6 Best Secured Credit Cards for Bad Credit (2017)

6 Best Secured Credit Cards for Bad Credit

credit card advice

Adam West
By: Adam West
Posted: October 30, 2017
Opinions expressed here are ours alone, and are not provided, endorsed, or approved by any issuer. Site may be compensated through the issuer affiliate programs.

Although we all hear the horror stories of families racking up five-figure credit card debt, it isn’t always the high-dollar debts or multi-card conundrums that drag us down. For example, Katie had only a single credit card with a $500 limit, but when she fell behind on the payments, late fees and interest charges turned that into $1,200 worth of debt.

By the time Katie paid off her debt, her missed payments had taken a toll on her credit scores, dropping them to around 550 — firmly in the “bad credit” range. Dismayed, it wasn’t until her bank offered her a secured credit card that Katie realized there was a way to rebuild her credit.

Secured by a cash deposit that resides in a protected savings account, secured credit cards can be a lifeline to those who would otherwise be rejected for new credit. No matter what your credit looks like, you can likely find a secured card to start rebuilding.

No Annual Fee | No Credit Check | No Minimum Score

“No Annual Fee” Secured Cards for Bad Credit

Often, one of the worst things about having poor credit is that interest rates tend to skyrocket around you and fees start following you like a clowder of stray cats. This is typically because low credit scores equate to a high credit risk to lenders and credit card issuers, so they offset some of that risk by charging more for, well, just about everything.

Secured credit cards, on the other hand, present significantly less risk than their unsecured counterparts, so creditors can charge less for these products. For many with bad credit, secured credit cards are one of the only ways to obtain low interest rates and reasonable annual fees. In fact, the annual fees on our favorite secured cards are so low they’re non-existent.

  • No annual fee, and all the credit building benefits with responsible card use
  • Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
  • You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
  • Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
  • Easily manage your account 24/7 with online access, by phone or using our mobile app
  • It's a credit card accepted at millions of locations worldwide
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
24.99% (Variable)
$0
Limited, Bad
Discover it® Secured Card - No Annual Fee Review

at Discover Card'ssecure website

SECURED RATING

★★★★★
4.5

OVERALL RATING

3.7/5.0
  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
  • We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
  • New! Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
10.99% for 6 months
23.99% Variable
$0
Please refer to issuer's website

While the deposit is necessary to open your secured credit card account, don’t think that deposit will simply disappear. Your initial deposit — and any additional deposits you make over time — will reside in a protected savings account, accruing modest interest, until one of three scenarios take place.

First, and the most ideal for many, is if your secured card is upgraded to an unsecured credit card by your issuer, and your deposit (and any applicable earned interest) would be returned to you. Many secured cards will automatically review your account after 12 to 18 months, upgrading your card if you’ve shown significant credit improvement.

The second case is if you close your account yourself, at which time the deposit will be returned to you, and that’s that. The third, and least desirable, scenario, is if you stop making credit card payments, and the issuer is forced to close your account. At this point, the issuer will use your deposit to cover your outstanding debt and any applicable fees.

“No Credit Check” Secured Cards for Bad Credit

If you’re living with bad credit, the words “credit check” can be more spine-tingling than having a black cat cross your path — and not just because hard credit inquiries can damage your credit score. No, when you’ve already experienced the nightmare of being rejected for credit due to your scary report, then credit checks can be ghastly.

Another benefit of the lower risk of secured credit cards is that issuers, in addition to charging less for the products, can also loosen their credit restrictions. Indeed, some of our expert picks for secured credit cards have such generous credit requirements that they won’t even check your credit at all — including the card below. Simply fill out an application, make your deposit, and get rebuilding.

OpenSky® Secured Visa® Credit Card Review

at Capital Bank'ssecure website

SECURED RATING

★★★★
4.0

OVERALL RATING

2.9/5.0
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search "OpenSky Card" in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
18.39% (Variable)
$35
No Credit Check

The credit line you’ll have available for your secured card will depend on the amount you deposit, and a larger deposit will mean a higher credit limit. In most cases, your credit limit will be equal to 90% to 100% of your deposit. Although it may be difficult to put down a large deposit at first, many secured cards will allow you to add to your deposit over time.

It’s typically a good idea to put down a fairly significant deposit, as a larger credit limit can not only be more convenient, but it can also improve your credit utilization rate by increasing your available credit. Since credit utilization can be worth up to 30% of your credit score, boosting your limit can be beneficial to rebuilding your score.

“No Minimum Score” Secured Cards for Bad Credit

In the secured credit card world, thankfully, even those cards that do check your credit generally won’t judge you for it. Most secured card issuers will overlook bad credit of all types, including that bankruptcy discharge that creeps behind you like a horror-movie villain. And if you don’t have any credit history yet, they’ll help you build one.

As an extra perk, many secured credit cards will also offer you interest rates that don’t feel like highway robbery. Of course, you should avoid carrying a balance if possible, but if you know you’re likely to, you should choose a card that makes it affordable to do so. Take the top-rated secured cards below; here you have options for APRs as low as 9.99%, depending on the size of the annual fee you’re comfortable paying.

First Progress Platinum Prestige MasterCard® Secured Credit Card Review

at First Progress'ssecure website

SECURED RATING

★★★★
3.9

OVERALL RATING

2.9/5.0
  • Fund your new MasterCard® secured credit card with your tax refund today!
  • Our card reports monthly to all three major bureaus and approval is based upon a fully-refundable security deposit.
  • We can approve you at any credit score, no minimum required.
  • No processing or application fees required.
  • Full-featured Platinum MasterCard, accepted for car rentals, hotels, and millions of other locations worldwide.
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 - $2,000 Submitted with Application
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
9.99% (Variable)
$49
Bad / No Credit
First Progress Platinum Select MasterCard® Secured Credit Card Review

at First Progress'ssecure website

SECURED RATING

★★★★
3.8

OVERALL RATING

2.7/5.0
  • Fund your new MasterCard® secured credit card with your tax refund today!
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Good for Car Rental, Hotels; Anywhere Credit Cards are Accepted!
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 - $2,000 Submitted with Application
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
13.99% (Variable)
$39
Bad Credit
First Progress Platinum Elite MasterCard® Secured Credit Card Review

at First Progress'ssecure website

SECURED RATING

★★★
3.2

OVERALL RATING

2.0/5.0
  • Fund your new MasterCard® secured credit card with your tax refund today!
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Good for Car Rental, Hotels; Anywhere Credit Cards are Accepted!
  • Monthly Reporting to all 3 Major Credit Bureaus to Establish Credit History
  • Credit Line Secured by Your Fully-Refundable Deposit of $200 - $2,000 Submitted with Application
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
19.99% (Variable)
$29
Bad Credit

One important thing to keep in mind when exploring secured credit cards, particularly if your intent is to build (or rebuild) credit, is that your new card must report to at least one — but, preferably, all three — of the major consumer credit bureaus — Equifax, Experian, and TransUnion.

The credit bureaus don’t actively seek out information; creditors and lenders need to report it to the bureaus for it to show up on your report. Without regular reports on your payment behaviors from your creditors, the credit bureaus won’t have any idea whether you’ve been making your payments as agreed.

Since the whole point of your credit report is to show future creditors that you can handle credit, any product that fails to report that information won’t help you build a positive credit history. (Incidentally, this is why prepaid cards don’t help — or hurt — your credit score.)

Build — or Rebuild — Credit with the Right Secured Card

With the help of a good secured credit card, almost anyone can find a way to rebuild their credit score. In Katie’s case, a year of responsibly using her secured credit card improved her credit score enough that her bank upgraded her secured card to an unsecured card, returning her deposit in the process. Her new unsecured credit card had a whopping $2,000 credit limit, likely boosting her score even more through a lower utilization rate.

For those, like Katie, who are fighting poor credit scores and bad financial habits, a secured credit card can help spark light at the end of the tunnel — but only when used responsibly. Remember to always, always pay your bills before the due date to avoid both late fees and credit damage, as well as maintaining low balances so your utilization rate stays low, too.