Best Secured Credit Cards

Jason Steele

Updated February 15, 2022

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.

For people with bad credit, secured credit cards can be a helpful way to rebuild credit while also offering them a secure and convenient method of payment. Secured cards differ from other credit cards because they require the cardholder to pay a refundable security deposit, which typically becomes the amount of the card’s credit limit. Other than the security deposit and credit limit, secured credit cards work essentially the same way as any other credit card. Secured card users receive a statement every month and must make a monthly payment. Also, the physical card is indistinguishable from other cards, so when you use your card to make a payment, no one will know that you aren’t using a standard credit card. Secured cards are often less expensive than the unsecured credit cards that are available to people with bad credit, which invariably have very high, nonrefundable fees. Another benefit of most secured cards is that the issuers report your balance and payment history to the three major consumer credit bureaus: Equifax, Experian, and TransUnion. So if you’re using your card responsibly, it may help build your credit. Once your credit improves, your card issuer may allow you to move from a secured card to an unsecured card without closing your original line of credit. In fact, many secured card users find that after just a year of responsible use, they’re able to qualify for a standard, unsecured card. When that happens, they can close their secured card account and receive a refund of their deposit. Beyond building credit, there are other features for the best secured credit cards that may hold different value for different people. Whether you want to pay a smaller deposit, earn cash back or potentially get a high credit limit, there’s a secured card out there for you.

How We Chose the Best Secured Credit Cards

To find the top secured credit cards, we first divided the market into the following six categories:

Best secured cards requiring a smaller deposit
Best secured cards earning flat rate cash back
Best small business secured cards
Best secured cards for first year rewards
Best high potential credit limit secured cards
Best simple secured cards

Then, we looked at more than a dozen major card issuers and credit unions to find the top cards in each of these subcategories. We included only cards that are available to all applicants, leaving out products offered by credit unions that not everyone can join. Since secured credit cards tend to be most appealing to applicants with poor or limited credit, the best secured cards don’t have an annual fee. And for each category, we looked at the most relevant factors. For example, the top secured small business card needs to have a large credit limit for business purchases, while the best secured cards for rewards must offer the most value for your spending. While credit card terms may change from time to time, the following rankings reflect information that was accurate in January 2022.

Best Secured Cards Requiring a Smaller Deposit

Most secured cards require a security deposit of at least $200. But if you don’t have enough spare cash for that, a secured card with a smaller deposit minimum may be right for you. When we were looking at top secured cards requiring a smaller deposit, the amount of the deposit was obviously the most important factor, but we also wanted a full featured card from a reputable card issuer.

If You Want a Secured Card Requiring a Smaller Deposit: Capital One Platinum Secured Credit Card

If you don’t have a lot of extra cash, putting down a smaller than average deposit on a secured card may be helpful. With the Capital One Platinum Secured Credit Card, you may be able to put down a refundable security deposit starting at only $49 or $99 and still get a $200 initial credit line. (However, depending on your credit score, you might still have to make a $200 deposit.) After making on-time payments, cardholders may be able to earn back their security deposit as a statement credit. Cardholders will also be automatically considered for a higher credit line in as little as six months with no additional deposit needed. The variable APR for this card is 26.99% and there’s no balance transfer option. The card is open to applicants with limited or bad credit, and there’s no annual fee for this card.

Best Secured Cards Earning Flat Rate Cash Back

Applicants used to have to forgo cash back rewards with a secured card, but now there are a few secured credit cards that do earn cash back. When choosing the top secured cards for earning cash back, we looked for a simple but effective earning structure, while balancing the other features that a cardholder would want from a secured card.

If You Want a Secured Card for Earning Flat Rate Cash Back: Bank of America® Unlimited Cash Rewards Secured

The Bank of America Unlimited Cash Rewards Secured card has one of the most generous earning rates for a secured card. Cardholders earn an unlimited 1.5% cash back on all purchases. A minimum refundable security deposit of $300 (up to a maximum of $4,900) is required to open the account. The maximum credit limit will be determined by the amount of the security deposit, income, and ability to pay the credit line established. As a cardholder, your account will be reviewed periodically to determine if you qualify to have your security deposit returned. Qualification for that is based on your overall credit history, including your account and overall relationship with Bank of America, as well as other credit cards and loans. Not all customers will qualify to have their security deposits returned. There’s a 23.99% APR with this card, and balance transfers are allowed with a fee of 3% of each transaction and a minimum of $10. There’s no annual fee for this card.

Best Secured Cards for Small Business Use

Individuals aren’t the only ones who could benefit from a secured card. Small business owners may want to take advantage of these offers as well. While there aren’t too many secured credit cards available specifically for small businesses owners, we looked through for one with a large credit line for business purchases as well as bonus features for small businesses.

If You Want a Secured Card for Small Business Use: Wells Fargo Business Secured Card

The Wells Fargo Business Secured Credit Card is a top choice for businesses with little to no business credit history or with past credit challenges. The card offers small business owners a credit line between $500 and $25,000, based on the amount of the security deposit. Small business owners who use the card responsibly over a period of time may be eligible to upgrade to an unsecured business credit card. Small business owners can choose to earn either cash back or points with this card. If you opt for cash back, the card will earn an unlimited 1.5% cash back on new purchases. Cash back will be credited to your account or to your eligible checking or savings account each quarter. With points, the card will earn 1 point on every $1 spent, plus 1,000 bonus points every billing cycle when you spend at least $1,000 on qualifying purchases. Points can be redeemed for things like gift cards, merchandise, and airline tickets, plus get a 10% points credit when you redeem your points online. Small business owners can add up to 10 employee cards, and there’s no annual fee for this card.

Best Secured Cards for First Year Rewards

Since secured cards are most useful for building, restoring, or establishing credit, it may not be necessary to hold them for a long period of time. That’s one reason that a top secured card that maximizes your first year rewards may be important to you. When we were looking at top secured cards for first year rewards, the first year rewards had to be much better than normal offerings on other cards, but it was also important that the card have valuable features and benefits and that it was issued by a reputable card issuer.

If You Want a Secured Card for First Year Rewards: Discover it® Secured Card

The Discover it Secured card is a top card for first year rewards, and it has a solid earning rate as well. The card has a refundable security deposit starting at $200. After eight months, you may automatically qualify to convert to an unsecured card and get your deposit back. The card also earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and an unlimited 1% cash back on all other purchases. With the card’s Cashback Match feature, you get an automatic unlimited dollar-for-dollar match for all the cash back you've earned at the end of your first year, making it easy to earn substantial rewards during your account’s first year. This card has a 22.99% standard APR, but a 10.99% introductory APR offer for 6 months for balance transfers that post to your account by April 10, 2022. There’s no annual fee for this card.

Best Secured Cards With a High Potential Credit Limit

Most secured cards have a small potential credit limit. But if you tend to make large purchases, then you may want to look for a secured card with high potential credit limits. Just keep in mind that to utilize a secured card’s high potential credit limits, you also probably have to make an equally high security deposit. When we were looking for the top secured cards with high potential credit limits, the credit limit was obviously the most important factor, but we also considered extra features.

If You Want a Secured Card With a High Potential Credit Limit: US Bank Secured Visa® Card

With the U.S. Bank Secured Visa Card, your credit line is the same amount as your deposit, which can be up to $5,000. The deposit must be at least $300 and must be in hundred-dollar increments. This card also offers 5% cash back in combined eligible purchases each quarter in two categories you choose, and 2% cash back on eligible purchases in your choice of one everyday category (like gas stations, grocery stores, or restaurants). It has a 23.99% standard APR and a 3% or $5 minimum balance transfer fee, whichever is greater. There’s no annual fee for this card.

Best Simple Secured Cards

If you’re looking for a secured credit card, you may not need any bells or whistles. Sometimes, you just want a basic secured card without rewards that can encourage you to overspend or incur debt. For the top simple secured cards, we looked for cards with a credit limit that matched the security deposit for ease of use. Keep in mind that simplicity also means that these cards don’t offer rewards and may not include other benefits that similar cards might offer.

If You Want a Simple Secured Card: BankAmericard® Secured Credit Card

The BankAmericard Secured Credit Card is a straightforward secured card from a major bank that doesn’t offer any rewards or special features. A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account. Your maximum credit limit will be determined by the amount of the security deposit you provide, your income, and your ability to pay the credit line established. Your account will be reviewed periodically to see if you qualify to have your security deposit returned. This card has a 22.99% APR and a balance transfer fee of 3% of each transaction, with a $10 minimum. There’s no annual fee for this card.

The Takeaway

Building credit through secured credit cards can help you build up a positive credit history for when you’re trying to apply for a mortgage, car loan, apartment, or any other type of credit. By making timely payments and avoiding debt, you may be able to build or rebuild your credit more quickly and easily than you might have thought. When you’re looking for a secured credit card, Lantern by SoFi can help. See multiple credit-building credit card options from our network of lending partners.

Photo credit: iStock/gece33Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit (https://www.consumer.ftc.gov/topics/credit-and-loans)The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC0821160

About the Author

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.

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