secured credit cardsWhether you have poor credit or no credit, there are still opportunities for you to work toward improving your credit scores. Despite what you might believe, there are cards called secured credit cards that are specifically designed to help people build or rebuild their credit. Below we discuss how these cards work and detail some of the top options.

Why should you consider a secured card?

Secured credit cards are the perfect option for individuals who may not qualify for other credit cards because they have a limited or not-so-great credit history. Since most secured credit cards report to all three credit bureaus, unlike traditional credit cards that usually report to one or two of the bureaus, you’re able to build all three of your credit scores at once if you use a secured credit card responsibly.

While these credit cards look and act like traditional credit cards — a merchant will not know the difference — the cards function a bit differently. That’s because secured credit cards require a security deposit to open them. This deposit not only acts as collateral when you miss or fail to make a payment, but it also usually determines your spending limit. For example, if you put a $200 security deposit down to open the card, your card’s limit will be $200 — note that this may not be the case for every card. Some creditors allow you to determine the security deposit you wish to pay (based on its set amounts), while others offer tiered amounts and consider your creditworthiness to determine the deposit amount. As time passes and you make your payments consistently and on time, the creditor will expand the card’s limit or return part or all of your security deposit. Note that some cards will not return your deposit until you close out the card.

Which secured credit cards are the best?

While there aren’t the seemingly limitless options for secured credit cards like there are with traditional credit cards, there are still a number of great secured credit cards to choose from. Here are some of these options.

Capital One Secured Mastercard

secured credit cardsAnother card that doesn’t have an annual fee is the Capital One Secured Mastercard. This card gives you an initial credit line of $200 after you provide a deposit of $49, $99 or $200 (depending on your creditworthiness). After 5 months of monthly on-time payments, you’ll get access to a higher credit line — no extra deposit is needed. As an added bonus, all payments made to this card are reported to all 3 credit bureaus.

OpenSky Secured Visa Credit Card

Although this card has a $35 annual fee, the OpenSky Secured Visa Credit Card is still a great option for building your credit. This card requires a minimum deposit of $200 for a matching credit line, with an initial maximum of $3,000. You can increase your credit line up to $5,000 with a good payment history. Like the other secured credit cards we’ve mentioned, this one reports all of your payments to the 3 credit bureaus to help you build good credit with responsible use of the card.

Green Dot primor Secured Visa Classic Card

secured credit cards Looking for a low, fixed-rate APR? The Green Dot primor Secured Visa Classic Card has a 13.9% purchase APR, which is much lower than the other secured credit cards we review. While it does have a $39 annual fee and some other “add-on” fees to watch for, the card does regularly report to all 3 credit bureaus and there’s no penalty rate for missed payments. This card has a minimum deposit starting at $200, and your credit limit will equal your security deposit amount.

Read our secured credit card reviews to learn more about the cards detailed in this post and see how they compare to other options.

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.