The Ultimate Guide to Credit Cards
Wednesday, November 25, 2020

6 Best Secured Credit Cards for Bad Credit (2020)

Best Secured Credit Cards For Bad Credit

credit card advice

Adam West
By: Adam West
Updated: February 3, 2020
Advertiser Disclosure

When it comes to identifying the best secured credit cards for bad credit, look no further, because our experts have compiled what we believe to be some of the best options to help consumers being rebuilding their credit and financial wellness.

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, even people with only a single credit card and a low limit can fall behind on payments and accrue late fees and interest charges that quickly turn into thousands of dollars in debt.

And by the time the debt is paid off, missed payments may have already taken their toll on someone’s credit score, dropping them firmly in the “bad credit” range. However, secured credit cards offer a way to help rebuild 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
  • Unlike a prepaid card, there is regular reporting to the 3 major credit bureaus
  • Accepted at millions of locations worldwide
  • Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line
  • Access to an authorized bank account is required to make your $49, $99 or $200 refundable security deposit
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
26.99% (Variable)
$0
Limited, Bad

2. Discover it® Secured

This card is currently not available.

Secured Rating

★★★★★
N/A

OVERALL RATING

N/A
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
N/A
N/A
N/A

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
17.39% (variable)
$35
Poor

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 (amounts owed) 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
  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • No Credit History or Minimum Credit Score Required for Approval
  • 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
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.
  • Apply in just a few moments with no negative impact to your credit score; no credit inquiry will be recorded in your credit bureau file
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
9.99% (V)
$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
  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum Mastercard® Secured Credit Card
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
13.99% (V)
$39
Poor/Limited/No Credit
The First Progress Platinum Elite MasterCard® Secured Credit Card Review

at First Progress'ssecure website

SECURED RATING

★★★★
3.8

OVERALL RATING

2.3/5.0
  • Invest your tax refund to improve your credit by making the refundable deposit for your new secured card today
  • Receive Your Card More Quickly with New Expedited Processing Option
  • No Credit History or Minimum Credit Score Required for Approval
  • Quick and Complete Online Application
  • Full-Feature Platinum MasterCard® Secured Credit Card
  • Nationwide Program though not yet available in NY, IA, AR, or WI *See Card Terms.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
19.99% (V)
$29
Poor/Limited/No 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. A year of responsible use of a secured credit card can improve someone’s credit score enough that their bank or issuer may upgrade them to an unsecured card with a significantly higher credit limit, which can boost credit scores even more through lower utilization rates.

For those 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.

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