A secured credit card is just like a regular credit card except it requires a cash deposit that secures your credit line. Most secured cards give you a credit limit equal to your deposit, which means a $300 deposit gets you a $300 credit limit. The security deposit you make is refundable, usually after 12 on-time monthly payments, but not all secured cards are equal. Here are some of the best secured credit cards for bad credit to improve your credit score through responsible credit use.
Capital One Secured Mastercard
The Capital One Secured Mastercard is one of the only secured cards that can be partially secured as a deposit of $49, $99, or $200 can give you an initial $200 credit limit. This card has no annual fee — a hard to find perk with secured cards — and it reports to credit bureaus as an unsecured credit card. This card is available with bad to fair credit.
Discover it Secured Card
The Discover it is one of the most popular rewards cards with 5% cash back on popular rotating spending categories and 1% cash back on everything else. The Discover it secured card comes with the same great rewards program with no annual fee, and the card can be converted to an unsecured credit card after 1 year. The card reports as a secured credit card and you need fair credit to qualify, making it a bit harder to get than the Capital One Secured card.
Wells Fargo Secured Card
The Wells Fargo Secured credit card is designed for people who want to establish or rebuilt credit and it can be upgraded to an unsecured card after one year of responsible credit use. The card requires a deposit of at least $300 to establish your credit limit with a $25 annual fee. Unlike many credit cards, this one is available to foreign nationals and temporary U.S. residents.
USAA Secured Credit Card
If you qualify for USAA membership as a current or former military member or family member, the USAA Secured card is hard to beat. Issued by American Express or Visa, the card has a $35 annual fee with no foreign transactions fees. While the majority of deposits for secured cards earn no interest, the deposit for a USAA secured card is put into an interest-bearing CD that is guaranteed to grow in value. The card also has a low interest rate starting at a variable 10.15%.
BankAmericard Secured Visa
The BankAmericard Secured Visa has a relatively high annual fee of $39 but it can be fully secured or partially secured, which means you may only need to pay a deposit that’s equal to half of your credit limit. Regardless of whether the card is partially or fully secured, a minimum refundable deposit of $300 is required to open your account. If you use the card responsibly for 12 months, your account will be reviewed to have your deposit returned and the card converted to an unsecured credit card.