Top Three Secured Credit Cards
If your applications for credit cards are routinely denied because of a low or non-existent credit score, try applying for a secured credit card. These cards require you to make a deposit with the card issuer or to set aside a security deposit in...
If your applications for credit cards are routinely denied because of a low or non-existent credit score, try applying for a secured credit card. These cards require you to make a deposit with the card issuer or to set aside a security deposit in an account at the issuing bank/credit union. The deposit serves as collateral for the card issuer, thereby ensuring that you meet your minimum payment obligations each month. Your credit line equals the amount you must keep on deposit.
Naturally, you will prefer secured credit cards that charge a lower APR, low or no annual fees and no application fee. Also, look for these features:
- Reported Activity. Verify that the issuer will update your credit record with the three major credit bureaus every month. After all, part of the reason for getting a secured credit card is to rebuild your credit score, so you want your timely payments to be reflected in your credit report.
- Access to Unsecured Card. Some issuers may allow you to apply for an unsecured card after 6 to 12 months of spotless payments. Other issuers don’t offer this feature, or make you wait two years or longer. You’d like to move to an unsecured card as soon as possible so that you can free up your security deposit for other uses.
- Other Requirements. Check what other requirements the issuer might impose, such as furnishing two years of tax returns or copies of your pay stubs. You might have to show the issuer how you plan to pay your monthly credit card charges.
Here are our top picks for secured credit cards:
*All three report your credit card activity monthly to the three credit bureaus.
1. Capital One® Secured MasterCard®
Key Benefits: Low required security deposits and no annual fees. With good payment history, you can apply for a credit line increase without additional deposits. Monitor your credit with the FREE Capital One® Credit Tracker app.
2. OpenSky® Secured Visa®
Key Benefits: No credit check necessary. The card features competitive APRs, a low annual fee and free application. You don’t need a checking account to make the security deposit. Quick online application.
2. First Progress Platinum Elite MasterCard®
Key Benefit: Expedited receipt of your new card, which features a low annual fee and competitive APR. Deposits are fully refundable. Higher maximum secured credit lines available.