By Adam Jusko, ProudMoney.com, email@example.com
If you have a bad credit history or very little (or no) credit history, banks may approve you for a secured credit card that requires a refundable security deposit but otherwise works just like any other credit card (meaning you pay your balance each month, payments are NOT taken from your deposit). Secured credit cards can help you build credit if you use them responsibly, and they are one of our favorite ways to do so.
Below we offer our list of the 7 best secured cards on the market today. We are especially partial to cards that allow you to “graduate” — meaning either returning your security deposit after a certain period of on-time payments and letting you use the card unsecured, or offering you an upgraded, unsecured card while also returning your deposit. We also tend to favor major banks, because when you are building credit it is also to your advantage to build a relationship with a bank that offers unsecured credit cards you might want in the future.
- Discover It Secured Card – Deposit anywhere from $200 to $2500 and get a credit line of equal size. Also offers a modest cash back reward program: a 1% rebate on most purchases, and 2% on restaurant and gas purchases (on up to $1000 in such purchases per calendar quarter). A good payment history can help in building credit, and “Using credit responsibly across all of your credit cards and loans, including Discover and others, may qualify you to get your security deposit back.” No annual fee. Interest rate of 25.24%.
- BankAmericard Secured Card – Put down a security deposit of anywhere from $300 to $4900 and get a credit line of that same amount. Also, they will “periodically review your account and, based on your overall credit history (including your account with us and other credit cards and loans), you may qualify to have your security deposit returned.” No annual fee. Interest rate: 25.24%.
- Capital One Secured MasterCard – Get a credit line of $200 to start, after you deposit $200 (in some cases you may be able to deposit a little less). If you make your first 5 payments on time, Capital One might increase your credit line without a further deposit. However, does not offer a clear path to “graduating” to an unsecured card. No annual fee. Interest rate: 26.99%.