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What to do if your application for a secured credit card is denied

You have several options to work toward secured card eligibility.

Getting denied for a secured credit card doesn’t feel great, especially if you’ve recently been rejected for an unsecured card. Your application may have been denied for a handful of reasons, so it’s best to first identify why you were denied. Then, you can take action to remedy the situation before your next application. Here’s how you can get back on track toward opening a new secured credit card.

Why your secured credit card application might have been denied

You’re legally entitled to know exactly why your application was rejected. Within seven to 10 days of a rejected application, you should receive an adverse action letter from the issuer, which explains the reasoning behind your denial. This letter is the key to understanding exactly why you were denied, as you can use it to make changes that will increase your chances of approval.

While there are many reasons why your application could have been denied, here are a few of the most common causes:

  • Poor credit score. Credit card issuers often require a minimum credit score to verify your ability to pay your bills.
  • 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.
  • Credit card is not eligible in your state. Every state has different laws and regulations surrounding credit cards, meaning that not all cards are available in every state.

Things you can do if your application was denied

If your secured card application is denied, you have several options available:

  • Apply with a different bank. There are plenty of secured card options available. If you weren’t able to qualify for your first choice, give it a month and then try applying for your second choice – ideally with a different issuer. You can also look for secured cards that don’t check your credit.
  • Improve your credit score. Focus on paying down any existing credit balances before trying again. That means making your payments on time, keeping your utilization ratio at 30% or less and paying off any balances you can. Even a few small improvements to your score can help you qualify for a secured card.
  • Become an authorized user. If you have a loved one with good credit, ask if they’ll let you become an authorized user on one of their cards. The primary cardholder will remain responsible for payments, but your credit score will enjoy the benefits of on-time payments.
  • Look into credit-builder loans. A credit-builder loan serves the same purpose as a secured card and is a great alternative if you can’t find a secured card you want. The major difference is you won’t be able to access your “loan” until you pay off the balance in full.
  • Personal loans. A personal loan can also help you build your credit as you pay it back. However, this option isn’t ideal compared to a secured card. Consider this only if you also need cash for an important purchase.

How long should you wait before reapplying for a secured credit card?

Most credit card issuers suggest waiting about six months to reapply after being denied for a credit card application. Instead of rushing to fill out another application, take your time to build your credit over the next few months. Doing so can increase your chances of getting the best secured credit card possible.

However, there is no definite timeline. The six-month rule is just a suggestion, as the ideal timeframe may vary depending on your current credit score, the required score for the new card you want and a handful of other factors.

Maybe you were denied because you simply applied for the wrong card. Some secured credit cards have easier approval rates than others. You can increase your chances of approval by finding the right secured credit card for your financial situation. Here are a few secured credit cards with easier approval rates.

Applied Bank® Secured Visa® Gold Preferred® Credit Card

Applied Bank® Secured Visa® Gold Preferred® Credit Card logo
Finder Rating: 4 / 5

★★★★★

Credit recommended (300-669)
Apply now
on Applied Bank's secure site
300
Min. credit score
$48
Annual fee
n/a
Rewards
n/a
Welcome offer
  • No credit check
  • Reports to Equifax, Experian and TransUnion
  • 9.99% fixed APR on purchases
  • $48 annual fee
  • 3% foreign transaction fee
  • Requires a secured deposit
Annual Fee $48
Purchase APR 9.99% fixed
Balance transfer APR N/A
Welcome offer N/A
Estimated welcome offer value
Rewards N/A

OpenSky® Secured Visa® Credit Card

OpenSky® Secured Visa® Credit Card logo
Finder Rating: 4 / 5

★★★★★

Credit recommended (300-669)
Apply now
on Capital Bank N.A.'s secure site
300
Min. credit score
$35
Annual fee
n/a
Rewards
n/a
Welcome offer
  • No credit check
  • 17.39% variable APR
  • No rewards
  • $35 annual fee
  • Up to $38 late fee
Annual Fee $35
Purchase APR 17.39% variable
Balance transfer APR N/A
Welcome offer N/A
Estimated welcome offer value
Rewards N/A

Capital One® Secured Mastercard®

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

★★★★★

Credit recommended (580-669)
Read review
580
Min. credit score
$0
Annual fee
n/a
Rewards
n/a
Welcome offer
  • Bad credit is okay
  • No annual fee
  • Mastercard and travel benefits
  • High APR
  • High late fees
  • No unresolved bankruptcy
Annual Fee $0
Purchase APR 26.99% variable
Balance transfer APR 26.99% variable
Welcome offer N/A
Estimated welcome offer value
Rewards N/A

DCU Visa® Platinum Secured Credit Card

DCU Visa® Platinum Secured Credit Card logo
Credit recommended (300-579)
Read review
300
Min. credit score
$0
Annual fee
n/a
Rewards
n/a
Welcome offer
  • Easy approval, soft credit check
  • Low APR: 11.5% variable for purchases, balance transfers and cash advances
  • No annual, balance transfer, cash advance or foreign transaction fees
  • Must join the Digital Federal Credit Union
  • No rewards
Annual Fee $0
Purchase APR 11.5% variable
Balance transfer APR 11.5% variable
Welcome offer N/A
Estimated welcome offer value
Rewards N/A

Other options if you need money now

If you’re in a pinch and need a way to cover expenses, secured credit cards aren’t your only option. Here are two other payment methods you may want to consider:

  • Prepaid Visa and debit cards: Prepaid Visa and debit cards will require payment up front, but they provide a flexible and secure payment method for a low cost. You can use the card for purchases at any retailer, service provider or even online.
  • Loans: If you need money right now, you could consider applying for a personal loan through a bank or credit union. You’ll likely need to provide collateral in the form of assets or equity, but personal loans can provide quick access to funds.

Compare secured credit cards

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
New to credit
A no annual fee secured card for people who are new to credit or have limited credit history.
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.
Surge Secured Mastercard®
Starting at $300
19.99% variable
$69
300
Earn 1% cash back rewards.
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Compare up to 4 providers

Bottom line

Getting denied for a secured credit might sting, but it’s not the end of the world. There are a number of ways you can move forward, and whether that includes improving your credit score or finding a card that works for you, it all starts with your adverse action letter.

Once you’re ready to apply again, explore the secured credit cards out there to find the product that’s right for you.

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