit.

What's the difference between a secured card and unsecured card for bad credit?

You have two credit card options for rebuilding credit: secured cards and unsecured cards. Both come with certain benefits and drawbacks, which will eventually determine the type of card that meets your financial goals.

Secured cardsUnsecured cards for bad credit
Credit limitRequires a secured deposit with a minimum of $200 or $300 to act as a credit limitUnsecured credit limit starting from $200 or $300
Annual feeNo annual fee or an annual fee of up to $49High annual fee of between $70 and $300
RewardsSome cards offer cashback rewardsSome cards offer cashback rewards
Interest ratesFrom 9.99% to 25% either fixed or variableFrom 17.99% to 29.99% either fixed or variable
Intro APR periodLow intro APR period on balance transfers with some cardsNo intro APR period on balance transfers

Pros and cons of secured 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.

When is a secured credit card worth it?

Getting a secured card is an investment in your credit future, but whether or not it's worth it depends on a couple of factors.

  • Can you afford the secured deposit? On average, most secured cards require a security deposit of around $200. You need to determine if you can part with that cash upfront because you won't see it again until you close your account.
  • Do you want to build your credit? Using a secured card can help raise your credit score and teach you effective spending habits. That's why a secured credit card is often worth it.
  • Do you want a better card in the future? Secured cards are one of the best starter cards to help you build credit. Once you've established your credit history, you can apply for way better cards down the line and earn generous rewards on your purchases.

Alternatives to secured credit cards

Although secured credit cards are one of the best financial tools you can find, there are three similar options you can choose from:

  • Unsecured cards for bad credit. This type of card is the most similar to secured cards because they both help you build credit. Aside from that, unsecured cards for bad credit could be more expensive in the long run. But if you can't make a $200 or $300 deposit for a secured card right away, unsecured cards are the next alternative.
  • Prepaid cards. Prepaid cards are another alternative to secured cards if you don't want to carry cash around. However, you can't build your credit with prepaid cards.
  • Debit cards. Similar to prepaid cards, debit cards are used as a substitute for cash, to pay for online purchases or make travel reservations. But just as prepaid cards, debit cards don't report your activity to credit bureaus. This makes them useless for credit-building purposes.

You asked, we listened: Top 5 common questions

Secured credit cards function similarly to standard cards, but with some important distinctions. Here are the five most common questions we receive on the subject.

  1. Do secured credit cards really help you build credit? With responsible use, yes. They're designed to limit your total credit card spending while you work on improving your credit score. They also typically report to all three credit bureaus.
  2. How much will I need to deposit for a secured card? The deposit amount depends on the specific credit card as well as your existing credit score. Typically, the lowest amount you can deposit is either $200 or $300.
  3. Why do I need to place a security deposit? Your security deposit serves as collateral for the card issuer in the event that you fall behind or default on your account.
  4. Can you get denied for a secured card? Yes. Depending on your financial and credit history, an issuer can deny you a secured credit card. Read our guide on what to do if your application is denied.
  5. How many secured cards should I have? If you can manage and use them responsibly, having more than one secured card can increase your total limit and improve your utilization ratio.

Read more about secured credit cards

Kevin Chen

Kevin Chen
Credit Cards Writer

My sister once asked me for a credit card recommendation, but her credit score wasn't that great. I advised her to apply for a secured card. She did, and was approved. In several months, her provider -- Bank of America -- upgraded her to an unsecured card. If you need help building your credit, a secured card is a great idea -- and you'll find many excellent products. Here are a few articles to help you find the right one.

Ask the experts

Andrei Simonov profile picture
  • Andrei Simonov
  • Chairperson of the Department of Finance
  • Michigan State University
Travis Davidson profile picture
  • Travis Davidson
  • Associate Professor of Finance
  • Ohio University
Daniel Folkinshteyn profile picture
  • Daniel Folkinshteyn
  • Associate Professor
  • Rowan University
Neel Das
  • Neel Das
  • Associate Professor
  • Appalachian State University
Al Kamienski
  • Al Kamienski
  • PhD Professor of Finance
  • North Park University
Julio Sevilla
  • Julio Sevilla
  • Assistant Professor in the Terry College of Business
  • University of Georgia

Secured credit card statistics

How many Americans use secured cards, why they use them and more.

Finding access to credit is a big part of life in America. When applying for a loan or even renting an apartment, you’re often asked about your credit score. But if you don’t have any credit history, or you need to rebuild your credit, you may run into issues getting the things you need. That’s where secured credit cards can be helpful.

As of the end of 2018, there were roughly 4 million open secured credit card accounts, according to a Federal Reserve Bank of Philadelphia discussion paper. And according to that report, the number of secured credit cards has been steadily rising since September 2012.

Who has a secured credit card?

Secured cards are designed to help those with bad or no credit scores gain access to credit, which is why in 2018, 44.7% of secured credit cards were opened by someone with no credit history, according to the Federal Reserve Bank of Philadelphia. Following those with bad or no credit are cardholders with poor credit (28.7%). This means that almost three-quarters (73.4%) of the secured credit market in 2018 was made up of those with either a sub-579 FICO score or no credit score at all.

This trend has held true since at least 2016, with those lacking credit or with bad credit making up at least 73% of those with a secured card. The only major change: People with poor credit used secured cards at a rate that was 2.8 percentage points higher in 2018 than in 2016, while people with no credit saw a 2.6 percentage point decrease.

Average credit score

Average credit score of people opening a secured card

201620172018
Excellent/Good12.4%11.9%11.7%
Fair14.4%15.0%14.9%
Poor25.9%28.1%28.7%
No credit score47.3%45.0%44.7%

Source: Moving into the Mainstream, Federal Reserve Bank of Philadelphia. Averages based on a 1.5% random sample of 95% of open secured accounts in the Y-14M monthly reports as of November 2018.

Secured cards are especially common among younger cardholders since credit is something you build over time. Secured cards represent 7% of all mass-market cards issued to people under the age of 35, according to the 2017 Consumer Credit Card Market from the Consumer Financial Protection Bureau (CFPB).

What limit can you expect with your secured card?

Credit limits on secured cards are much lower than traditional credit cards. 75% of people opening a secured card account are given a limit of $200, $300, or $500. Often holding onto your card and making on-time payments can result in an increased credit limit, but this depends on your credit score.

For example, if you didn’t have a credit score when you opened your secured credit card, your limit might have grown by an average of $70 over two years, whereas if you’d had a poor score, you would have seen your limit increase an average of $150, according to the CFPB’s 2017 Consumer Credit Card Market report.

How do credit limits compare between secure and unsecured credit cards?

The average credit limit of a cardholder with an unsecured card — meaning total access to credit, and not just on a single card — is $24,032. Whereas the average limit for cardholders with a secured credit card is just $1,379.

Average credit limit

Average credit limit on existing accounts

Average credit limit on existing accounts
Secured cardholder$1,379
Unsecured cardholder$24,032

Source: The Secured Credit Card Market, Federal Reserve Bank of Philadelphia. Averages based on secured accounts in the Y-14M monthly reports from June 2012 to December 2015.

How much are people spending with their secured cards?

With the majority of credit limits under $500, secured card balances are far lower than unsecured credit cards. The average balance of a secured card three months after opening is around $200, according to the CFPB. That balance tends to increase over the lifespan of the card, increasing to $350 two years after opening — roughly 75% higher.

Average balance

Average balance for secured cards over time

Months since account openingAverage balance per account
3$197.39
6$225.18
9$285.04
12$321.38
15$342.76
18$327.79
21$340.62
24$355.58

Source: The Consumer Credit Card Market 2017, Consumer Financial Protection Bureau. Averages based on secured accounts in the Y-14M monthly reports from June 2012 to November 2017.

Those with secured cards actually use less of their available credit than people with unsecured cards, according to a 2016 discussion paper The Secured Credit Card Market from the Federal Reserve Bank of Philadelphia. The average utilization of existing credit for someone with a secured card is just 14.5% versus 31.4% for those with an unsecured card.

Average balance

Average utilization of existing credit

Average utilization of existing credit
Secured cardholder14.5%
Unsecured cardholder31.4%

Source: The Secured Credit Card Market, Federal Reserve Bank of Philadelphia. Averages based on secured accounts in the Y-14M monthly reports from June 2012 to December 2015.

Can you get a secured card with a low APR?

Unfortunately, the majority (95%) of secured cards come with APRs of between 15% and 25%, according to a 2016 report from the Federal Reserve Bank of Philadelphia.

How do unsecured and secured cards compare on purchase APR?

While unsecured and secured cards can come with similar APRs, you can find lower purchase APRs among unsecured card options. You may even find yourself an unsecured card with an APR in the single digits.

Average purchase

Most common purchase APR accross cards

Purchase APR% of secured cards% of unsecured cards
0%2.4%3.9%
0.1% - 10%0.0%5.1%
10.1% - 15%1.4%24.7%
15.1% - 20%31.6%22.1%
20.1% - 25%64.3%29.8%
>25%0.2%14.4%

Source: The Secured Credit Card Market, Federal Reserve Bank of Philadelphia. Averages based on secured accounts in the Y-14M monthly reports from June 2012 to December 2015.

Do secured credit cards have annual fees?

It’s difficult to find a secured card without an annual fee. According to the Federal Reserve Bank of Philadelphia discussion paper, 83% of secured cards come with an annual fee and another 2% come with monthly fees.

Cards with annual fees cost on average $29.60 for the use of their card, and those with monthly fees cost about $3 a month.

Types of fees for secured cards

Types of fees for secured cards

Fee type% of secured cards
Annual83%
Monthly2%
None12%
Not reported3%

Source: The Secured Credit Card Market, Federal Reserve Bank of Philadelphia. Percentages based on secured accounts in the Y-14M monthly reports from June 2012 to December 2015.

How can a secured card help you build your credit?

After opening an account, it takes the median consumer about six months to establish credit. According to the Federal Reserve Bank of Philadelphia, 25% of those who took out a secured card without credit history were able to graduate to an unsecured card with an initial credit score of 728 or higher — or an excellent credit score.

Cardholders trying to rebuild a spotty credit score were able to add an average of 24 points to their score over a two-year period. It’s not all sunshine and rainbows, however, as those who closed their secured card or were moved to “charged-off” status after nonpayment saw a credit score drop of 40 points on average.

Changes in median credit scores

Changes in median credit scores over time

Account groupingMedian credit score at openingMedian credit score after two yearsChange in score
Open589613+24
Closed with a balance569527-42
Closed without a balance568522-46
Charged off574514-60

Source: The Secured Credit Card Market, Federal Reserve Bank of Philadelphia. Based on secured accounts in the Y-14M monthly reports from June 2012 to December 2015.

How long do people typically have a secured card?

About half of those with no credit history and a third of people with credit at the time of opening a secured account were able to open an unsecured card within two years, according to the 2019 discussion paper Moving Into the Mainstream, from the Federal Reserve Bank of Philadelphia.

Secured cards that graduate to an unsecured card

% of secured cards that graduate to an unsecured card within 2 years

Credit score at account opening% of secured cards that graduate within 2 years
No credit score31.4%
Excellent/Good (620+)27.6%
Fair (580-619)19.4%
Poor (550-579)13.7%
Very Poor (300-549)10.0%

Source: Moving Into the Mainstream, Federal Reserve Bank of Philadelphia. Graduation rates based on secured accounts that were opened in 2016 and graduated within 2 years according to the Y-14M monthly reports from Jan 2016 to December 2018.

Bottom line

Secured cards are a useful tool for building or rebuilding your credit score and moving on to an unsecured card. Your main goal is to spend responsibly, pay your balance on time and graduate to more beneficial credit cards as soon as possible

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Credit card ratings

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Our team evaluates credit cards to determine their value against similar cards on the market.

We rank card types — travel, cash back, business — on a set of factors that are most relevant to that type of card. We create these rankings to help you narrow down a credit card that best suits your spending and budget.

Learn the details of our methodology and scoring.

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