View Best Secured Credit Cards - Comparewise

Best Secured Credit Cards

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Secured

*Limited time only – Get a $20 cash bonus with code: COMPAREWISE by...
  • $0
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
*Limited time only – Get a $20 cash bonus with code: COMPAREWISE by...
  • $0
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
*Limited time only – Get a $20 cash bonus with code: COMPAREWISE by...
  • $84
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
KOHO has recently switched to Mastercard! Check out the KOHO Joint Prepaid...
  • $0
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
KOHO has recently switched to Mastercard! Check out the KOHO Prepaid...
  • $0
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
KOHO has recently switched to Mastercard! Check out the KOHO Premium...
  • $84
    Annual fee
  • $20
    Welcome Bonus
  • 2%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: 5.0
The Neo Secured card is a game-changer for anyone with poor credit or no...
  • $0
    Annual fee
  • $0
    Welcome Bonus
  • 5%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: no reviews
The Refresh Financial Secured Credit Card is one of the best credit cards...
  • $12.95
    Annual fee
  • $0
    Welcome Bonus
  • 0%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: no reviews
The Capital One Guaranteed Secured Mastercard gives you an effortless way...
  • $59
    Annual fee
  • $0
    Welcome Bonus
  • 0%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: no reviews
Having bad credit or no credit history can be a barrier to several...
  • $0
    Annual fee
  • $0
    Welcome Bonus
  • 0%
    Rewards Rate
  • Min.Credit:
                        
  • Rating: no reviews

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Secured Credit Cards

If you have poor or non-existent credit, chances are you may face a few credit card application rejections. Place your rejection woes aside. Secured credit cards are here to save the day.

What is a Secured Credit Card?

A secured credit card helps cardholders build or repair their credit. Suppose you're ineligible for a regular credit card. In that case, a secured credit card can offer the conveniences of being a credit cardholder.

It functions like a regular credit card in some respects. However, to access a credit line provided by the credit card company, you’ll need to make a security deposit. This protects you and the credit card provider from missed bill payments.

secured credit cards - comparewise

How Secured Credit Cards Work

When you sign up for a secured credit card, you’ll need to make a security deposit. Some credit card providers have a minimum of $50, while others require $200 at least.

The amount you pay will often set your credit limit. This means you can only make purchases up to the amount you deposit. For instance, if your security deposit is $500, you can only charge up to $500 on your secured credit card.

However, some credit card providers require a higher cash deposit for a lower credit limit. The amount of credit they offer often depends on your credit score.

You can use a secured credit card like a regular credit card. This includes in-person and online purchases. You can also use a secured credit card to settle your bills.

Besides the security deposit that sets this card apart, your credit activity is reported to Canadian credit bureaus. Therefore, every on-time payment can improve your credit.

Pros and Cons of Secured Credit Cards

Before applying for a secured credit card, consider the following advantages and disadvantages.

The Pros of Secured Credit Cards

  • Credit improvement. With regular use and complete, timeous payments against your balance, you'll see a significant improvement in your credit score.
  • Low barriers to entry. Your credit score and income level won’t play a role in your chances of being approved for a secured credit card. At most, you will need to have a source of income to pay down your balance.
  • Great introductory card. If you're new to credit cards or a student, a secured credit card is an ideal introduction to credit.

The Cons of Secured Credit Cards

  • Possible negative impact on your credit score. If you don’t pay your balance on time, it can negatively affect your credit. That’s why it’s important to remember that a secured credit card won’t fix bad financial habits. You’ll need to work consciously on fixing your spending habits.
  • High-interest rates. Most secured credit cards have high-interest rates because of the cardholder's perceived risk. Also, the interest rates on some cards increase if you miss a payment.

Choosing the Right Secured Credit Card for You

Finding the best-secured credit card for you requires shopping around. Here are some pointers to finding a suitable credit card:

  1. Determine if you can afford the minimum-security deposit
  2. Check that the annual fee will fit your budget
  3. Look out for rewards or points you can earn on purchases
  4. Determine if the credit card provider reports credit activity to the credit bureaus
  5. Check that the interest rate is competitive

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Offers shown here are from third-party advertisers. We are not an agent, representative, or broker of any advertiser, and we don’t endorse or recommend any particular offer. Information is provided by the advertiser and is shown without any representation or warranty from us as to its accuracy or applicability. Each offer is subject to the advertiser’s review, approval, and terms. We receive compensation from companies whose offers are shown here, and that may impact how and where offers appear (and in what order). We don’t include all products or offers out there, but we hope what you see will give you some great options.

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comparewise

May 16, 2022
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FAQs about
Secured Credit Cards

Should I Get a Secured Credit Card?

If you have poor credit or no credit history, then yes. Secured credit cards are also suitable for anyone who has declared bankruptcy or is in a consumer proposal. Since you won’t be eligible for a regular credit card, a secured credit card is your best bet.

Will a Secured Credit Card Really Improve My Credit Score?

Yes, as long as you pay your balance on time and in full. You’ll be amazed at what this card can do for your credit score.

Also, responsible use of your credit card will help you reach your financial goals. Remember only to use your card for small purchases every month to stay on track.

Do Secured Credit Cards Have Guaranteed Approval?

Not all secured credit cards have guaranteed approval. A credit card provider may deny your application. This is especially true if you have accounts in collection or multiple missed payments on your record.

If your application is denied, it’s best to ask why. You have a legal right to know. You can solve the problem before applying for another secured credit card. Note that cards offering guaranteed approval are known as guaranteed credit cards.

Should I Have A Source Of Income to Be Approved for a Secured Credit Card?

Ideally, yes. Although an income is not often required, your chances of approval will be higher if you have a source of income.

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