with bad creditUpdated: July 19, 2018

There are many stigmas surrounding bad credit. One of the most common is that people with bad credit cannot get a credit card. If you have bad credit, you may be wondering which credit cards you qualify for, if any. While most major credit cards require excellent, good or average credit for approval, the good news is that there are credit cards designed for people with bad credit or no credit — secured credit cards. To help you find the right card for you and your financial needs, we’re breaking down secured credit cards and detailing a few options to consider.

What are secured credit cards?

Secured credit cards are ideal for those who want to rebuild their credit. That’s because these cards offer an effective way to build credit with responsible use of the card, as most of them report to all three credit bureaus. Other credit cards only report to one or two of the credit bureaus, so three-bureau credit reporting can have a strong impact on your credit reports and scores.

When it comes to function, secured cards look and act like traditional credit cards (merchants don’t know the difference), but they require a deposit to “secure” your purchases. This deposit is used in the event that you miss or default on payments, as the lender really has no way of really knowing if you are capable of paying your bill on time, considering your credit reports may show you have either proven to be financially irresponsible in the past, or you have no credit history at all. The security deposit can range anywhere from $50 to about $3,000, depending on the card, and the amount you’ll pay is based on your credit history. It also may also determine your credit line (e.g., a $200 deposit will get you a $200 credit line). What’s more, the card issuer will refund your deposit when you close the account. It should be noted that you may get a refund sooner with the Discover it Secured card (detailed below), which automatically begins reviewing your account starting at 8 months to see if you can transition into an unsecured line of credit. Either way, if you use the card responsibly, you’ll be sure to get your deposit back later.

Best secured cards for bad, limited or no credit

Not sure which secured credit cards are worthwhile? Keep reading to find the right card for you and your credit-building goals.

Discover it Secured

with bad credit If you’re looking for a secured credit card with no annual fee, no foreign transaction fees and cash back rewards (a rarity for secured cards), look no further than the Discover it Secured card. This card earns 2% cash back at restaurants and gas stations (up to the quarterly maximum, currently $1,000 in combined purchases, then it’s 1% back) and 1% cash back on all other purchases. Additionally, Discover will match all the cash back you’ve earned at the end of your first year. This means if you’ve earned $100 back in your first year as a cardholder, Discover will match that and give you a total of $200 back! The security deposit required ranges from $200 to $2,500, depending on your credit history, and you’re required to fund the account within 2 weeks of your application date to complete the approval process. In addition to regular reporting to the three credit bureaus, Discover will also send you monthly updates to your TransUnion FICO Score and start reviewing your account after 8 months to see if you’re eligible for an unsecured line of credit. Rounding out the card are a number of cardholder perks, like free identity theft protection alerts, and no annual fee or foreign transaction fees.

Captial One Secured Mastercard

with bad credit Another great secured credit card with no annual fee is Captial One Secured Mastercard. This card has a $200 credit line and requires a deposit of $49, $99 or $200, depending on your credit. Like other secured cards, Capital One Secured Mastercard regularly reports to the three major credit bureaus. What’s more, there’s potential for you to get access to a higher credit line after you make your first 5 monthly payments on time.

Building credit isn’t always easy, but if you have the right tools, like a secured credit card, and you use them responsibly, you can move in the right direction. Want to learn more about the secured cards detailed in this post? Visit our reviews of the best credit cards to rebuild credit to see how they compare and apply online.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.