secured credit cards

This article was originally published on MoneyMio.com and was written in partnership with MoneyMio.

If you have poor credit, or no credit, you probably already know how difficult it can be to qualify for a new credit card. Fortunately, many companies offer secured cards tailored towards individuals in this situation. And when used responsibly, the top secured credit cards for bad credit can help you build, or rebuild, your credit history and improve your credit score.

That’s because secured cards typically report your credit usage to the three major credit bureaus — Experian, TransUnion and Equifax. And if you pay on time and spend mindfully, these cards can help with your overall credit outlook.

In addition to secured cards, you’ll also find that there are unsecured cards for bad credit available. But secured cards often provide lower fees and interest rates.

Keep in mind that secured cards typically require collateral upfront – a security deposit to help decrease the lender’s risk and help keep costs low on your end.

Here are the six top secured credit cards for bad credit:

1.Best secured card for no credit: OpenSky® Secured Visa® Credit Card

opensky-secured-visaThe OpenSky® Secured Visa card doesn’t require a credit check or a bank account to open. Those two benefits set it apart among secured cards and make it one of the best for those with no, or very low, credit. If you’re interested in establishing or rebuilding credit, this card is worth consideration.


Highlights

  • As mentioned above, there’s no credit check or bank account necessary to open the OpenSky® Secured Visa.
  • Your security deposit determines the size of your credit line with this card, which ranges from $200 to $3,000.
  • The OpenSky® Secured Visa reports to the three major credit bureaus, allowing an easy avenue to establish or rebuild credit.
  • This card has no application fee and you can apply for it online.

Drawbacks

  • The OpenSky® Secured Visa has a $35 annual fee. That’s higher than some other secured cards you’ll find on this list.
  • Some secured cards offer higher credit limits and smaller minimum deposit requirements than the OpenSky®.

Fees, APR and requirements

  • The APR for purchases is a variable 18.14 percent on this card, while the penalty APR is 22 percent. There’s a $35 annual fee with this card.

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2. Best secured credit card for poor credit: primor® Secured Visa Gold Card

primor-secured-gold-visa

The primor® Secured Visa Gold card often competes with the OpenSky® Secured Visa as the best card for no or poor credit. But because it requires opening a personal savings deposit account to secure your credit line, unlike the OpenSky®, it typically works best for those who need a bank account and are working to reestablish credit.


Highlights

  • The primor® Secured Visa Gold offers approval even if you have no credit history or damaged credit. If your monthly income exceeds your monthly expenses by $100 or more, approval is guaranteed.
  • This card offers a credit limit equal to the amount of your savings, from $200 to $5,000.
  • The primor® Gold card reports to all three major credit bureaus, helping to reestablish credit.

Drawbacks

  • The main drawback of this card is the $49 annual fee, which is the steepest on our list and reduces your initial deposit. For example, if you start with $200, your credit limit will be $151.

Fees, APR and requirements

  • Along with its $49 annual fee and 9.99 percent fixed APR for purchases, this card has an additional late fee of $29.

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3. Best low interest secured credit card for bad credit: State Department Federal Credit Union Savings Secured Platinum Visa

SDFCU-visa-platinum

At a fixed 7.74 percent APR, the Savings Secured Visa Platinum currently boasts the lowest interest rate in the secured card category. And as a bonus, it doesn’t require income verification or a credit check. If you think you might need to occasionally carry a balance, this card can help keep your interest payments low.

Highlights

  • The Savings Secured Visa from State Department Federal Credit Union has an APR of 7.74 percent, one of the lowest rates are around among secured cards.
  • The Savings Secured Visa Platinum offers the opportunity to earn Flexpoints Rewards, which you can redeem for travel, event tickets, merchandise, gift cards, charity and other items.
  • Your credit limit with this card is secured by the money in your savings account.
  • There’s no income verification or credit check required with this card.

Drawbacks

  • The major drawback to this card is that State Department Federal Credit Union requires you to join as a member to open a credit account. You can join if you’re an employee of the U.S. Department of State, if you’re employed or affiliated with the credit union’s organization affiliations, if you’re an immediate family member of a member or if you’re a member of the American Consumer Council.

Fees, APR and requirements

  • In addition to the 7.74 percent fixed APR for purchases, this card has a late payment fee of $25 and a minimum interest charge of $0.50. There are no annual fees.

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4. Best low deposit secured credit card for bad credit: Capital One Secured MasterCard

Capital-One-Secured-Mastercard

The Capital One Secured MasterCard is one of the only secured cards that allows you to make a security deposit that’s lower than your credit limit. That makes this a card best for those on a fixed income who can’t pay their security deposit upfront. In fact, this card allows you to pay your security deposit in installments, as long as the full amount is paid within 80 days of approval. If you make the minimum required deposit, based on your creditworthiness, you’ll get an initial credit line of $200.

Highlights

  • This card offers an initial $200 credit line for either a $49, $99 or $200 deposit. The required deposit amount depends on creditworthiness. You can deposit more before the account opens to get a higher limit — up to $3,000.
  • After making your first five monthly payments on time with no initial deposit needed, you can get access to a higher credit line.
  • The CreditWise® program from Capital One is included with this card, which gives you access to your credit score and offers tools to help you monitor your credit.

Drawbacks

  • This card has a 24.99 percent variable APR, higher than the other secured cards on this list. If you often carry a balance, this might not be the card for you.   
  • There are no rewards with this card, something you can find in a variety of other secured cards.

Fees, APR and requirements

  • While the Capital One Secured Mastercard has a relatively high 24.99 percent variable APR, it has no annual fee. The fee for late payments is $35.

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5. Best travel rewards secured credit card for bad credit: AeroMexico Visa® Secured

aeromexico-secured

The AeroMexico Visa® Secured card from Club Premier has one of the top travel rewards programs among secured cards. If you don’t often carry a balance, and you frequently travel to Mexico, this card is worthy of consideration.

Highlights

  • The AeroMexico Visa® Secured card offers one Club Premier mile per $1 spent.
  • You can earn double miles on gas and groceries with this card.
  • If you’re a first-time AeroMexico Visa® Secured card member, you can earn 5,000 bonus miles and a complimentary Companion Certificate to use for a roundtrip ticket from the United States to Mexico or Central or South America.

Drawbacks

  • The main drawback to this card is that its travel perks are limited to one region. If you’re looking to travel outside of Latin America, there are better travel cards out there.

Fees, APR and requirements

  • The AeroMexico Visa® Secured card has a 23.74 percent variable APR, steeper than some of the other secured cards on this list.
  • There’s no annual fee for the first 12 months. After that, the annual fee is $25.

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6. Best cash-back rewards secured credit card for bad credit: Discover it® Secured Card

discover-it-secured-card

In terms of secured cards with cash-back rewards, it’s hard to beat the Discover it®. If you’re interested in building credit while earning cash back on every purchase, and you pay your bills on time, this is card worthy of consideration.

Highlights  

  • You can earn 1 percent cashback on every purchase with the Discover it®. Earn 2 percent cash back at restaurants and gas stations up to $1,000 in combined purchases each quarter.
  • The Discover it® allows you to establish your credit line with an equal deposit of $200 or more. For example, a $200 deposit becomes a $200 credit line.
  • The Discover it® offers an automatic dollar-to-dollar match on any cash back you’ve earned at the end of your first year.
  • This card offers a free FICO Credit Score on monthly statements, Discover’s mobile app or online.

Drawbacks

  • If you typically carry a balance from month-to-month, you’ll pay hefty interest fees with this card. The APR is a variable 23.74 percent for purchases.

Fees, APR and requirements

  • There’s no annual fee, no late fee on your first payment and paying late won’t increase your APR with the Discover it®.
  • The APR on this card is a hefty 23.74 percent.

Apply Now


What is bad credit?

FICO scores (credit scores) range from 300 to 850. According to Experian, a bad credit score is anything that’s 579 and below, while an exceptional credit score is 800 or more.

Used in 90 percent of credit decisions, FICO scores are a good indicator of where your credit stands and how lenders will view you as an applicant. VantageScore is another credit scoring system. You can check your Vantage score for free anytime at Credit Karma .

Here’s a breakdown of credit score ranges:

  • 800+: Exceptional
  • 740 to 799: Very good
  • 670 to 739: Good
  • 580 to 669: Fair
  • 579 and lower: Poor

Quick tips to build and rebuild credit

  • Check your credit report often. By law, you can get a free copy of your credit report every year from each of the three major credit bureaus. See what your credit score is for free at  Credit Karma .
  • To avoid interest charges and keep improving your credit, make sure to pay off your balance in full each month and on time. According to MyFICO, the consumer division of FICO, bills that are paid even a few days late can have a negative impact on your credit.
  • Keep your available credit usage low. Outstanding debt, especially if it’s high, can affect your credit score and have a negative impact, according to MyFICO.
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