How Does a Secured Credit Card Work? (+ 5 Best Cards) – June 2026

I recall researching my very first credit card as a college student and seeing a lot of terms I was unfamiliar with — secured cards, unsecured cards, APRs — and one of the big questions that jumped out at me was, “How does a secured credit card work?”

Thankfully, as a finance writer and through personal experience, I’ve become much more familiar with the credit card lingo over the years.

Secured credit cards are a great resource for anyone with poor credit looking to a) receive a line of credit and b) improve their credit score. Secured cards work the same way unsecured cards do in terms of purchasing abilities – if your secured card is Visa or MasterCard branded, it can be used anywhere Visa or MasterCard is accepted.

The only difference between a secured and unsecured card is that secured cards require a deposit upon approval. This is because secured credit cards are for people with low credit scores (600 or less) who do not qualify for a line of unsecured credit, that is, a card that doesn’t require a deposit. Below we’ll discuss how secured credit cards work, beginning with the application process. We’ll also walk through the deposit process and how it works, in addition to providing some steps to help you move up to an unsecured card.

The way of the world seems to be the worse your credit is, the less favorable the terms and options for credit become. This isn’t necessarily true for secured credit, because some of the biggest and most reputable issuers offer secured lines of credit that can be a valuable tool in your credit-rebuilding process. The Capital One Platinum Secured Credit Card, in particular, is our top recommendation.

The secured Chime Visa® Credit Card

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The secured Chime Visa® Credit Card

4.5/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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Ashley Fricker Senior Editor

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★★★★★ 4.5/5.0

at Chime'ssecure website

Our Review »

• No minimum balance requirements*
• No credit check**
• 2% cash back on category of choice with direct deposit***
• The perks of credit building meet the best of banking****
• Chime Checking Account required to apply for the Chime Visa® Credit Card

• Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The secured Chime Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A. pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank.
  *Money added to Chime CardTM will be held in a secured deposit account as collateral for your Chime Card, and you can spend up to this amount. You can use money deposited in your Secured Deposit Account to pay off your charges at the end of every month.
  **Out-of-network ATM withdrawal and over the counter advance fees may apply.
  ***With a qualifying direct deposit, earn 2% cash back on category of choice on eligible secured Chime Visa® Credit Card purchases.
  ****On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Results may vary.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR N/A

Annual Fee No annual fees

Credit Needed Poor/Fair/Limited/Damaged

Secured Self Visa® Credit Card

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Secured Self Visa® Credit Card

4.2/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

Ashley Fricker Senior Editor

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★★★★★ 4.2/5.0

at the issuer'ssecure website

• The secured Self Visa® Credit Card* requires no credit check or minimum score.
• Reports to all 3 major credit bureaus to establish and build credit, with free access to your credit score.
• Secure your credit line with a refundable security deposit as low as $100.**
• Deposits are returned upon account closure after settling outstanding balances.
• *The secured Self Visa® Credit Card is issued by Lead Bank, Sunrise Banks, N.A., or First Century Bank, N.A., each Member FDIC.
• **Qualification for the secured Self Visa® Credit Card is based on meeting eligibility requirements, including income and expense requirements and establishment of security interest. Criteria subject to change.

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR Variable APR of 27.49%

Annual Fee $0 annual fee for the first year only, $25 annual fee thereafter

Credit Needed None, Limited, Poor, Fair

opensky® Secured Visa® Credit Card

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opensky® Secured Visa® Credit Card

4.0/5.0

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Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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★★★★★ 4.0/5.0

at Capital Bank N.A.'ssecure website

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• Earn up to 10% cash back on everyday purchases
• No credit check required – 89% approval rate with zero credit risk to apply!
• Boost your credit score fast—2 out of 3 opensky® cardholders see an average increase of 47 points after 6 months
• Track your progress with free access to your FICO® score in our mobile app
• Build your credit history with reporting to all three major credit bureaus: Experian, Equifax, and TransUnion
• Seamless payments—add your card to Apple Pay, Google Pay, and Samsung Pay
• Start with just $200—secure your credit line with a refundable deposit
• Fast and easy application—apply in minutes with our mobile-first experience
• Flexible payment options—pick a due date that works for you
• More time to fund—spread your security deposit over 60 days with layaway
• Join 2 million+ cardholders who have used opensky® to build better credit!

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 23.89% (variable)

Annual Fee $35

Credit Needed No credit, Poor, Fair

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Capital One Platinum Secured Credit Card

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Capital One Platinum Secured Credit Card

4.0/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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Ashley Fricker Senior Editor

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★★★★★ 4.0/5.0

at Capital One®'ssecure website

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• 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 at least 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
• Monitor your credit score with CreditWise from Capital One. It's free for everyone
• Get access to your account 24 hours a day, 7 days a week with online banking to access your account from your desktop or smartphone, with Capital One's mobile app
• Top rated mobile app

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Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 28.99% (Variable)

Annual Fee $0

Credit Needed Limited, Bad

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Capital One Quicksilver Secured Cash Rewards Credit Card

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Capital One Quicksilver Secured Cash Rewards Credit Card

4.0/5.0

About this rating

Our experts rate credit card offers based on factors like rewards, APRs, signup bonuses, fees, and approval rates, with a focus on benefits that provide the best value. We also consider cardholder needs such as credit-building potential, issuer reputation, and customer service. Our ratings are unbiased, updated regularly, and not influenced by issuers.

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Ashley Fricker Senior Editor

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★★★★★ 4.0/5.0

at Capital One®'ssecure website

Our Review »

• No annual or hidden fees, and you can earn unlimited 1.5% cash back on every purchase, every day. See if you're approved in seconds
• Put down a refundable $200 security deposit to get at least a $200 initial credit line
• Building your credit? Using a card like this responsibly could help
• Enjoy peace of mind with $0 Fraud Liability so that you won't be responsible for unauthorized charges
• 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
• Earn unlimited 5% cash back on hotels, vacation rentals and rental cars booked through Capital One Travel
• Monitor your credit score with CreditWise from Capital One. It's free for everyone
• Top rated mobile app

Show MoreShow Less See application, terms and details »

Intro (Purchases) N/A

Intro (Transfers) N/A

Regular APR 28.99% (Variable)

Annual Fee $0

Credit Needed Limited, Bad

See Rates & Fees »

When choosing a secured credit card, be sure to select one that reports to the three major credit bureaus – Experian, Equifax, and TransUnion – as this is the only way your responsible use of the card will do your credit score any good, but more on that later.

As mentioned previously, the only difference between secured and unsecured comes down to the deposit. A deposit is the issuer’s way of protecting itself in the event you default on payments, in which case the money is then deducted from the deposit. The deposit amount will be equal to the amount of credit you receive.

A partially-secured credit card, or semi-secured, is where you make a deposit that is smaller than the line of credit you receive. In some cases, an issuer will give you a line of credit larger than the required deposit, but this is solely based on your income and credit history, and at the discretion of the issuer. It has been reported that the Capital One Platinum Secured Credit Card offers partially-secured lines of credit to eligible applicants and periodically increases credit limits without an additional deposit to its responsible cardholders.

The issuer will hold onto your deposit until you close the account, in which case you will receive a refund for any unused portion. So long as you have a history of on-time payments and close the account after the balance is paid in full, you should see 100% of your deposit refunded. This system protects both you and the issuer if a payment is missed, which leads us nicely to our next point of discussion.

Just because you have a safety net in your deposit does not mean you should rely on it to pay your bill each month! This is not responsible behavior, and you will be reported as having paid late, which is the most heavily weighted factor when determining your credit score. Deducting from your deposit is generally reserved for multiple missed payments, but can vary by issuer.

Whether you’re booking a hotel room online or looking to rent a car, a secured credit card can be used just as an unsecured card can, except in one of the following scenarios:

• Your secured card is a Mastercard, but where you’re attempting to transact doesn’t accept Mastercard.
• You forgot to pay your bill, and now your account is frozen due to nonpayment.
• You don’t have enough available credit on your card and are denied at the register to prevent overages.

Of course, each of these scenarios is applicable to unsecured cards, too. The bottom line is the person behind the cash register should be none the wiser to the fact your credit card is a secured card. The only way to tell it is a secured credit card is by viewing your credit report, where the line of credit will be listed as “secured”.

This is where we explain how having a secured credit card can help build or rebuild your credit history. It can be a slow moving process, but nonetheless a step in the right direction.

There are really only two rules you need to follow to be a responsible borrower:

1. Always pay your bill on time. This is because on-time payments account for 35% of your FICO credit score. Nothing else matters as much as on-time payments – it is the highest weighted factor when your credit score is calculated.
2. Keep your credit utilization low. In other words, don’t max out your card. In fact, don’t even come close to maxing out your card. It is widely suggested to keep your credit utilization at or below 30% at all times. For example, if you have a credit limit of $1,000, never keep a balance above $300.

If you follow these two rules, you should see an improvement in your credit score as your bank begins to report your responsible behavior, which normally occurs once a month.

After having your secured card for a period of time and seeing your financial discipline reflected in your credit score, you may then be eligible to apply for an unsecured card. Aside from not having to put any money down to receive the credit, many unsecured cards offer rewards programs where you can start racking up air miles, cash back, or any other type of credit card rewards you desire!

This means it’s time to say goodbye to the secured card that helped you establish your credit and close the account. Assuming your account is in good standing and you’re all paid up, you’ll have a nice stack of cash returned to you!