If you have bad credit, or are a newcomer to the United States, it can be difficult to build or rebuild your credit rating. It’s a catch-22 of sorts – if you have bad credit, no one will give you credit, and without credit, you can’t start to improve your credit rating (other than allowing time to pass).

This is where secured credit cards come into the picture.

These credit cards are designed specifically for this type of situation, giving people with no or poor credit an easy way to get credit that, when used responsibly, will quickly help to improve their credit scores.

Let’s take a closer look at this important credit building tool, and how it differs from regular, unsecured credit cards.

What is a secured credit card?

A secured credit card is very much like a regular credit card, except you have to give the credit card issuer a deposit before they will send you a card.

The deposit acts as “security” for the issuer, making it possible for people with bad credit to get a credit card.

How do secured credit cards work?

If you are approved for a secured credit card, the issuer will only send you a card after you have sent them a deposit.

This deposit ensures that they won’t lose any money if you fail to pay your credit card bill. The credit card issuer will simply keep the money you owe out of your deposit, and cancel your card.

There is essentially no risk for the issuer, which is why these credit cards can be obtained by people who have poor credit.

For secured credit cards, your credit limit is usually the same as whatever deposit you put down as security.

Secured credit cards usually also have a relatively small maximum limit, which is to be expected, given that they’re meant as a tool to help improve your credit score, not as a way to rack up a bunch of new debt.

What are secured credit cards used for?

Secured credit cards are one of the easiest ways for people with a poor credit history to get new credit that they can then use to improve their credit score over time.

Since there’s virtually no risk for the credit card issuer, they’re much more likely to approve people for these types of cards.

Once you have a secured credit card, you simply use it as you would a regular credit card, and make sure you pay it off in full every month.

The issuers of secured credit cards report your usage and payment activity to the credit bureaus on a regular basis. As long as you use the card responsibly, this will be reflected in your credit history, and will have a positive impact on your credit score.

Once you have improved your credit score sufficiently, you’ll be able to qualify for other forms of credit, including regular, unsecured credit cards.

Can I get turned down for a secured credit card?

Yes. While secured credit cards virtually guarantee approval, this is not an absolute guarantee. Credit card issuers may choose to deny you for whatever reasons they like.

Can I earn rewards on a secured credit card?

For the most part, these types of credit cards do not earn rewards, but there are a couple of exceptions.

You can earn cash back with both the credit card and the credit card, for example, although their earn rates aren’t nearly what you would find with a regular unsecured credit card.

The whole purpose of secured credit cards is to give you a way to rebuild your credit rating. Don’t worry about earning rewards until you’ve done this and are able to get a regular credit card with better and more interesting rewards.

What is an unsecured credit card?

An unsecured credit card is just a regular credit card. You don’t have to put down a deposit or any other form of security, but you’re also only approved if the credit card issuer decides you’re a low enough risk.

How do unsecured credit cards work?

An unsecured credit card is a normal credit card. You submit an application, the credit card issuer checks your credit score and credit history, and if they decide you’re a low enough risk (meaning that they think you’ll pay your bills on time so they don’t lose any money), they’ll issue you a card.

Your credit limit for an unsecured credit card will be set by the card issuer, not by you, so you have less control over that aspect. On the other hand, maximum credit limits for unsecured credit cards tend to be higher.

What are unsecured credit cards used for?

Unsecured credit cards give consumers a flexible way to make purchases they can pay off over time (if they want), as well as earn rewards.

Many credit cards also come with complimentary insurance coverage, purchase protection, and other perks and benefits.

While there are some who believe that credit cards are generally a bad idea, we feel differently here at creditcardGenius – used responsibly, credit cards give you a way to improve your credit score, get some extra benefits, and save money over time.

Not sure how to get and keep a good credit score? Learn how here.

A Good Credit Score

Secured vs. unsecured credit cards

Let’s go over the major differences between these 2 types of credit cards.

Secured credit cards Unsecured credit cards
Credit score required Poor Good to Excellent
Annual fee Usually low or no fee No fee to extremely high fees for ultra-premium cards
Credit limit * Equal to deposit, usually relatively low
* Maximum set by the issuer based on income and ability to pay
Set by the issuer, can be very high
Welcome bonuses None Often generous
Rewards Minimal or none Often extensive and valuable
Insurance coverage Minimal or none Travel and purchase protection coverage often included
Other perks and benefits Few Can be extensive

While the details will be different for each credit card, these are generally the differences you’ll find between these types of credit cards.

Which banks offer secured credit cards?

In our database, we track 6 secured credit cards offered by 5 different banks.

Bank Secured credit cards
of America
U.S. Bank

Of course all of these banks also issue regular credit cards. Click on the bank name above to read more about what unsecured credit cards they have to offer.

What are the best secured credit cards?

Here are the details for the 6 secured credit cards we track in our ratings database.

Credit card Annual fee Interest rate for purchases Features Apply now
Bank of America Cash Rewards Secured $0 23.99% * Earn cash back on all purchases
* Maximum credit limit of $4,900
* Free FICO score monitoring
Apply now
Discover it Secured $0 22.99% * Earn cash back on all purchases
* Maximum credit limit of $2,500
* Free FICO score monitoring
Apply now
Secured Mastercard from Capital One $0 26.99% * Maximum credit limit of $1,000
* Unlimited free access to your credit score through CreditWise
Apply now
BankAmericard Secured Credit Card $0 22.99% * Maximum credit limit of $4,900
* Free FICO score monitoring
Apply now
U.S. Bank Secured Visa $29 25.99% * Choose your payment due date
* Maximum credit limit of $5,000
* Free FICO score monitoring
Apply now
Citi Secured Mastercard $0 22.49% * Maximum credit limit of $2,500
* Free FICO score monitoring
Apply now

Let’s take a closer look at what these credit cards have to offer.

Up to 3% cash back on all your spending

The is a rare secured credit card that allows you to earn cash back on all your purchases, while also working to rebuild your credit rating.

With this Bank of America cash back credit card you’ll earn:

  • 3% cash back in the category of your choice – gas, online shopping, dining, travel, drug stores, or home improvement/furnishings,
  • 2% cash back at grocery stores and wholesale clubs, and
  • 1% cash back on all other purchases.

The 3% and 2% cash back categories have a combined maximum spend of $2,500 per quarter, after which you’ll earn 1% cash back.

Earn up to 2% cash back

With the , you’ll earn 2% cash back on gas and restaurants (up to $1,000 spent per quarter), and 1% cash back on all other purchases.

You can also enjoy a low APR of 10.99% on balance transfers for the first 6 months.

Secured card from Capital One

Another no fee secured credit card, the gives you some interesting financial tools, in addition to being a useful way to rebuild your credit.

Capital One has their CreditWise service, that gives you a way to track your financial health and keep a close eye on your credit score. And when you have a secured credit card, working on that credit score is pretty much the most important factor.

You’ll also pay no foreign transaction fees with this card, saving the normal 3% fee banks charge.

A simpler card from Bank of America

While the won’t earn any rewards, this Bank of America secured credit card has no foreign transaction fees, saving you the normal 3% fee charged on top of purchases in non-U.S. currencies.

A secured Visa from U.S. Bank

This is the only secured credit card we track that has an annual fee. On the other hand, it also has the highest possible credit limit of these 6 cards at $5,000, which can give you a little extra flexibility when you need it.

But, as with the other credit cards listed here, you should avoid carrying a balance on this U.S. Bank credit card. Not only will that possibly drag down your credit score, you’ll also end up with a hefty interest charge.

Citibank’s secured credit card offering

Finally, there’s the . This Citibank secured credit card has no annual fee, which is nice, but it’s as basic a credit card as you can get. No rewards, no perks, no additional features. Just a no fee secured card that you can use to build or rebuild your credit rating.

Did you know you can track your credit score for free? Here’s a list of credit card issuers that offer this service.

Track Your Credit Score for Free with these 9 Credit Card Issuers

Bottom line

If you have bad credit or you’re new to the United States, one of the easiest ways to start building your credit score is with a secured credit card. With virtually guaranteed approval, almost anyone can get one of these cards and use it to get their financial lives back on track.

Have you ever had a secured credit card?

Did it help you the way you were hoping?

Let us know in the comments.


What’s the best secured credit card?

Of the secured credit cards we track, the Bank of America Cash Rewards Secured credit card is the one our algorithm rates most highly. This is because it’s a no fee secured credit card that will not only help you build or rebuild your credit, but can also earn you cash back on all our spending.

Which banks offer secured credit cards?

We track 6 secured credit cards in our database, and these are issued by 5 banks – Bank of America, Discover, Capital One, U.S. Bank, and Citi.

Why would I want a secured credit card?

If you have no credit history or poor credit, a secured credit card can be the easiest way for you to start to build or rebuild your credit rating. Approval is virtually guaranteed since you have to put down a deposit before you can get the card, so there’s very little risk involved for the bank.

Can I get a secured credit card with bad credit?

Yes. The whole purpose of secured credit cards is to give people with no credit history or bad credit an easy, low risk way to start to rebuild their credit. Secured credit cards are designed for people with poor credit, or newcomers to the U.S.

What’s the easiest secured credit card to get?

Approval for most secured credit cards is virtually guaranteed, so it’s hard to say whether one is easier to get than another. Chances are good that if you can be approved for one of these secured credit cards, you can probably be approved for any of them. Of course, you won’t know until you try, and credit card issuers can deny you for any reasons they like.

What’s the best secured credit card for rebuilding credit?

Any secured credit card that reports to the 3 credit bureaus on a regular basis will be helpful in rebuilding your credit. An additional bonus would be free FICO score monitoring, so you can track your own progress as you go.