Building credit from scratch can feel daunting, but it doesn’t have to be. Secured credit cards are specifically designed to help people with no credit or poor credit establish and build their credit history. With responsible use, a secured card can help you work towards qualifying for an unsecured card and other loans.
In this comprehensive guide, we review the top 10 best secured cards of 2023 based on factors like credit limits, fees, rewards and more. Whether you have no credit history or damaged credit, we help you find the perfect secured card to start building your credit.
How Secured Credit Cards Work
Secured credit cards require an upfront cash deposit that acts as collateral and determines your credit limit. The deposit is typically refundable after you upgrade to an unsecured card or close the account in good standing.
The card issuer reports your payment activity to the major credit bureaus. On-time payments help establish positive payment history, while late payments or non-payments damage your credit. Overall, responsible card use demonstrates creditworthiness and raises your credit score.
Many secured cards offer additional features like rewards, low APRs, and credit limit increases over time. However, avoid cards with expensive fees which diminish your credit building progress.
Benefits of Secured Credit Cards
Secured cards provide easier approval for people with limited or damaged credit who may not qualify for regular unsecured cards. Additional benefits include:
- Establish credit history – Responsible card use builds positive payment history with the credit bureaus. This is key for raising your credit score.
- Improve credit mix – Credit cards complement other types of credit like auto loans and mortgages. A mix of credit types strengthens your credit profile.
- Access revolving credit – Credit cards provide flexible, reusable credit lines for purchases and cash advances. Managing revolving credit responsibly demonstrates financial maturity.
- Lower interest charges – Secured cards generally have lower APRs compared to unsecured options for bad credit. Lower interest charges save money.
- Earn rewards – Many secured cards offer cash back, points or miles that can be redeemed for statement credits, gift cards, travel and more.
- Upgrade path – Timely payments may qualify you for credit limit increases and graduation to an unsecured card. This unlocks higher limits and better rewards potential.
Factors to Consider When Choosing a Secured Credit Card
With many secured card options available, it’s important to compare cards across these key factors:
- Credit limits – Higher maximum limits allow you to utilize more credit and build history faster. Limits ranging from $200 to $5,000 or more are common.
- Upgradability – Most secured cards offer unsecured upgrade options after several months or years of on-time payments. This is the ultimate goal.
- Fees – Avoid expensive monthly or annual fees. Opt for low or no fees to maximize your credit building.
- APR – Lower interest rates minimize expensive revolving balances. Rates range from 17% on up.
- Rewards – Cash back and travel points allow you to earn value from everyday spending.
- Cardholder perks – Look for additional features like purchase protections, rental car insurance, extended warranties and more.
- Credit bureau reporting – Ensure the card reports your payment activity to all three major credit bureaus – Experian, Equifax and TransUnion.
Using these criteria, let’s explore the top secured card options for establishing and building credit from scratch.
1. Discover it® Secured Credit Card
The Discover it® Secured card tops our list for its market-leading combination of cash back rewards, credit limit, upgrade option, and other cardholder benefits.
Credit Limit
- Minimum $200 deposit
- High maximum limit up to $2,500 deposit
Fees
- $0 annual fee
- No monthly fees
APR
- Variable 14.24% – 23.24%
Rewards
- 2% cash back at gas stations and restaurants
- 1% cash back on all other purchases
- Cash back rewards can be redeemed for any amount, unlike most other cards
Key Perks
- Reports to all three credit bureaus
- Automatic monthly FICO score updates on your statement
- Match your cash back after first year
- $0 fraud liability protection
- No late fee for first late payment
With valuable cash back rewards, useful credit tools, and great upgrade options after 8 months of on-time payments, the Discover it® Secured card is our top choice overall.
2. Capital One Platinum Secured Credit Card
Offering a high potential credit limit and no annual fee, the Capital One Platinum Secured is a straightforward, affordable option.
Credit Limit
- Minimum $49, $99 or $200 deposit
- High maximum limit based on your creditworthiness
Fees
- $0 annual fee
- No monthly fees
APR
- 26.99% Variable
Rewards
- None
Key Perks
- Reports to all three credit bureaus
- CreditWise tool provides free credit monitoring
- Auto-graduation to unsecured after 5 months of on-time payments
- Low foreign transaction fees
The Platinum Secured requires less deposit than some competitors and is upgraded to the unsecured Platinum after timely payments. With no rewards, it’s best for focusing strictly on credit building.
3. Citi Secured Mastercard
This no-annual-fee card from Citi provides opportunity to graduate to an unsecured card in as little as 18 months.
Credit Limit
- Minimum $200 deposit
- Maximum $2,500 deposit
Fees
- $0 annual fee
- No monthly fees
APR
- 22.24% Variable
Rewards
- None
Key Perks
- Reports to all three credit bureaus
- Opportunity to upgrade after 18 months of timely payments
- Extended two-year warranty protection
- $0 fraud liability
With the potential for an unsecured upgrade in under two years, the Citi Secured Mastercard can help transition your credit to unsecured fairly quickly. Just keep balances low and payments on time.
4. Bank of America® Customized Cash Secured Credit Card
The Customized Cash Secured Card is a rare secured card that offers cash back rewards. Bank of America also provides a 3% balance transfer offer for the first 90 days.
Credit limit
- Minimum $300 deposit
- Maximum $4,900 deposit
Fees
- $0 monthly fee
- $25 annual fee
APR
- 22.24% Variable
Rewards
- 3% cash back category of your choice
- 2% at grocery stores and wholesale clubs
- 1% on other purchases
Key perks
- Cash rewards don’t expire and can be redeemed any time
- Qualify for unsecured card after 1 year of responsible use
- Balance transfer offer for new purchases
- Car rental insurance
With category bonuses and no limit on cash back redemptions, this card allows you to earn while rebuilding your credit. The $25 annual fee is offset by the rewards.
5. Surge Mastercard
Issued by Celtic Bank, the Surge Mastercard stands out for its lack of fees and cash back rewards.
Credit limit
- Minimum $200 deposit
- Maximum $2,000 deposit
Fees
- No annual fee
- No monthly fees
APR
- 24.99% Variable
Rewards
- 1% cash back on all purchases
- No limit on rewards redemptions
Key perks
- Reports to all three credit bureaus
- Unsecured upgrade available after 7 months
- Free access to Vantage credit score
- Extended warranty protection
- Cell phone insurance eligible after paying monthly bill with card
With an easy upgrade timeline, the Surge Mastercard helps transition your credit from secured to unsecured. The 1% cash back across all purchases is rare for a fee-free secured card.
6. First Progress Platinum Prestige Mastercard
Offering credit limits up to $2,000 and no annual fee, this is among the more accessible secured card options to start building a positive history.
Credit limit
- Minimum $200 deposit
- Maximum $2,000 deposit
Fees
- $0 annual fee
- No application fees
APR
- 19.99% Variable
Rewards
- None
Key perks
- Reports to all three credit bureaus
- Low APR compared to many competitors
- Free online credit education modules
- Fraud liability protection
- Card use monitoring alerts
As a student card, the Platinum Prestige helps young applicants build credit. With no rewards and a relatively low maximum limit, it works best as a supplemental card.
7. Merrick Bank Secured Visa® Credit Card
Merrick Bank offers high credit limits with the opportunity to graduate to an unsecured line. The card does have an annual fee.
Credit limit
- Minimum $200 deposit
- Maximum $3,000 deposit
Fees
- $36 annual fee
- No monthly fees
APR
- 17.95% Fixed
Rewards
- None
Key perks
- Reports to all three credit bureaus
- Low fixed APR
- Upgrade to unsecured line after 18 months
- Free FICO score monthly
- $0 fraud liability
With its high limit and upgrade options, this card can help build significant credit. But the annual fee is a drawback relative to fee-free competitors.
8. Credit One Bank Platinum Visa
Credit One offers an easy to obtain platinum card with cash back rewards and no annual fee. But there are other fees to watch out for.
Credit limit
- Minimum $200 deposit
- Maximum $1,000 deposit
Fees
- No annual fee
- Monthly servicing fee up to $7.50
- Transaction fees for some options like balance transfers
APR
- 23.24% Variable
Rewards
- 1% cash back on qualifying purchases
Key perks
- Reports to TransUnion and Experian
- Rewards don’t expire
- Shopping discounts and dining perks
- Rental car insurance
- Required security deposit refundable after 181 days of responsible use
Avoiding the monthly servicing and transaction fees is key to maximizing your credit building with this card. The rewards can offset some of the costs.
9. OpenSky® Secured Visa® Credit Card
With flexible credit limits and no credit check for approval, the OpenSky Secured Visa® is easy to get. But it lacks rewards and has a short track record.
Credit limit
- Minimum $200 deposit
- No maximum limit
Fees
- $35 annual fee
- No monthly fees
APR
- 19.14% Variable
Rewards
- None
Key perks
- No credit check approval
- Reports to all three credit bureaus
- Upgrade to unsecured card available
- Purchase protections
OpenSky offers a useful option if you can’t qualify elsewhere due to poor credit. But the high annual fee reduces overall value. Check other cards first if possible.
10. Wells Fargo Secured Credit Card
Wells Fargo offers a no-annual-fee secured card with Visa benefits and cell phone protection. The $25 minimum security deposit is lower than some competitors.
Credit limit
- Minimum $25 deposit
- Maximum $1,000 deposit
Fees
- No annual fee
- $25 set-up fee
APR
- 22.74% Variable
Rewards
- None
Key perks
- Reports to all three credit bureaus
- Excellent payment history can qualify for unsecured upgrade
- Cell phone insurance if monthly bill paid with card
- Streamlined digital account access
- Zero fraud liability
As a Visa card, the Wells Fargo Secured Credit Card delivers flexibility for purchases and payments. The low minimum deposit makes it among the most accessible secured cards.
Finding the Best Secured Credit Card for Your Needs
When comparing your secured credit card options, keep your specific credit situation and goals in mind.
If your priority is graduating to an unsecured card quickly, opt for a card like the Surge Mastercard or Capital One Platinum with expedited upgrade paths. Just be sure to keep credit utilization low and payment history perfect.
For rebuilding credit from scratch, focus on cards that offer high maximum limits like the Discover it® and Bank of America® options. This allows you to make larger purchases and demonstrate responsible management of higher balances.
Ongoing access to your credit score and profile details is also helpful. Cards like Discover provide monthly FICO updates that empower you to track your credit building progress.
Finally, consider whether you want to earn rewards like cashback as you rebuild credit. The Discover it® and other options allow you to offset fees and earn value. Just don’t let rewards incentives lead you to overspend and negate your credit building progress.
6 FAQs about Rebuilding Credit with Secured Cards
1. How long does it take to build credit with a secured card?
Expect your FICO score to begin improving after just one to three months of responsible card use. However, optimal credit building takes six months to a year of timely payments, low balances, and limiting hard credit inquiries.
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2. Does a secured card help build credit?
Yes, responsible use of a secured card effectively builds your credit profile. The card reports your payment history, and keeping balances low demonstrates you can manage credit. Ongoing on-time payments help improve your score.
3. Is a secured credit card better than a prepaid card?
Absolutely. Prepaid cards don’t help build credit since there’s no issuing bank extending credit. Secured card issuers report to credit bureaus, so good payment history boosts your credit score.
4. What credit score is needed for a secured credit card?
Most secured cards don’t require a minimum score. They use your security deposit instead of your creditworthiness for the limit. Even applicants with no credit or very poor scores can qualify.
5. Can a secured credit card become unsecured?
Many secured cards allow you to upgrade to an unsecured card after several months or years of on-time payments. You’ll get your security deposit back, enjoy a higher limit, and qualify for better rewards.
6. Is Discover secured credit card a good choice?
Yes, the Discover it® Secured Card is one of the best secured options. It offers cash back rewards, useful credit tools, high limits, and upgrades to an unsecured card in as little as eight months for responsible users.
Start Building Credit with a Secured Card that Suits You
As this guide outlines, secured credit cards tailored for bad credit provide an effective way to establish and strengthen your credit profile. Benefits like rewards and fee waivers on the best secured card options allow you to maximize your credit building value.
Focus on maintaining on-time payments, low utilization, and limiting hard inquiries. With secured card responsibility over time, you can graduate to unsecured credit, qualify for loans with better rates, and unlock better financial opportunities.
The key is choosing a secured card that best fits your needs and using it prudently. So review your top options closely, choose a card that aligns with your spending and credit building goals, and start establishing your financial future today.
