Fortune Recommends the best secured credit cards

Secured cards are a type of credit card that have a lower barrier to entry because they require the cardholder to pay a security deposit that guarantees their line of credit. Because your lender has a financial cushion to fall back on in case you fail to make payments on your credit card, these credit cards usually have more lenient approval requirements. 

Our take: Users can raise their initial credit line by depositing more than the minimum amount, but only up to $1,000 maximum. For users who are looking for a little more spending power, this card may not be the best option. But, if you use the card responsibly, you could get your deposit back and become eligible to upgrade to an unsecured credit card. 

Capital One Quicksilver Secured Cash Rewards Credit Card

If you want a secured card that earns rewards and lacks hidden fees, the Quicksilver Secured could be for you.

Our take:  Capital One’s Quicksilver Secured Cash Rewards Credit Card carries a steep APR, so it’s important that you be diligent about making on-time payments. The upside: consumers have the opportunity to boost their spending power by making more than the minimum security deposit. Plus, this card doesn’t come with any foreign transaction fees, replacement card fees, or authorized user fees.

Secured Chime Credit Builder Visa^® Credit Card 

The Chime Credit Builder Secured Visa^® Credit Card earned a spot on our list for having no minimum security deposit^**, no annual fee, and no interest APR.*

Our Take: If you’re working on repairing your credit, this card doesn’t have strict approval requirements. In fact, Chime^® doesn’t require a credit check to apply, which means there won’t be a hard inquiry on your credit report. Chime also reports your on-time payments to all three major credit bureaus. 

Bank of America® Customized Cash Rewards Secured Credit Card

Bank of America’s Customized Cash Rewards Secured Credit Card earned a spot on our list for its zero-dollar annual fee, high credit limit, and rewards structure.

Our take: The Customized Cash card gives cardholders the opportunity to choose how you want to earn rewards. You can earn 3% on the category of your choice, 2% cash back at grocery stores and wholesale club purchases, and 1% unlimited cash back on all other purchases. You can also access your FICO® Score for free, which is updated monthly, online or within your mobile banking app. 

BankAmericard® Secured Credit Card

The BankAmericard® Secured Credit Card has one of the highest possible credit limits on our list and doesn’t charge an annual fee.

Our take: You do trade something for the high possible limit: you won’t earn any rewards while using this card, so you won’t get to cash in on extra perks like cashback or rewards points. However, this card does come with other redeeming benefits like overdraft protection, free FICO scores, contactless chip technology, and more. 

Discover It® Secured Card

The Discover It® Secured Card made our list for its zero-dollar annual fee and higher credit limit compared to some of the other credit cards on our list.

Our take: The APR on the Discover it Secured credit card is on the higher end, but it does have an important added perk: a long list of security features. These features include online privacy protection that removes your personal information from websites that may sell your data, free Social Security number (SSN) alerts that will notify you if your SSN is found on the dark web, $0 fraud liability guarantee, and more. 

UNITY Visa® Secured Credit Card

The UNITY secured card has one of the lowest interest rates we surveyed along with the ability to secure one of the highest credit limits.

Our take: The UNITY Visa® Secured Credit Card was the only credit card on our list that charged an annual fee. At $39, it’s still significantly lower than other, unsecured cards, but this is an expense to be aware of nonetheless. However, if you can look past the annual fee, this card offers the highest possible credit limit at $10,000 and a fixed rate APR which means that you get to avoid the uncertainty of fluctuating APRs in a high-inflation environment. 

Credit One Bank® Secured Card

The Credit One Bank® Secured Card took the final spot on our list for its rewards structure and interest-earning security deposit.

Our take: Cardholders can earn 1% cash back on gas and groceries as well as your monthly mobile phone, internet, cable, and satellite TV services. Bonus: your security deposit account also earns a competitive interest rate. This card does have a lower maximum credit limit compared to the other options on our list, but for new-to-credit consumers, this may be an option worth considering.

What to know about secured credit cards 

A secured credit card is a credit card that requires the borrower to pay a deposit upfront to the issuer, which is held as collateral in case the borrower fails to make the monthly payments. In most cases, the security deposit is equal to the borrower’s initial line of credit. If you’re thinking of applying for a secured credit card, you should be aware that because the deposit amount also determines the credit limit, secured cards often have lower credit limits than unsecured cards.

Why might you consider a secured card? Well, you may have an easier time getting approved for a secured card than an unsecured card if you have less than stellar credit or no credit history at all. Lenders use your credit history as the basis for important lending decisions like whether or not to approve your future loan application, rental application, and more. Having access to credit through a secured credit card can help you get back on the right track, improve your score, and eventually qualify for an unsecured card.

Pro tip: If money is tight at the moment, look for a secured credit card with a low minimum deposit requirement. Some cards require $300 or even $500 upfront, while others require just a $200 minimum.

How to choose a secured credit card  

There are many different factors you’ll want to consider when choosing a secured credit card. Some of the key information you should make sure to know about each card includes: 

• APR: If you have a hard time making on-time payments, you’ll want to know how that could impact you as far as interest payments are concerned. A higher APR means that you’ll pay more in interest over time if you carry a balance. 
• Annual fee: Many of the cards on our list do not charge an annual fee, but there are secured cards that do charge an annual fee for added perks or services. Make sure to weigh whether or not this extra cost is worth it to you. 
• Security deposit: Your security deposit is how much you need to pay your issuer at the start. This amount serves as your initial credit limit. While there are cards that offer opportunities to upgrade to an unsecured card or that may offer you a credit limit increase depending on your creditworthiness, it’s important to know how much you’ll need to get started and what that means for your spending power—at least in the short-term. 
• Reporting to credit bureaus: If the purpose of your secured card is to build or repair your credit, it’s crucial that the card and issuer you choose report your payment history to all three major credit reporting agencies (Experian, Equifax, and TransUnion)—that way you can get credit for your positive money habits and improve your credit score. 

Frequently asked questions

Do secured credit cards actually build credit? 

Secured credit cards are easier to qualify for than unsecured credit cards because you are providing your lender with a security deposit. And, most credit card issuers that issue secured cards will report your payment history to the three major credit reporting agencies which may result in a boost to your credit score over time. 

How much should I spend with a $200 credit limit?

Experts recommend that you keep your spending below 30% of your total available credit. If you are approved for a credit card with a $200 limit, you should aim to keep your total spending below $60 to maintain a favorable credit utilization ratio. 

Can opening a secured credit card hurt your credit? 

Yes. Opening a secured credit card can hurt your credit score if the credit card issuer runs a hard inquiry to approve your application. A hard inquiry or “hard pull” means that your credit card issuer wants to look at your credit file before approving your application for a new card. A hard inquiry will remain on your credit report for two years. 

Our methodology

The Fortune Recommends^TM team analyzed 28 secured credit cards across various credit card issuers to come up the top picks available to you. Each card has its own unique eligibility requirements, rates, and fees—approval is dependent on several factors like your credit score and the information in your credit report, and will be determined by your credit card issuer.

Here are the key elements we ranked each credit card by:

• Annual fee (10%): Some financial institutions and credit card issuers require that cardholders pay an annual fee for cards that offer extra features or benefits. We ranked cards with lower or zero annual fee higher on our list.   
• Minimum security deposit (20%): Secured credit cards require that cardholders make a minimum deposit to guarantee their credit line.
• Maximum credit limit (20%): Many secured cards have a maximum credit line for cardholders depending on their security deposit. We rewarded cards with higher maximum deposits.    
• Annual percentage rate (APR) (10%): The APR for a credit card is the yearly cost of borrowing funds from your card issuer. We favored secured cards with lower APRs higher on our list. 
• Maximum late payment fee (10%): Credit cards often charge fees for payments made past the bill’s due date. We penalized credit cards that had a higher maximum late payment fee.  
• Rewards (5%): We awarded 1 point to credit cards that offered some form of rewards such as cash back, rewards points, and miles. 
• Upgrades and credit limit increases (10%): We awarded one point to credit cards that granted credit limit increases to cardholders, the opportunity to upgrade to an unsecured credit card after a certain period of time, or both.  
• Free credit scores and credit education (10%): We awarded one point to credit cards that included educational perks, free access to their credit score, or both. 
• Reporting to credit bureaus (10%): We awarded one point for each credit bureau that our list of individual credit card issuers report information to for a maximum of three points.

---

The Secured Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Chime Checking Account and $200 qualifying direct deposit required to apply for the Secured Chime Credit Builder Visa® Credit Card. See chime.com to learn more.
*Out of network ATM withdrawal fees may apply. See here for details.
**Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

---