What Is a Secured Credit Card & Who Should Use One?
If you’re looking to build or rebuild your credit, a secured credit card might be your best first step. Unlike traditional credit cards, secured cards require a refundable security deposit, which typically becomes your credit limit. This makes them accessible to individuals with poor, limited, or no credit history.
Secured cards are designed for:
- New credit users (especially Gen Z)
- Immigrants and newcomers with no credit history
- People rebuilding after a financial setback
- Young professionals and students
They’re safer for both the lender and the borrower. You can’t overspend beyond your deposit, and your payment behavior gets reported to credit bureaus, helping you establish or improve your credit score over time.
They’re also a smart tool if you want to demonstrate financial responsibility over time before moving into more complex credit products such as unsecured credit cards, auto loans, or even mortgages. The structured approach they offer — starting with your own money as collateral can instill strong credit habits from day one.
How Secured Credit Cards Help You Build Credit
Secured credit cards help build credit in a few key ways:
- Payment History: Your on-time payments are reported to major credit bureaus (Equifax, TransUnion, Experian), building your reputation as a responsible borrower. Payment history makes up 35% of your credit score, making this the single most important factor.
- Credit Utilization: Keeping your balance below 30% of your limit shows discipline and control. It also ensures that your revolving credit ratio — a key part of your score — stays favorable.
- Credit Mix & Length: Over time, your secured card adds diversity and longevity to your credit profile, especially when paired with other types of credit like student loans or installment loans.
Most importantly, many secured credit cards allow you to graduate to an unsecured card after 6–12 months of responsible use, a great way to unlock higher limits and better benefits.
If you’re consistent and intentional, you can go from zero to 700+ credit score territory in as little as one year using a secured card paired with healthy credit habits.
Best Secured Credit Cards in the United States (US)
Choosing a secured credit card in the U.S. comes with a wide variety of options tailored to different needs. Whether you want cash back, flexible deposits, or just a basic builder card, the following options are top-rated in 2025.
| Card | Deposit | Annual Fee | Reports To | Unique Perk |
|---|---|---|---|---|
| Discover It Secured | $200+ | $0 | All 3 bureaus | 2% cashback at gas & restaurants; automatic upgrade review after 7 months |
| Capital One Platinum Secured | $49–$200 | $0 | All 3 bureaus | Variable deposit based on creditworthiness |
| Chime Credit Builder | $0 | $0 | All 3 bureaus | No interest, no fees, flexible pay-as-you-go funding |
Discover It Secured
One of the best beginner-friendly cards in the US. Offers cashback rewards, free FICO score tracking, and automatic reviews for upgrade eligibility. It also waives your first late payment fee and provides fraud protection perks rarely seen with secured cards.
Capital One Platinum Secured
A flexible option that allows low deposits as low as $49 for a $200 limit. Good for those who might not have a lot of cash up front. Capital One also offers a robust app for mobile management, helping users stay on top of payments.
Chime Credit Builder Card
No credit check, no fees, and no interest. Ideal for those who want total control. You fund it as you go with your Chime account, great for beginners. Because there’s no preset limit and your spending is limited by what you move into the secured account, it virtually eliminates the chance of missing a payment.
Other notable mentions in the US include:
- OpenSky Secured Visa — No credit check, $200 deposit
- Self Credit Builder Card — Combines a secured card with a credit builder loan
Best Secured Credit Cards in Canada
Canada’s secured credit card ecosystem is growing, with several traditional banks and fintech companies offering reliable solutions for beginners.
| Card | Deposit | Annual Fee | Reports To | Unique Perk |
| KOHO Credit Builder | $10/month | No deposit | Equifax | Subscription model; helps build credit passively |
| Home Trust Secured Visa | $500+ | $59/year | Equifax, TransUnion | Simple approval, steady reporting |
| Neo Secured Mastercard | $50+ | $0–$99 | Equifax | Cashback, customizable perks, modern interface |
KOHO Credit Builder
A fintech twist on secured credit, it doesn’t require a large deposit, just a $10/month subscription. Reports positive activity to Equifax and works alongside KOHO’s budgeting tools. This card is especially good for users who prefer not to tie up large sums of money in a deposit.
Home Trust Secured Visa
Traditional and reliable. Requires a higher deposit but reports to both Equifax and TransUnion. Approval is relatively easy. The simplicity of its structure makes it a popular choice among new immigrants and first-time credit users.
Neo Secured Mastercard
Flexible and designed for tech-savvy users. Choose your fee structure, earn cashback, and build credit with an easy-to-use mobile interface. You can earn rewards on everyday purchases like groceries and transportation, making it feel like a traditional credit card while still being secure.
Other notable options:
- Refresh Financial Secured Card — Ideal for those with poor credit
- Plastk Secured Card — Offers points rewards and credit education tools
Best Secured Credit Cards in the United Kingdom (UK)
Unlike North America, the UK has fewer “true” secured cards. Most beginner-friendly options are credit builder cards without a deposit. These cards are still useful and do report to major credit bureaus, making them effective for building your profile over time.
| Card | Deposit | Annual Fee | Reports To | Unique Perk |
| Tesco Foundation Credit Card | None | £0 | Experian, Equifax | Designed for building credit slowly with low limits |
| Aqua Advance / Classic | None | £0–£120 | All 3 bureaus | Easy to qualify, responsible use leads to lower interest rates |
| Capital One Classic UK | None | £0 | Experian | No deposit, straightforward terms, ideal for first-timers |
Tesco Foundation Credit Card
Built for people with no credit or a thin file. Start with a low limit and work your way up. Tesco also offers educational resources to help you build credit responsibly.
Aqua Advance
One of the most recognized names in UK credit building. Starts with a higher APR but reduces your rate after 6 on-time payments. Great for those who want long-term improvement and don’t mind starting off with stricter repayment terms.
Capital One Classic UK
Great for people new to credit or recovering from a poor credit history. It has a clean reputation, user-friendly terms, and access to the CreditWise score tracking platform.
Also worth checking out:
- Barclaycard Forward — Offers credit limit increases for good behavior
- Vanquis Credit Builder Cards — Tiered structure for credit improvement
What to Look For in a Beginner Secured Credit Card
Before applying, make sure your card checks these boxes:
- Reports to all major credit bureaus (not just one)
- No or low annual fee
- Low deposit requirement (or flexible)
- Option to graduate to an unsecured card
- Mobile app or online account access
- Free credit tracking
- No hidden fees — Watch for setup or monthly maintenance fees
- Positive user reviews — Check Reddit, Trustpilot, and App Store ratings
How to Use a Secured Card the Right Way
Owning a secured card is just the beginning. Here’s how to maximize its credit-building potential:
- Always pay on time — set autopay for at least the minimum.
- Keep utilization low — never spend more than 30% of your credit limit.
- Don’t carry a balance — pay it off in full each month to avoid interest.
- Use it monthly — regular usage + payments = healthy history.
- Track your score using free apps like Credit Karma, ClearScore, or CreditWise.
- Upgrade when eligible — many cards automatically review your status after 6–12 months.
- Set alerts — Never miss a due date by activating SMS or push alerts.
- Don’t close the card immediately after upgrading — Keeping accounts open helps with credit age.
What If You’re Not Approved?
Sometimes you may not qualify for a secured card right away, especially if you have unstable income or a prior bankruptcy. In that case, try:
- Credit builder loans – Small installment loans designed to build history (e.g., Self, SeedFi)
- Rent reporting apps – Build credit through rent payments (e.g., Boom, Esusu, CreditLadder)
- Become an authorized user – Piggyback on a family member’s credit card account
- Use BNPL wisely – If you must use it, do so strategically and sparingly
- Pay off collections or old accounts – Resolve issues on your credit report to improve approval odds
Final Take: Don’t Just Swipe, Strategize
A secured credit card isn’t just a tool; it’s a stepping stone to financial freedom. Used wisely, it can:
- Help you buy your first car or rent your first apartment
- Lower your future loan interest rates
- Unlock better financial products in under a year
Start small. Be consistent. Let your secured card become your secret weapon.
Your credit journey doesn’t need to be perfect; it just needs to be intentional. Whether you’re recovering from past mistakes or starting from zero, the right secured credit card can help you gain traction, grow your score, and open doors that once felt closed.
Want to Build Credit With Confidence?
Download Our 90-Day Credit Builder Plan or read: How to Build Credit in Your 20s (Even If You’re Broke)
