Apply now at Capital Bank's secure site. Cost of Membership 2. APR 4. Features 0. The annual fee and APR are lower than many secured card offerings. Bottom Line This card is in line with other secured cards in terms of its lack of rewards and any significant perks, but its reasonable APR and low annual fee are better than most.
No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone. Build credit quickly.
OpenSky reports to all 3 major credit bureaus. 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. Apply now at Applied Bank's secure site. Regular APR 9.
Why we like this card If you suspect you may occasionally carry a balance while working to build up credit, this card offers a low fixed APR of 9. Pros This card reports you credit behavior to the three major credit bureaus: Experian, Equifax and TransUnion This card requires no minimum score or credit check to apply.
Bottom Line For credit-builders who think they may carry a balance from time to time, this card offers a low fixed APR of 9. Better than Prepaid Go with a Secured Card! Apply now at Citi's secure site. Ease of Building Credit 3. Features 1. Why we like this card Even by secured card standards, the Citi Secured Mastercard is pared down. Pros This card charges no annual fee. After 18 months of responsible use, Citi may review your account and return your deposit.
Cons The This card offers no rewards. Unlike a debit card, it helps build your credit history with monthly reporting to all 3 major credit bureaus. Once available, you will also have free access to your FICO score online.
A security deposit is required. Get help staying on track with Auto Pay and account alerts. With Flexible Payment Due Dates, you can choose any available due date in the beginning, middle or end of the month. Citi Flex Plan offers are made available at Citi's discretion. Apply now at Synovus Bank's secure site. Why we like this card As a Mastercard, the First Progress Platinum Elite will be accepted just about everywhere, making it an ideal choice for travelers.
Pros Expedited processing is available to those who are eager to get their card as quickly as possible. This card offers minimal perks and no rewards. Get a fresh start! A discharged bankruptcy still in your credit bureau file will not cause you to be declined.
Back to top. On this page Our top picks Secured credit card details What are secured cards? Capital One Quicksilver Secured Cash Rewards Credit Card: Best for flat-rate rewards Overview : This new credit card from Capital One combines consumer-friendly terms, like no annual fee and no foreign transaction fees, with unlimited 1. Pros :There is no annual fee which is always a plus.
Self — Credit Builder Account: Best secured product for getting a small loan Overview :With this financial product, you basically get a small loan that funds an FDIC-insured certificate of deposit for 12 or for 24 months. Research Methodology Methodology :We analyzed secured cards to identify the top products available for consumers.
We looked for options that will report your good habits, make it easy to track your score and more. Credit needed :Accessibility is a key selling point for secured cards, so we made sure to find the best choices that allow for all ranges of credit scores.
Even if you have no credit history whatsoever, there are secured cards here that can help. Rates and fees : Some cards designed for poor credit scores feature penalizing fees and unfairly high rates. We avoided these as much as possible when selecting our top secured cards. What are secured cards? How do secured cards work? Pros and cons of secured cards Pros of secured cards Grow your credit score.
A secured card gives you the opportunity to establish your score with regular reporting to credit bureaus, a key step in boosting your credit as long as you make regular payments. Get into the right habits. Aside from the initial deposit, most secured cards work just like a traditional credit card. Using a secured product the right way will set you up for success when it comes time to upgrade to a better-tier card.
Generous acceptance. One benefit of secured cards is that the down payment allows most providers to accept almost anyone as a cardholder. Those who have suffered from bankruptcy or other financial woes have a tool to regain their credit with secured cards. Cons of secured cards Money needed up front. It might be difficult to come up with the deposit needed to start your secured card account.
High fees and rates. As these are cards for those with bad credit, many secured options have high APRs and fees. Lack of rewards. Unfortunately, secured cards are no different. How to get a secured credit card If your financial institution offers secured credit cards, you may be able to submit an application in person, by telephone, or through its website.
In most cases, your deposit amount will be equal to your credit limit. Apply : Submit your application. The issuer will ask you to provide personal details to confirm your identity such as your Social Security number, income, U.
Monitor application status : In most cases, the card issuer will reach a decision in a matter of seconds. Sometimes you may have to wait to receive a decision by mail. Many card issuers also allow you to check the status of the application by telephone or by logging on to their website. What credit score do you need to be approved for a secured credit card? To give you a better sense of what constitutes good, fair and bad credit, FICO goes by the following range: Very poor : to Fair : to Good : to Very good : to Exceptional : to Factors to consider when choosing a secured credit card Your choice in credit card should be based on your personal goals and finances.
Heads up that secured cards can have the most fees. Interest charges can pretty quickly overtake the principal when the rates are steep. While rewards are a nice perk, your goal with a secured credit card is building credit, so you want to pick a card with features that help you do so without charging too many fees.
To start, there are only two fees — a cash advance fee and a late payment fee. What makes this card advantageous to the credit-builder, though, is this feature: As your credit score increases with responsible use, so can your credit limit.
You may even qualify for a limit that is higher than your security deposit, which is very uncommon among secured cards. Who should get a secured card The new credit user. If you have no credit history, the selection of credit cards in your range might be slim.
Luckily, most secured cards let you get started and give you the chance to establish your credit score and learn the necessary habits, like on-time payments and mindful spending. The inexperienced cardholder. The credit re-builder. Some cards come free from a credit check or minimum score to apply, giving people routes to rebuild no matter their past credit history. Who should skip a secured card The high spender. The established cardholder.
If you have a good or even fair credit score , you might be better off with one of the traditional cards in your range. The benefits and terms of some top secured cards outshine their competitors. The rewards chaser. Though you can find solid cash back and specialized rewards with secured credit products, anyone looking for substantial rewards should look to more valuable options.
How to use your secured card to build credit Now that you understand how secured credit cards work, how do you handle one correctly? Before the issuer will open your account, you have to pay your security deposit.
In some cases, you must provide bank account information with your application so the deposit can be transferred right away. Other times, the issuer will give you some time to pull together the deposit. If you neglect to fund the deposit , the issuer will change the status of your application from approved to rejected.
You receive the card. Once your deposit is funded, the issuer will send you your card. You can then use it just like any other credit card. Use it for a few small purchases each month and pay them off promptly. You get your bill and pay it each month. Because secured cards tend to charge very high interest rates, it's best to pay your bill in full every month to avoid finance charges. The issuer reports your payments to the credit bureaus, which helps you build credit.
You upgrade. As your credit moves from bad to average to good, you'll be in a position to qualify for better cards:. Some issuers automatically review your account for potential upgrade to an unsecured card. When your issuer moves you to an unsecured card, you get your deposit back. With other issuers, you may have to specifically request an upgrade. That might mean converting your secured account to unsecured or closing your secured card and opening a new unsecured account.
Either way, you get your deposit back. If your issuer can't or won't upgrade you — and keep in mind that not all secured-card issuers even offer unsecured cards — you can apply for unsecured cards separately. Eventually you'll want to close the secured card to recoup your deposit. Several issuers specialize in unsecured credit cards for people with bad credit, but NerdWallet generally doesn't recommend them.
And unlike the deposit on a secured card, those fees are money you can't get back. Our roundup of the best and worst cards for bad credit has more information on cards to avoid. Prepaid debit cards offer convenience and are a safer alternative than carrying cash, but they don't help you build credit. With a prepaid debit card, you "load" money onto the card, and the purchases you make are paid for with that money.
Since you're not borrowing money, there's no effect on your credit score. See NerdWallet's best prepaid cards. Offered mostly by smaller financial institutions, such as credit unions and community banks, these loans are designed to help you build a good payment history.
The money you "borrow" isn't actually given directly to you. Instead, it's held on your behalf in a savings account while you repay the loan in monthly installments. Once you're done, the money is released to you — and your credit report shows a paid-off loan. Learn more about credit-builder loans. These loans can be secured or unsecured. Unsecured loans those without collateral, such as a car title generally have higher interest rates than secured loans.
The better your credit, the lower your rate is likely to be. Conversely, those with bad credit can expect to pay very high rates , if they can get a loan at all. Learn more about personal loans. NerdWallet's Credit Cards team selects the best secured credit cards based on overall value, as evidenced by star ratings, as well as suitability for specific kinds of consumers.
Factors in our evaluation include annual and other fees, security deposits both the minimum required and maximum allowed , APRs, whether a card offers an option to upgrade to an unsecured account, the availability of free credit scores and other credit education, reporting to credit bureaus, and other noteworthy features such as a rewards program or the ability to qualify without a credit check.
Secured credit cards require a cash security deposit, while regular "unsecured" cards do not. The deposit is there to protect the issuer in case you don't pay your bill. Because secured credit cards pose less risk to the issuer, they are generally easier to qualify for. See the chart of deposit requirements above.
A secured credit card is different from a prepaid debit card that you "load" with money. With prepid debit, you put money on the card, and then you spend that money when you make purchases. A secured card works just like a regular credit card: You make purchases with the card, and then you pay them off later. The deposit comes into play only if you don't make your payments. In that case, the issuer can use it to pay your debt.
In most cases, your credit limit will be equal to your security deposit. It depends on the card. With some cards, you can increase your credit limit just by depositing more money. With others, you must apply for an increase. Some cards will automatically consider you for a credit line increase if you use the card responsibly for a while — not going over your limit and paying your bill on time every month. Also depending on the card, you might be able to get a higher credit line without depositing more money.
Yes, when you close your account in good standing meaning you've paid off your balance or when you upgrade to an unsecured card from the same issuer, your security deposit will be returned to you. There are excellent options that don't charge an annual fee, including several on this page. If you want a card that won't require a credit check or that charges an extra-low interest rate, you're more likely to pay an annual fee.
Credit card issuers set interest rates according to risk: The higher the risk, the higher the rate. Since secured cards are designed for people building or rebuilding credit, they usually charge higher rates than "regular" cards.
Keep in mind that if you don't carry a balance from month to month — that is, if you pay your balance in full every time — then your interest rate doesn't really matter because you don't get charged interest. Even though the risk is lower, issuers of secured cards still have eligibility criteria. For example, you'll need to be able to pay your bill each month, so your application could be rejected if you don't have a job or if you have only a small income. If you have filed for bankruptcy and the case is still pending meaning a court could wipe out any debt you put on a new card , you could be rejected.
Some secured cards are designed only for people new to credit, rather than those with bad credit, so you could be rejected based on negative information on your credit report.
Use it to build your credit! Make small purchases with it regularly, and then pay those purchases off in full every month to avoid paying interest.
Ideally, you won't have this card forever. It's a tool you use to demonstrate to lenders that you can handle credit responsibly. While we don't recommend carrying a balance month-to-month especially when you're trying to build or rebuild credit , it can be a good idea to choose a low interest secured card if you have a history of carrying balances or you're looking for a safety net. But it does come with some additional perks, including travel insurance, auto rental collision damage waiver and extended warranty protection.
If you're a frequent traveler, you might want to consider a secured card that offers travel-centric perks and no fees on purchases made outside the U. Cardholders can also benefit from earning 1 Flexpoint per dollar spent on all purchases. This is a nice perk considering secured cards rarely have rewards programs. You can redeem rewards in a variety of ways: travel, event tickets, merchandise, gift cards and charity donations. This card also comes with select travel benefits, such as travel and emergency assistance services, lost luggage reimbursement and auto rental collision damage waiver — which further enhance the Savings Secured Visa Platinum card's appeal for travelers.
Since this card is issued by a credit union, membership is required. Anyone can qualify in one of four ways: through the Department of State, an affiliation with select organizations, a relationship with a current member or by joining the American Consumer Council ACC. Unlike some other credit unions on this list, there's no cost to join the ACC.
To determine which secured cards offer the best value for a range of consumers, Select analyzed the 22 most popular secured credit cards offered by the biggest banks, financial companies and credit unions that allow anyone to join. We compared each card on a range of features, including: annual fee, minimum security deposit, credit limit, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit score and customer reviews when available.
We also took into account how easy it is to upgrade the card from secured to unsecured and how quickly you can get your security deposit back. Because it's unusual for secured credit cards to have robust rewards programs, we did not analyze how many rewards points you can earn in the first year. For cardholders who are looking to rebuild credit, it's more important to practice good credit card habits — spending within your means, paying your balance on time and in full — than try to optimize your points balance.
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