The Ultimate Guide to Credit Cards
Friday, January 28, 2022

Credit Cards For Bad Credit With Deposit in 2022

Credit Cards For Bad Credit With Deposit

credit card advice

Eric Bank
By: Eric Bank
Posted: January 6, 2022
Advertiser Disclosure

If you think only a handful of good credit cards for bad credit with deposit exist, think again. We’ve assembled 13 of the best secured credit cards that just about anyone can quickly obtain. 

The collection is big enough to warrant grouping the cards into different categories based on deposit requirements, rewards, and APR. You just may find one of these to be the best credit card for your needs. 

Secured Cards With Low Deposit Requirements

Most secured cards require your deposit to match your initial credit line. These two cards break that rule in your favor.

  • No annual or hidden fees. See if you’re approved in seconds
  • Building your credit? Using the Capital One Platinum Secured card responsibly could help
  • Put down a refundable security deposit starting at $49 to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won’t be responsible for unauthorized charges
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
26.99% (Variable)
$0
Limited, Bad

The Capital One Platinum Secured Credit Card may allow you to deposit less than your initial credit line. The exact amount depends on the issuer’s assessment of your creditworthiness. This Platinum Mastercard requires you to have access to an authorized bank account to fund your security deposit.

Secured Sable ONE Credit Card Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.5

OVERALL RATING

4.0/5.0
  • Earn 2% cash back on everyday purchases at Amazon, Uber, Uber Eats, Whole Foods, Netflix, Spotify, and More! And 1% cashback on everything else!
  • No credit check or US credit history required.
  • No SSN required for non-US citizens.
  • Build US credit history from day 1 at major credit bureaus (get $25 when you build your credit score to a 700+ credit score within 12 months of use).
  • Get unsecured in as little as 4 months!
  • No annual fee, no foreign transaction fees, no minimum security deposit.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
Prime + 6.99% APR
$0
No Credit

The Secured Sable ONE Credit Card is highly unusual in that it has no minimum deposit requirement. The card strives to refund your deposit in as little as four months. Add premium benefits and cash back rewards, and you have a secured card that deserves serious consideration.

Secured Cards With Rewards

You may be surprised at the variety of subprime secured credit cards in this group, considering that so few unsecured cards for bad credit offer rewards. Moreover, these cards do not burden you with many of the nuisance fees that accompany their unsecured cousins.

SECURED RATING

★★★★★

4.8

OVERALL RATING

4.0/5.0
  • No annual or hidden fees, and you can earn unlimited 1.5% cash back. See if you’re approved in seconds
  • Building your credit? Using a card like this responsibly could help
  • Put down a refundable $200 security deposit to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won’t be responsible for unauthorized charges
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
26.99% (Variable)
$0
Limited, Bad

Unlimited cash back is just one of many reasons to get the Capital One Quicksilver Secured Cash Rewards Credit Card. You can raise your initial credit line by depositing more than the minimum required before activating your card. The maximum permitted deposit depends on your creditworthiness. 

Bank of America® Customized Cash Rewards Secured Credit Card Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.6

OVERALL RATING

4.0/5.0
  • Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1%
  • Unlimited 1% cash back on all other purchases
  • A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account
  • Access your FICO® Score updated monthly for free, within your Mobile Banking app or in Online Banking
  • Optional overdraft protection option helps prevent declined purchases, returned checks or other overdrafts when you link your eligible Bank of America® checking account to your credit card. Transfer fees may apply.
  • $0 annual fee
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
23.99% Variable
$0
Bad/Limited

Not only do you earn cash back from the Bank of America® Customized Cash Rewards Secured Credit Card, but you get to choose a merchant category for the top rewards rate. The card is an obvious choice for BoA customers and competitive enough to attract consumers who bank elsewhere. BoA may refund your deposit if you manage your account responsibly. 

Surge Secured Mastercard® Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.6

OVERALL RATING

3.9/5.0
  • Initial refundable deposit of $300 becomes your credit limit
  • 1% Cash Back rewards on every purchase
  • Free access to your Vantage 3.0 Score from Experian (When you sign up for e-statements)
  • Monthly reporting to the three major credit bureaus
  • Fast and easy application process; results in seconds
  • Use your card at locations everywhere Mastercard is accepted
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
19.99% Variable
$69
All Credit Types Welcome to Apply

The Surge Secured Mastercard® offers a moderate cash back rate on all purchases. The card comes with Mastercard Zero Liability Protection and a mobile app. You can opt for credit protection to pay your credit card bill under specific circumstances.

Discover it® Secured Credit Card Review

at Discover Card’ssecure website

SECURED RATING

★★★★★

4.5

OVERALL RATING

3.7/5.0
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • Using your secured credit card helps build a credit history with the three major credit bureaus. Generally, prepaid and debit cards can’t do that.
  • Establish your credit line with your tax return by providing a refundable security deposit of at least $200. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 7 months to see if we can transition you to an unsecured line of credit and return your deposit.*
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Discover is accepted nationwide by 99% of the places that take credit cards.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
10.99% Intro APR for 6 months
22.99% Variable APR
$0
New/Rebuilding

Fans of Discover will love the Discover it® Secured Credit Card, with its cash rewards and, for new cardmembers, unlimited Cashback Match for the first year after opening the account. You can freeze and reactivate the card at any time to control purchases, cash advances, and balance transfers. Its 100% US-based customer service is second to none.

nRewards® Secured Credit Card Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.5

OVERALL RATING

4.1/5.0
  • Earn 1X points per dollar spent
  • The Navy Federal nRewards Secured credit card lets you earn rewards while building your credit
  • No annual fees, no balance transfer fees, no foreign transaction fees, and no cash advance fees
  • Deposit at least $200 into your membership savings account (before submitting your application) to back your spending. Once approved, we’ll hold your deposit in your account as your card’s credit limit.
  • After just 3 months, you could be eligible for an upgrade. If you qualify, we’ll provide you with additional credit to allow for spending beyond your deposit. Then, at 6 months, we’ll review your account monthly to see if you’re eligible to have your hold removed and be upgraded to a cashRewards unsecured card.
  • Must be a member of Navy Federal Credit Union to qualify
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
18.00%
$0
None/Poor

If you are a credit union fan, check out the nRewards® Secured Credit Card. Its flexible rewards program lets you redeem your points for cash back, new purchases, merchandise, and gift cards. In addition, the card provides cellphone protection and rental car coverage at no extra cost.

Secured Cards With Low Interest Rates

Many secured credit cards distinguish themselves from similar unsecured cards by offering lower interest rates. We’ve identified the best secured cards with APRs below 20% to compile this list.

OpenSky® Secured Visa® Credit Card Review

at Capital Bank’ssecure website

SECURED RATING

★★★★★

4.7

OVERALL RATING

3.2/5.0
  • No credit check to apply and find out instantly if you are approved.
  • OpenSky gives everyone an opportunity to improve their credit with an 85% average approval rate for the past 5 years
  • Get considered for a credit line increase after 6 months, with no additional deposit required
  • You could be eligible for the OpenSky Gold Unsecured Card after as few as 6 months
  • Reports to all 3 major credit bureaus monthly, unlike a prepaid or debit card
  • Nearly half of OpenSky cardholders who make on-time payments improve their FICO score 30+ points in the first 3 months
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
17.39% (variable)
$35
Poor

The OpenSky® Secured Visa® Credit Card keeps its interest rates and fees low. Features include email alerts and fraud protection. You can quickly apply for the card in four short steps and set the credit limit, subject to approval.

Applied Bank® Secured Visa® Gold Preferred® Credit Card Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.6

OVERALL RATING

4.0/5.0
  • Better than Prepaid…Go with a Secured Card! Load One Time – Keep On Using
  • Absolutely No Credit Check or Minimum Credit Score Required
  • Automatic Reporting to All Three National Credit Bureaus
  • 9.99% Low Fixed APR – Your Rate Won’t Go Up Even if You Are Late
  • Activate Today with a $200 Minimum Deposit – Maximum $1,000.
  • Increase Your Credit Limit up to $5,000 by Adding Additional Deposits Anytime
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
9.99% Fixed
$48
Poor/Fair/Limited/Damaged

The rock-bottom fixed APR on the Applied Bank® Secured Visa® Gold Preferred® Credit Card is welcome since the card doesn’t offer an interest-free grace period on new purchases. You should receive an instant decision when you apply for this card. The card doesn’t charge an application fee or impose a penalty APR for late payments.

Merrick Bank Secured Visa® from Merrick Bank Review

at the issuer’ssecure website

SECURED RATING

★★★★

4.3

OVERALL RATING

3.3/5.0
  • Choose your own credit line based on how much money you want to put down as a security deposit.
  • Initial deposits can be from $200 to $3,000. You can increase your credit line at any time by adding additional money to your security deposit, up to $3,000.
  • After 9 months, we review your account for a credit line increase. No additional deposit required!
  • Secured Credit Cards are great for people looking to build or rebuild credit and are available to people with all kinds of credit backgrounds.
  • Unlike a debit card or a pre-paid card, it helps build your credit history. As you pay your bill every month, we report to all three major credit-reporting agencies.
  • Get 100% U.S.-based customer service & get your FICO® Credit Score for free each month.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
17.45% Variable
$36 for first year. Billed $3 per month thereafter
See website for Details*

The Merrick Bank Secured Visa® from Merrick Bank does not charge setup or maintenance fees. Its annual fee is relatively low and converts from yearly to monthly billing after the first year. You can choose any of the card’s multiple color schemes at no additional cost.

First Progress Platinum Prestige MasterCard® Secured Credit Card Review

at First Progress’ssecure website

SECURED RATING

★★★★

3.9

OVERALL RATING

2.9/5.0
  • 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; No credit inquiry required!
  • Includes Free Real-Time Access to Your Credit Score and Ongoing Credit Monitoring powered by Experian
  • Full-Feature Platinum Mastercard® Secured Credit Card; Try our new Mobile App for Android users!
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
9.99% (V)
$49
Bad / No Credit

The First Progress Platinum Prestige MasterCard® Secured Credit Card offers the lowest APR among this issuer’s Platinum Mastercard trio. It also has the highest annual fee of the three and the widest gap between its eligible purchase and cash advance APRs. The First Progress Platinum Mastercards aren’t available in Arizona, Iowa, New York, or Wisconsin.

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
  • 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; No credit inquiry required!
  • Includes Free Real-Time Access to Your Credit Score and Ongoing Credit Monitoring powered by Experian
  • Full-Feature Platinum Mastercard® Secured Credit Card; Try our new Mobile App for Android users!
  • Good for Car Rental, Hotels; Anywhere Credit Cards Are Accepted!
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
19.99% (V)
$29
Poor/Limited/No Credit

The The First Progress Platinum Elite MasterCard® Secured Credit Card welcomes applicants with poor credit. It offers the lowest annual fee among its siblings and the highest APRs for purchases and cash advances. In addition, the credit card company provides you with a grace period on all its secured cards.

First Progress Platinum Select MasterCard® Secured Credit Card Review

at First Progress’ssecure website

SECURED RATING

★★★★

3.8

OVERALL RATING

2.7/5.0
  • 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; No credit inquiry required!
  • Includes Free Real-Time Access to Your Credit Score and Ongoing Credit Monitoring powered by Experian
  • Full-Feature Platinum Mastercard® Secured Credit Card; Try our new Mobile App for Android users!
  • 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 Select MasterCard® Secured Credit Card offers an annual fee and an APR that fall in the middle range of those of its siblings. All three cards impose relatively few other fees on cardmembers. 

What Is a Secured Credit Card?

Secured credit cards allow consumers with poor, limited, or no credit to participate in the credit market. It is the best credit card type to establish or build credit no matter your past financial problems.

Secured cards work like any other credit card, except that you must submit a refundable security deposit to qualify for one. You can use them to pay your bills, make purchases, and borrow money.

Secured vs. Unsecured Credit Cards

Your less-than-perfect credit won’t prevent you from obtaining a secured credit card because your posted collateral protects issuers if you default on your payments. Many of these cards do not even perform hard credit checks on applicants. 

It would be an overstatement to say your credit score has no impact on your ability to get a secured card. My research indicates that you cannot prequalify for these cards if you have a good or excellent credit score. It may sound perverse, but the biggest obstacle to procuring a secured credit card may be a clean credit history.

Credit card companies typically attempt to graduate their secured-card customers to one of their unsecured cards. You must pay your bills on time for a set period before receiving this upgrade.

The move to an unsecured credit card helps you by refunding your security deposit. But it also helps the credit card company because your new unsecured credit card may carry higher fees and interest rates, meaning more revenue.

So carefully consider whether you want the issuer to transfer you to an unsecured account. You should first make sure that the move doesn’t end up costing you more money.

Typically, secured cards report your payments to all three credit bureaus. Triple reporting helps confirm your creditworthy behavior by allowing all three credit scores to climb in relative unison. 

This article looks at three essential characteristics of these cards (i.e., deposit requirements, rewards, and interest rates) to help you narrow your search for the secured card that best fits your needs.

Low Deposit Secured Cards

A secured card does not usually use your security deposit to pay your outstanding balance. But if you miss the payment due date, the issuer will tap your deposit for the missing amount and reduce your credit limit accordingly. 

If you miss more than one payment, the issuer will likely cancel your account and refund whatever remains of your deposit.

In almost all cases, secured cards require an initial deposit equal to the starting credit limit. For example, if your credit limit starts at $200, you must first deposit $200 to receive the card. 

However, we’ve identified two secured cards with low deposit requirements. The first is the Capital One Platinum Secured Credit Card, which may allow you to deposit less than your approved credit limit.

SECURED RATING

★★★★★

4.7

OVERALL RATING

4.0/5.0
  • No annual or hidden fees. See if you’re approved in seconds
  • Building your credit? Using the Capital One Platinum Secured card responsibly could help
  • Put down a refundable security deposit starting at $49 to get a $200 initial credit line
  • You could earn back your security deposit as a statement credit when you use your card responsibly, like making payments on time
  • Be automatically considered for a higher credit line in as little as 6 months with no additional deposit needed
  • Enjoy peace of mind with $0 Fraud Liability so that you won’t be responsible for unauthorized charges
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
26.99% (Variable)
$0
Limited, Bad

We also include the Secured Sable ONE Credit Card in this category because of its unusually flexible minimum deposit policy. The issuer states that you can offer any deposit up to the maximum permitted to establish a credit line of equal value. 

Does that mean the issuer will open an account with a $1 credit limit? I don’t know — if you do, please write us!

Rewards Secured Cards

There was a time when it was rare for a secured credit card to offer rewards. But times have changed, and we’ve identified five secured cards with rewards — one points card and four cash back cards.

Cash back is the most popular reward for this class of credit cards. The nRewards® Secured Credit Card is the sole card to offer points instead of cash back. You have a few options, including cash back and gift cards, when you want to redeem your points.

How to Earn Credit Card Rewards

Unsurprisingly, these rewards cards do not offer signup bonuses. It would be slightly inappropriate to demand a deposit and then pay you an introductory bonus for spending a set amount in the first three months. 

Some types of secured reward cards are difficult to find. Few secured business credit card examples offer rewards, and many issuers do not even offer unsecured versions for bad credit. 

For example, Credit One Bank serves the subprime market but doesn’t offer a secured business credit card, even though you can get a secured Credit One Bank Visa card. 

Low APR Secured Cards

It is fitting and proper for secured credit cards to offer lower APRs because the issuers face little risk of loss due to cardmember default. But we must emphasize that the interest rates for low APR secured credit cards are lower than those for similar unsecured cards for bad credit, but not necessarily lower than APRs for cards for good to excellent credit.

Some otherwise good credit cards, such as the Citi® Secured Mastercard®, just missed inclusion in this category. The APR for the Citi® Secured Mastercard® is just a couple of percentage points above our 20% cutoff.

Nonetheless, the six secured cards in this category will cost you less than similar unsecured cards when carrying a balance over multiple billing cycles. Only one card charges interest on purchases immediately. The remainder offer grace periods of at least 21 days in which you can avoid interest charges by paying the entire balance due.

All the cards immediately charge interest on cash advances. The cash advance APR is several percentage points higher than the purchase APR in most cases. The gap between the two APRs in the three First Progress Platinum cards varies from 5 to 11 percentage points.

What Does “Bad Credit” Mean in Terms Of Credit Cards?

Your credit score determines the type of credit you have. The FICO scoring system predominates the consumer credit score market and is the score that holds the most significant sway over card issuers. 

FICO uses a scoring range from 300 (worst credit) to 850 (perfect credit). Each card issuer has its own ideas about how to classify FICO scores and the corresponding interest rates it charges.

Credit Card APRs by FICO Score

The chart indicates that credit scores below 580 are bad, but that value isn’t carved in stone. Some card issuers may choose a higher or lower cutoff for poor credit. The fact that you have three different FICO scores (one each from the major credit bureaus) only muddies the picture further. 

Rather than concentrate on a particular score to characterize bad credit, it makes more sense to describe the ways a low credit score affects credit card consumers:

  • High interest rates: Bad credit usually consigns you to a relatively high credit card APR. The chart’s less than 25% estimated APR for bad credit is an average of both unsecured and secured credit cards, but you can expect a somewhat lower APR for secured cards alone. 
  • Many fees: All credit cards have fees, but the fees for bad credit consumers include fees for account setup, maintenance, and credit limit increases. But most secured cards omit these extra charges.
  • Low credit limits: If you have bad credit, you present enhanced default risk to card issuers. Most subprime credit cards, secured and unsecured, offer modest starting credit limits, typically less than $500. A few of the reviewed cards allow you a higher initial limit if you deposit large sums, but it’s unusual for secured cards to allow credit lines above $5,000.
  • Limited perks: Secured credit cards offer better rewards and benefits than unsecured cards for bad credit. Even so, neither type of card comes close to matching the goodies from cards for good or excellent credit. You are doing well if you can get a cash back or points card despite having bad credit. A few secured cards offer valuable benefits, such as insurance for car rentals or cellphones. All cards provide fraud protection, and many also give you free access to one of your credit scores. 

If you can boost your credit score into the fair range, you’ll qualify for better quality cards with lower interest rates, fewer fees, higher credit lines, and more generous benefits. It’s no exaggeration to say that good credit can help improve your lifestyle. 

How Does a Secured Credit Card Work?

The fact that your credit card is secured remains your little secret because cards don’t broadcast it. Secured cards carry the same payment network logos (mainly Visa and Mastercard) and merchant acceptance as unsecured cards. 

The requirement for a security deposit sets secured cards apart, allowing consumers with abysmal credit to pay with plastic and then finance their purchases over time.

Issuers of secured cards will refund your deposit for a few reasons:

  • You close the account.
  • The issuer cancels your card.
  • You graduate to an unsecured credit card from the same issuer.

If the account is terminated, the issuer will deduct any remaining balance before refunding your deposit.

The security deposit solves the problem many subprime consumers face — how to qualify for a credit card — by allowing issuers to bypass the normal credit checking process that unsecured cards follow. 

When applying for a secured card, you still have to provide information about your earnings and expenses, but you will probably avoid a hard credit check from the issuer. Card issuers will conduct hard credit checks for credit and loan applications, and you must authorize a hard check before an issuer can request copies of your credit reports.

Bypassing credit checks have two main upsides for secured credit card applicants:

  1. It increases your approval chances since your previous credit problems will not color the issuer’s decision.
  2. You avoid a hard credit check that can lower your credit score by five to eight points for up to a year. Hard pulls remain on your credit reports for two years. According to FICO, these checks hurt your score due to the correlation between frequent new credit requests and defaults. 

Another feature of secured credit cards is credit reporting. Virtually all of these cards report your payments to all three credit bureaus. Reporting to all three bureaus helps ensure that your credit reports show the progress you’re making by paying your bills on time and controlling your debt levels. 

But beware, it will also disclose the opposite if you fail to exhibit creditworthy behavior. 

Secured cards are second only to student credit cards as practical tools for establishing credit. Both card types are generally easier to obtain, but if you aren’t a student, then a secured card is your best method to start compiling a credit history.

How Fast Can You Build Credit With a Secured Card?

Patience is a necessary virtue when building credit. It usually takes several months to begin seeing results, assuming you consistently pay your credit card bills on time.

There are a few quick ways to improve your credit score. The first is to reduce your credit utilization ratio (CUR), which is the amount of credit you use versus the amount available. 

How to Build Credit With a Credit Card

FICO penalizes you when your CUR exceeds 30%, but you can rapidly fix the problem by paying down your outstanding credit card balances. You may see your score improve in as little as one month.

Another way to get a quick score increase is to remove derogatory items from your credit reports. You do this by disputing the incorrect, unfair, or expired items on your reports. The major credit bureaus have online facilities to help you file disputes, which the bureaus must investigate and resolve within 30 days.

If you don’t want to fix your credit report on your own, you can hire a credit repair service to do the work for you.

Choose a reputable service that spells out the level of support you’ll receive, including the number and types of disputes it will file each month. Subscriptions typically run for four to six months and cost between $50 and $150 per month.

You may earn a slight score increase by signing up for Experian Boost or similar services that provide enhanced payment reporting. For example, these services may report your utility, mobile phone, and rent payments. Experian includes the additional data when refiguring your Experian FICO Score each month.

Unfortunately, serious credit problems remain on your credit reports for up to 10 years. Building credit is difficult when your credit report is filled with derogatory items.

Time Items Remain on Credit Reports

A negative item’s impact on your score will begin to fade before it falls off the report. Depending on your credit history, you may see your score uptick in two to three years following a major credit problem.

Can You Be Denied a Secured Credit Card?

No credit card accepts 100% of applicants, including secured cards. The following factors can trip up your application:

  • A recent bankruptcy filing.
  • An inability to repay debt.
  • Recent repossessions, foreclosures, or collection accounts.
  • Mistakes on your application that prevent processing.
  • Not having a verifiable income.
  • Not being able to verify your identity.

If the credit card issuer rejects your application, it must send you an Adverse Action Letter that explains why you didn’t qualify for the card or loan. This letter explains the reasons for the rejection and some tips for improving your credit score.

If you’re not able to get a secured card, you may want to consider a prepaid card instead. A prepaid card lets you make cashless payments without the need for credit or a bank account. 

How Long Before a Secured Card Becomes Unsecured?

Do not assume that you will automatically graduate from a secured card to an unsecured card. You must earn the upgrade by paying your bills on time, every time. 

It also helps to maintain a low credit balance and avoid overstepping your credit limit. If you follow the rules, you may receive an upgrade in as little as four months, although the required period is usually six to 12 months.

The Secured Sable ONE Credit Card probably has the most aggressive program for promoting cardholders to an unsecured card. Sable uses explicit criteria and milestones to let you quickly establish your creditworthiness in as little as four months.

Upon graduation, the credit card issuer will upgrade you to an unsecured Sable One credit card without a credit check.

Secured Sable ONE Credit Card Review

at the issuer’ssecure website

SECURED RATING

★★★★★

4.5

OVERALL RATING

4.0/5.0
  • Earn 2% cash back on everyday purchases at Amazon, Uber, Uber Eats, Whole Foods, Netflix, Spotify, and More! And 1% cashback on everything else!
  • No credit check or US credit history required.
  • No SSN required for non-US citizens.
  • Build US credit history from day 1 at major credit bureaus (get $25 when you build your credit score to a 700+ credit score within 12 months of use).
  • Get unsecured in as little as 4 months!
  • No annual fee, no foreign transaction fees, no minimum security deposit.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
N/A
N/A
Prime + 6.99% APR
$0
No Credit

Sable Bank is by no means the only issuer facilitating upgrades. Capital One offers its Credit Steps Program to help cardholders get better cards and higher credit limits. The program uses several factors to gauge the creditworthiness of participants, including:

  • The average monthly payment amount
  • Credit bureau reports
  • On-time payments
  • Regular card use
  • Whether you use a significant portion of your existing credit line
  • Your credit score

The issuer automatically enrolls you in the program when you obtain one of its cards for bad or fair credit, including the Capital One Platinum Secured Credit Card

Clearly, Capital One is serious about giving subprime consumers a second chance to prove they can handle credit responsibly.

On the other hand, some issuers of secured cards do not automatically evaluate cardholders for promotion to an unsecured card. For example, the OpenSky® Secured Visa® Credit Card states that “Your secured card will stay a secured Visa® credit card.”

However, nothing is stopping you from applying for an unsecured credit card if your current issuer doesn’t offer to refund your security deposit. You will want to wait at least six months after opening a secured account to apply for an unsecured card.

What Kind of Fees Are Associated With Secured Cards?

Good news: Most secured cards do not charge the nuisance fees that unsecured cards for poor credit extract from cardholders, such as fees for account setup, maintenance, and credit limit increases.

Instead, you will likely encounter the following costs:

  • Interest rate charges: Cards charge daily interest if you finance an unpaid balance over multiple billing cycles. Secured card APRs below 20% are typical, with cards charging as little as 9.99%. You can lock in a 0% interest rate by paying your bill in full every month (except if the card does not offer a grace period on purchases). 
  • Annual fee: Many secured credit cards waive annual fees, and those that don’t usually impose an annual fee no greater than $50. We think it’s inappropriate for a secured card to collect a yearly fee and a security deposit, but not all issuers agree.
  • Foreign transaction fee: This charge usually amounts to 3% of the dollar value for each foreign purchase. If you don’t plan to travel abroad, you can ignore this fee.
  • Cash advance fee: All credit cards charge this fee, although a few subprime unsecured cards waive it for the first year. The cost is usually 3% to 6% of the advance with a $10 minimum. Typically, the APR on cash advances exceeds that for purchases. Interest on cash advances begins to accrue immediately — there are no grace periods for cash advances.
  • Balance transfer fee: Most secured credit cards do not allow balance transfers. This omission isn’t usually a problem since a secured card is likely the cardholder’s only card, and tight credit limits wouldn’t allow for sizable transfers. Unsecured cards are a better fit for transferring balances. 
  • Late fees: A late payment will trigger a charge in the $28 to $40 range. Usually, a similar fee applies to returned payments. The Discover it® Secured Credit Card uniquely waives this fee the first time you pay late. 
  • Miscellaneous fees: Some secured cards may charge for various services, such as adding an authorized user, ordering additional cards, or requesting an expedited card shipment.

Always check the mandatory Schumer Box for the complete fee rundown when evaluating a credit card.

Compare Credit Cards For Bad Credit With Deposit

Our review of credit cards for bad credit with deposit requirements clarifies why we like secured credit cards so much. When compared with unsecured cards for subprime consumers, secured cards offer better perks, lower costs, and easier access. 

You can research or apply for any of the reviewed cards by clicking on the APPLY NOW links in the summary boxes. Read the fine print before accepting a credit card so you can make an informed decision on the best one for you.

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