Whether you need your first credit card or you’re looking to build credit history, secured credit cards are a great way to go about it. These cards work very similarly to unsecured credit cards (or regular credit cards), except secured cards are backed by a security deposit. Other than the deposit, you can charge them just like regular cards, repay your balance and build a positive credit history.
And the pièce de résistance — secured cards are much easier to qualify for than regular credit cards, so having bad or no credit history shouldn’t be too much of a problem.
The Extra Debit Card is issued by Evolve Bank & Trust or Patriot Bank N.A. (Member FDIC), pursuant to a license by Mastercard International. Line of credit provided by Lead Bank. Extra is responsible for credit reporting and reports on time and late payments, which may impact a credit bureau’s determination of your credit score. Rewards points only available with rewards plan.
With no annual fee, decent cashback rewards, no credit score requirement and unlimited cashback match for your first year, the Discover it® Secured easily takes the win as the best overall secured card in our eyes. Earn 2% cash back at places like gas stations and restaurants up to $1,000 per quarter and 1% unlimited on everything else. It requires a minimum deposit of $200, and after some time, Discover will see if you're eligible to upgrade to an unsecured credit card and earn your deposit back. And the cherry on top is that there is no credit score required for this card.
Pros
1% to 2% cash back
Unlimited cashback match for first year
No credit score requirement
Ability to upgrade with good repayment history
Cons
Requires minimum $200 security deposit
Annual fee
$0
Minimum deposit required
Starting at $200
Purchase APR
28.24% variable
Balance transfer APR
10.99% intro for the first 6 months (then 27.99% variable) Balance transfer fee of 3%
U.S. Bank Cash+® Secured Visa® Card offers generous cashback rewards and requires a minimum opening deposit of at least $300. You can earn up to 5% cash back on your first $2,000 each quarter in two categories you choose, which include fast food, utilities, streaming, department stores and more. You also earn 5% cash back on travel purchases booked in US Bank's Rewards Travel Center, 2% cash back in one everyday category of your choice (gas, groceries, restaurants, etc.) and 1% on everything else. You also get identity theft protection powered by Norton LifeLock and get to choose your card's payment due date. US Bank states the card is designed for those with fair credit, which is often considered around a score between 580 and 669.
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, 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. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. *Out-of-network ATM withdrawal and OTC advance fees may apply. View the Bancorp agreement or Stride agreement for details; see back of card for issuer.
A long-winded name but no cash required upfront, the Chime® Credit Builder Secured Visa® Credit Card has no annual fee, no APR, no hard credit check and no minimum security deposit required. To get the card, you must have Chime's checking account and make direct deposits of at least $200 per month. The balance in your Chime account acts as your credit limit on the Credit Builder Card, and there are also no monthly fees or opening deposit requirements with the checking account either. However, the card doesn't offer perks like points, miles or cash back for making purchases.
Pros
$0 security deposit required
0% APR
No hard credit check
Cons
Requires Chime checking account with direct deposit
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, 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. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. *Out-of-network ATM withdrawal and OTC advance fees may apply. View the Bancorp agreement or Stride agreement for details; see back of card for issuer.
Chime is a financial technology company, not a bank. The secured Chime Credit Builder Visa® Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC, 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. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month. *Out-of-network ATM withdrawal and OTC advance fees may apply. View the Bancorp agreement or Stride agreement for details; see back of card for issuer.
Capital One Platinum Secured Credit Card is a top-secured card option with flexible and low deposit requirements. You'll get a minimum $200 credit line with a security deposit of either $49, $99 or $200. You can make your security deposit payment in installments and deposit more to increase your credit line. Similar to the Discover secured card, Platinum Secured Credit Card offers the ability to get a higher credit limit after six months with responsible management, and Capital One offers upgrade options and the ability to earn your security deposit back. However, this card doesn't offer any rewards.
Pros
Flexible, low security deposit options
Upgrade options and ability to earn deposit back
Accepts low credit scores
Cons
No rewards program
Annual fee
$0
Minimum deposit required
$49, $99 or $200
Purchase APR
29.99% variable
Balance transfer APR
29.99% variable Balance Transfer Fee applies to balances transferred at a promotional rate (0% at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you)
The Fizz card was designed by and for college students. With no annual or monthly fee, no credit check and no APR, it's a great starter card for students. To get the Fizz card, you'll need an existing bank account with a $150 minimum balance. When you use the card, your owed balance is automatically repaid with your linked account, so there are no interest charges. Fizz also reports to all three credit bureaus, which isn't always super common with fintech companies with products like Fizz. The card also features cashback reward offers, up to 25% daily and sometimes 75% to 100% for flash offers, often with places frequently by college campuses. However, since your credit limit is based on your linked account, the Fizz card isn't suited for emergencies, and there are no upgrade options.
Pros
No credit check
0% APR
No monthly or annual fees
25% to 100% cashback offers
Cons
Requires existing bank account with minimum $150 balance
The Step card has no age requirements, and teens as young as 16 can get a headstart on building credit history. It has no hard credit check, annual fee, monthly fee, APR or late fees. At age 18, teens can opt into credit building, and Step reports up to two years of their payment history to the three credit bureaus. The Step card is a secured card backed by your Step deposit account, so you can only spend what you have. The card's outstanding balance is repaid every month, so there's no APR to worry about. You can also enjoy up to 5% savings rewards with direct deposit, time-sensitive cashback offers, referral bonuses and much more. However, compared to other typical secured cards on this list, the Step card won't help you out in an emergency since your credit limit is based on what you have in your Step deposit account.
You can only use the Amazon Secured Card in Amazon stores or Amazon.com, but it features other perks and credit-building opportunities. You can get 2% cash back on Amazon purchases if you have Prime, and it has one of the lowest APRs we've seen on a secured card of just 10% and a very low late fee of just $5. You'll also get access to credit-monitoring services. After 12 months of responsible use, you may be eligible to upgrade to a traditional Amazon Store card, which offers up to 5% cashback rewards with a Prime membership. The Amazon Secured Card requires a deposit of $100 minimum, which you can deposit in increments of $50.
Pros
Up to 2% on Amazon purchases with Prime membership
Low 10% APR and $5 late fee
Upgrade option available
Make security deposit in installments
Cons
$100 minimum deposit required
Can only be used with Amazon
Annual fee
$0
Minimum deposit required
Starting at $100
Purchase APR
10% fixed
Balance transfer APR
N/A
Minimum credit score
New / limited credit
Minimum deposit required
Starting at $100
Purchase APR
10% fixed
Annual fee
$0
Minimum credit score
New / limited credit
Methodology: How we chose the best secured credit cards
Finder’s banking experts analyze over 40 secured credit cards with no annual fees. Secured credit cards either require an opening deposit or bank account as security, and we only considered cards with deposit requirements at or below $300. We favored cards with rewards, such as travel points or cash back, and cards with low or no APR.
$0 annual fee
Deposit requirement at or below $300
Lenient credit score requirements
Reports to all three credit bureaus
How do secured credit cards work?
Secured credit cards are a form of revolving credit. With secured or unsecured credit cards, your credit limit is how much you can borrow before the card becomes “maxed out.” When you use the card, you incur a debt you can pay in full or in installments. If you don’t repay your owed balance by the end of the billing cycle (typically month to month), your outstanding balance is charged interest. You must also make a minimum monthly payment each billing cycle, and if you don’t, you’ll incur late fees.
Secured cards work almost identically to regular credit cards — the only real difference is the security deposit requirement. The deposit serves two purposes: The amount you deposit typically sets your borrowing limit and acts as security for the lender if you can’t repay your balance. In comparison, traditional, unsecured credit cards don’t require a deposit but may require higher credit score requirements in return.
To find the right secured card, keep these points in mind:
The security deposit. Most secured cards require at least $200 to get started, and the deposit often sets your credit limit. If you want a high credit limit, count on needing a high security deposit, but if you want to build credit without the risk of high debt, a low deposit might be a better idea. In addition, there are secured cards without security deposit requirements, like the Fizz card, Chime® Credit Builder Secured Visa® Credit Card and the Step card.
Credit score requirements. Most secured cards have lenient credit score requirements, sometimes not requiring a hard credit check or a specific credit score requirement. However, some secured cards perform a hard credit check and require fair to good credit.
Credit reporting. Most traditional, secured credit cards will report to all three major credit bureaus, but there are credit-building products with limited reporting action, so look out for that.
Affordable fees. On our list of the best secured credit cards, we only considered cards with no annual fee. But if you widen your search, compare a card’s annual, monthly and late fees.
Upgrade options. Some secured cards will let you “graduate” or “upgrade” to an unsecured version or increase your credit limit after you prove good financial management, often after six months to a year.
Rewards and perks. One of the best perks with credit cards is the rewards, whether it’s cashback on everyday purchases or travel points. Traditional credit cards are more likely to offer rewards, but a few, like Discover it® Secured, Fizz card and the U.S. Bank Cash+® Secured Visa® Card, offer tempting rewards programs.
Can a secured credit card build credit history?
Yes! A secured credit card can build credit history just like a regular credit card. However, you’ll have to repay your owed balance each billing cycle diligently, or you could damage your credit score.
Secured credit cards are revolving credit, which means a major player in how credit cards impact your credit score is your credit utilization ratio. In a nutshell, this ratio is the amount of debt you owe compared to your available credit limits. For example, if you have a secured credit card with a limit of $1,000 and owe $900, you’ve got a high credit utilization ratio of 90%, and it’s likely harming your credit score. If you keep your credit utilization ratio under 30%, it can help your credit score.
And just like other types of credit, missed or late payments on your secured credit card can do major damage, often hurting your credit score by as much as 100 points per missed payment.
Is a secured credit card a good idea?
Secured credit cards can be worth it if you need to start your credit history or get on the path to credit repair. Thanks to their low credit score requirements, they can be a good idea for new or bad credit borrowers who need some positive credit history added to their credit reports.
However, you’ll have to pay attention to the card agreement and make your payments on time, or you can risk damage to your credit score. If you tend to overspend with credit cards, frequently miss payments or don’t have a budget, you may not be a good fit for credit cards.
Alternatives for credit building
Secured credit cards don’t have to be your introduction to credit-building or borrowing.
Rent reporting services. If you’re a renter and want credit history for those on-time payments, a rent-reporting service can be a great idea.
Credit-builder loans. Designed for new borrowers, credit-building loans are small installment loans offered by small banks or credit unions to build credit history.
Credit-building apps. There are lots of credit-building apps with tools like rent reporting, credit-building loans, subscription service credit-building, dispute tools and more.
Debit-credit cards. Similar to secured credit cards, debit-credit cards are backed by a linked bank account, just like Chime Secured Credit Builder Visa® Credit Card and the Fizz card. These cards often have no security deposit requirement, no APR and no annual fees.
A secured card can help you build up your credit score, but you’ll often face higher fees and lower rewards. If you’re on the fence, compare alternative credit cards to find the right pick for you.
Frequently asked questions
How much will I need to deposit for a secured card?
The deposit amount depends on the specific credit card as well as your existing credit score. Typically, the lowest amount you can deposit is either $200 or $300.
Why do I need to place a security deposit on a secured credit card?
In most cases, your security deposit sets your credit limit. Your security deposit serves as collateral for the card issuer if you fall behind or default on your account.
Can you get cash back on a secured credit card?
Yes, there are plenty of secured credit cards with cashback rewards. A few cashback secured credit cards include the Discover it® Secured card, the US Bank Cash+ Visa Secured Card and the secured Amazon credit cards.
Can you get denied for a secured card?
Yes, it is possible to be denied a secured credit card, even though many secured cards have lenient credit requirements. A few common reasons a credit card issuer can deny a credit card application include having a very poor credit history, a high credit utilization ratio or not having enough income to make minimum monthly payments.
Credit card ratings
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Our team evaluates credit cards to determine their value against similar cards on the market.
We rank card types — travel, cash back, business — on a set of factors that are most relevant to that type of card. We create these rankings to help you narrow down a credit card that best suits your spending and budget.
Bethany Hickey is the banking editor and personal finance expert at Finder, specializing in banking, lending, insurance, and crypto.
Bethany’s expertise in personal finance has garnered recognition from esteemed media outlets, such as Nasdaq, MSN, Yahoo Finance, GOBankingRates, SuperMoney, AOL and Newsweek. Her articles offer practical financial strategies to Americans, empowering them to make decisions that meet their financial goals. Her past work includes articles on generational spending and saving habits, lending, budgeting and managing debt.
Before joining Finder, she was a content manager where she wrote hundreds of articles and news pieces on auto financing and credit repair for CarsDirect, Auto Credit Express and The Car Connection, among others.
Bethany holds a BA in English from the University of Michigan-Flint, and was poetry editor for the university’s Qua Literary and Fine Arts Magazine. See full bio
Bethany's expertise
Bethany has written 400 Finder guides across topics including:
A secured credit card requires a security deposit, typically a cash deposit. Other than the deposit, secured credit cards work the same as regular credit cards.
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