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Best secured credit cards for August 2024

Ben Walker (CEPF, CFEI?)
·Senior Writer, Credit Cards
Updated 13 min read

Secured credit cards are excellent options for helping build credit because they have more relaxed eligibility requirements than traditional cards. However, they work just like any other regular credit card, so they’re a convenient resource for making everyday purchases.

The main difference between a secured and unsecured card is that secured options require a security deposit (typically a minimum of $200 to $300) that acts as collateral.

After comparing dozens of different secured credit cards, our top recommendations include the Discover it? Secured Credit Card and Capital One Quicksilver Secured Cash Rewards Credit Card because of their earning potential and opportunities to upgrade to unsecured cards.

Annual fee: $0

Security deposit: Minimum $200 (up to $2,500)

Reports to major credit bureaus: Yes

Welcome offer: Automatically get an unlimited dollar-for-dollar match of all the cash back you earn at the end of your first year

APR: 28.24% standard variable purchase APR

Rewards:

  • 2% Cashback Bonus? at gas stations and restaurants on up to $1,000 in combined purchases each quarter

  • 1% cash back on all other eligible purchases

Upgrade options: Discover starts automatic monthly account reviews after seven months to see if you’re eligible to upgrade to an unsecured credit card and get your security deposit back.

Why we like this card for earning rewards: If you compare secured vs. unsecured cards, secured cards generally have worse benefits than unsecured options. However, the Discover it Secured Credit Card provides excellent reward opportunities.

That includes receiving a dollar-for-dollar cash-back match at the end of your first year. For example, if you earned $200 cash back in your first year, Discover would match that and you’d receive $400 in total cash back.

Read our full review of the Discover it Secured Card

Annual fee: $0

Security deposit: Minimum $200 (up to $3,000)

Reports to major credit bureaus: Yes

APR: 29.99% variable

Rewards:

  • Unlimited 1.5% cash back on every purchase, every day

Upgrade options: You may be automatically considered for a higher credit line in as little as 6 months. With responsible use, you could earn your security deposit back and upgrade to an unsecured Quicksilver card.

Why we like this card for simple cash back: The Capital One Quicksilver Secured makes it easy to earn cash-back rewards. You don’t have to worry about different spending categories or earning rates; it’s simply 1.5% unlimited cash back on all your eligible purchases.

Annual fee: $0

Security deposit: Minimum $200 (up to $5,000)

Reports to major credit bureaus: Yes

APR: 29.24% variable

Rewards:

  • 3% cash back in a category of your choice*: gas and EV charging stations, online shopping, dining, travel, drug stores and pharmacies, or home improvement and furnishings

  • 2% cash back at grocery stores and wholesale clubs*

  • 1% cash back on all other purchases
    *You’ll earn 3% and 2% cash back on the first $2,500 in combined purchases each quarter in your choice category and at grocery stores and wholesale clubs, then 1%

Upgrade options: You may qualify to have your security deposit returned based on periodic Bank of America account reviews

Why we like this card for customized rewards: Unlike most credit cards, the Bank of America Customized Cash Rewards Secured allows you to customize how you earn rewards. You can choose a different category each month, helping you earn more rewards based on your monthly spending.

Navy Federal nRewards? Secured Credit Card: Best for military

Annual fee: $0

Security deposit: Minimum $200 (up to $5,000)

Reports to major credit bureaus: Yes

APR: 18% variable

Rewards:

  • 1x points per dollar spent

Upgrade options: At three months, you could be eligible for an automatic line increase. Navy Federal will start monthly reviews after six months to see if you’re eligible for an upgrade to a Navy Federal cashRewards Credit Card.

Why we like this card for military members: We think the nRewards Secured Credit Card is a great card for building or rebuilding credit because it doesn’t have an annual fee, earns rewards, and reports activity to the major credit bureaus.

However, you have to be a Navy Federal Credit Union member to apply for the card. To join, you or a family member must typically have ties to the U.S. armed forces, Department of Defense, or National Guard. That could mean being an active duty, retired, or veteran military member, or working with the Department of Defense.

Annual fee: $0

Security deposit: Minimum $300 (up to $5,000)

Reports to major credit bureaus: Yes

APR: 29.99% variable

Rewards:

  • 4x points on dining, takeout, and restaurant delivery

  • 2x points on streaming services, at grocery stores, and at gas stations and EV charging stations

  • 1x points on all other eligible purchases

Upgrade options: You may automatically graduate to a U.S. Bank Altitude Go Visa Signature Card and have your security deposit returned with responsible card usage.

Why we like this card for dining rewards: Earning 4x points on dining, takeout, and restaurant delivery is an excellent rewards rate for any credit card, let alone a secured card. Most cards with a dining spending category don’t offer over a 3x return, making the U.S. Bank Altitude Go Secured a top credit card for restaurants.

Annual fee: $0

Security deposit: Minimum $200 (up to $5,000)

Reports to major credit bureaus: Yes

APR: 29.24% variable

Rewards:

  • Unlimited 1.5% cash back on all purchases

Upgrade options: You may qualify to have your security deposit returned based on periodic Bank of America account reviews

Why we like this card for simple rewards: The Bank of America Unlimited Cash Rewards Secured Credit Card offers unlimited 1.5% cash back on all purchases. There are no spending categories to track: just a flat, straightforward rewards rate. If you prefer using one card for everything, this could be the one for you.

Annual fee: $0

Security deposit: No minimum amount (your credit limit is determined by how much money you transfer to your Credit Builder secured account from your Chime Checking Account)

Reports to major credit bureaus: Yes

APR: N/A

Rewards: N/A

Upgrade options: N/A

Why we like this card: The Chime Secured Credit Builder is unique because it’s a secured credit card that doesn’t require a minimum security deposit. Instead, you must have a Chime Checking Account to apply and any money you move from your checking account to your secured account acts as your available spending money.

The Chime Secured Credit Builder also doesn’t charge interest and there’s no credit check to apply. Most secured credit cards require a hard credit check, which is counterintuitive, considering you likely want one of these cards to help build your credit history. With the Chime Secured Credit Builder, there’s no worry about a hard inquiry.

Read our full review of the Chime Credit Builder Secured card

Annual fee: $0

Security deposit: Minimum $300 (up to $5,000)

Reports to major credit bureaus: Yes

APR: 29.99% variable

Rewards:

  • 5% cash back on your first $2,000 in combined eligible purchases in two categories you choose each quarter; available categories include fast food, home utilities, department stores, cell phone providers, electronic stores, and more

  • 5% cash back on prepaid air, hotel, and car reservations booked through the Rewards Travel Center

  • 2% cash back on eligible purchases in your choice of one everyday category, including grocery stores and grocery delivery, restaurants, or gas stations and EV charging stations

  • 1% cash back on other eligible purchases

Upgrade options: You may automatically graduate to a U.S. Bank Cash+? Visa Signature? Card and have your security deposit returned with responsible card usage

Why we like this card for elevated rewards: The U.S. Bank Cash+ Secured provides a high rewards rate in multiple categories, including 5% cash back on the first $2,000 each quarter in two chosen categories. You could earn $100 cash back each quarter if you spend up to that limit.

BankAmericard?? Secured Credit Card

The BankAmericard Secured Credit Card is a no-frills card that could help you build your credit and qualify for better credit opportunities. It doesn’t earn rewards but has a $0 annual fee.

You must put down a minimum security deposit of $200 (up to a maximum of $5,000). Bank of America will periodically review your account to determine if you qualify to receive your security deposit back.

The Capital One Platinum Secured has a $0 annual fee and only requires a minimum $49 refundable security deposit. Considering most secured cards require at least a $200 or $300 deposit, this could be a good option if you want a smaller deposit amount.

By making purchases with your card and then making on-time payments, you could help build your credit and upgrade to an unsecured Platinum card.

Read our full review of the Capital One Platinum Secured Credit Card

Citi? Secured Mastercard?

The Citi Secured Mastercard makes sense if you want to establish some credit history. It works everywhere Mastercard credit cards are accepted, so it’s easy to use. In addition, it has a $0 annual fee and you only need a $200 minimum security deposit (up to a maximum of $2,500).

U.S. Bank Secured Visa? Card

The U.S. Bank Secured Visa is a simple credit card with a $0 annual fee and no rewards rate. Like most secured cards, your credit limit is tied to a security deposit you have to put down if you’re approved for the card.

U.S. Bank reports your credit activity to the three major credit bureaus, making this card a great option for building your credit.

Bank of America? Business Advantage Unlimited Cash Rewards Secured Card

This card could be a good option to help build your business credit history. It has a $0 annual fee and provides 1.5% cash back on all eligible purchases.

Note that this card requires a $1,000 minimum security deposit, which is a bit high but makes sense for a business card.

Secured credit cards are designed to help users build their credit. They require a cash security deposit that typically acts as your credit limit. With most secured cards, that means if you were to put down a $500 deposit, you would have a $500 credit limit.

Unsecured cards are more appealing but often have more strict eligibility requirements. Getting approved for a secured credit card is still possible if you can’t qualify for a traditional card because of a limited, poor, or bad credit history.

In most cases, you can still use a secured card just about anywhere credit cards are accepted, and responsible usage can help build your credit history. You could then upgrade to an unsecured credit card (if the credit card issuer offers this option) or apply for a regular credit card from another issuer.

Consider these factors to find the secured credit card that makes the most sense for you and your personal finance goals:

  • Eligibility requirements: Generally, secured cards don’t require an established credit history for approval. However, many card issuers will still do a hard credit inquiry to determine your creditworthiness. If you want to avoid that, consider cards like the Chime Secured Credit Builder that don’t require a credit check.

  • Credit reporting: For most people, the primary reason to get a secured credit card is to build credit. If you want to build your credit effectively, make sure the card issuer reports activity to the three major credit bureaus (Experian, Equifax, and TransUnion).

  • Minimum security deposit: The minimum required security deposit on most secured cards is around $200 to $300. If you’re worried about putting down a large cash deposit, some cards, like the Capital One Platinum Secured, have lower deposit requirements. Just be aware that a low credit limit could more easily result in high credit utilization.

  • Maximum security deposit: Your security deposit amount typically acts as your credit limit. Consider cards with higher maximum security deposits if you want a higher credit limit.

  • Fees: Keep an eye out for cards that charge annual fees on top of requiring a security deposit. And if you travel internationally, consider cards without foreign transaction fees.

  • Upgrade options: Many secured credit cards provide a way to upgrade to an unsecured card later. That often means you would receive your security deposit back after enough time of responsible card usage.

  • Benefits and rewards program: Rewards and cardholder perks are likely an afterthought to building credit history, but they should still be considered. After all, a rewards credit card could still help you build credit while also providing valuable points or cash back.

Responsibly using a secured credit card can help build your credit history, which could allow you to qualify for unsecured cards and other credit products. In many cases, it’s possible to graduate to an unsecured card from the same card issuer if you use your card and make on-time payments.

A secured credit card typically requires a minimum security deposit of around $200 to $300. The maximum amount depends on the card but could go up to $3,000 or more. Your security deposit often acts as your credit limit, so a deposit of $1,000 would give you a $1,000 credit limit.

Secured cards don’t necessarily build your credit faster than unsecured options, but you can still see significant improvement over a relatively short period of time. If you focus on different credit score factors, such as maintaining a positive payment history, you might see changes to your credit score in as little as 30 to 45 days.

We researched many secured card options from different issuers to find the best secured credit cards. We did not include all available options from every financial institution.

With our research, we compiled a list of dozens of secured credit cards and created a rubric to rate each card based on various factors. Some factors we used include ongoing APR, annual fees, welcome offers, rewards, security features, and more.

We ended up with a final list of cards that scored well using our rating system and aligned with our expert opinion, experience, and research.

This article was edited by Alicia Hahn

More about Chime:

  • No Interest: Out-of-network ATM withdrawal and OTC advance fees may apply. View The Bancorp agreement or Stride agreement for details; see back of card for issuer.

  • No Minimum Security Deposit: 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.

  • The secured Chime Credit Builder Visa? Credit Card is issued by The Bancorp Bank, N.A. or Stride Bank, N.A., pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your card for its issuing bank.

  • To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

  • Safer Credit Building - On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion?, Experian?, and Equifax?. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.