Best Secured Credit Cards for 2021

Millennial Money has partnered with CardRatings and creditcards.com for our coverage of credit card products. Millennial Money, CardRatings and creditcards.com may receive a commission from card issuers. This site does not include all financial companies or financial offers.

A secured credit card can be a secret weapon in the battle to repair damaged credit or simply build credit from scratch.

Even if you’re just starting out and have no prior credit history, a secured credit card can allow you to get in the practice of paying your monthly credit card bill and earn a good reputation with the credit bureaus as someone who can be trusted with a larger unsecured line of credit.

Most people who apply for a secured credit card use it for a period of time — between a few months to a year — before they become eligible for a credit card with fewer fees and larger limits.

But you can still find secured credit cards with good features and some that grow with you as your credit improves.

5 Best Secured Credit Cards for 2021

Here are the 5 best secured credit cards:

OpenSky® Secured Visa®

This secured card boasts a reasonable, fixed annual fee so you’ll always know what to expect. Unlike the Capital One Secured Mastercard, the OpenSky card has a minimum deposit of $200.

Why It Stands Out

First and foremost – there is no credit check required. Plus, we love this card’s straightforward and fair fee structure + lower than average APR.

Your regular payments will be reported to all 3 credit bureaus so you can watch your score improve every month.

This card does have an inactivity fee if you don’t use your account for 12 months or longer. First, your deposit will be returned to you, but if it is unsuccessful a $10 per month charge will be deducted from your balance.

  • Fees: $35 annual fee, 3% foreign transaction fee

Merrick Bank Secured Visa® from Merrick Bank

The Merrick Bank Secured Visa from Merrick Bank allows you to chose your own credit line according to the amount you put down as an initial security deposit. The minimum deposit is $200 and caps out at $3,000.

We recommend this card if you find yourself without many good options and need something to get you started on the path to building credit or credit repair. Use it strategically, and it can be the shovel to help dig you out of a hole.

Why It Stands Out

You won’t be stuck with this initial credit line. After 9 months, they will review your account for a credit line increase. The best part? No additional deposit required!

You’ll get free access to your monthly FICO score, and they will report to all three major credit-reporting agencies as you pay your bill every month.

  • Fees: $36 annual fee for first year, billed $3 per month thereafter

Learn more about Merrick Bank in our full Merrick Bank review.

Green Dot Primor® Visa® Gold Secured Credit Card

While a lot of secured credit cards come with high APRs, the Green Dot Primor Visa Gold card caps its APR at 9.99%. This is low enough that even veteran credit card users might take a second look.

Though we always recommend paying off your balance each month, an APR under 10% makes those unexpected months less when you can’t pay off your balance.

Why It Stands Out

One of the lowest interest rates we’ve seen, plus flexible credit limits between $200 to $5,000!

Fast, easy, and free application process. Like most secured credit cards, this one reports your good behavior three national credit bureaus, helping you grow your score and creditworthiness across the board.

  • Fees: $49 annual fee

Capital One® Secured Mastercard®

This secured credit card starts with an initial security deposit of $49. You can also opt for $99 or $200.You can increase this by increasing your security deposit or by making your first 5 payments on time.

Why It Stands Out

Super accessible – Start building credit even with a limit as low as $49.

Pick your own due date to make payments when it’s best for your cash flow.

  • Fees: $0 annual fee

Citi® Secured Mastercard®

What better way to save money than to save on annual fees? A $0 annual fee makes this card exceptionally helpful at the purpose it’s intended for – helping you build your credit and meet your financial goals.

Enjoy $0 annual fees with this Citi Mastercard that is accepted worldwide at millions of merchants.

Why It Stands Out

Flexible credit limits between $200 to $2,500

Reporting to national credit bureaus, strong identity theft protection, and zero liability purchase protection for unauthorized charges. Plus, free online and mobile banking tools.

This card is not available for people who have filed bankruptcy within the last 2 years.

  • Fees: $0 annual fee

What Happens If You Don’t Pay Your Balances on a Secured Credit Card?

While we don’t ever recommend letting your credit card balances go unpaid, this scenario is precisely why secured credit card lenders require you pay a deposit.

Your security deposit acts as collateral and protects the lending bank.

If a customer doesn’t pay their credit card balance, the deposit is used to pay off any debts before the remaining amount is returned.

Assuming you use your secured credit card responsibly and repay your balance as agreed, eventually, the bank may agree to convert your secured card into an unsecured account. When this happens — or you close your account, whichever comes first — the bank will refund your security deposit.

Secured Credit Card FAQs

Do Secured Credit Cards Come With Rewards?

Unfortunately, the vast majority of secured credit cards do not come with perks like cash back rewards. These are, admittedly, low-frills cards designed to help consumers learn to use credit responsibly and build a positive credit history.

That said, secured cards, like all types of credit cards, come with good fraud and purchase protection in the event your card is lost or stolen, or you have a dispute over a purchase made with the card.

Admittedly, secured credit cards are not as widely advertised as other credit cards. It might take a bit of research, but most people can find a secured credit card that suits their needs.

How do I Get a Secured Credit Card?

Getting a secured credit card is just like getting an unsecured credit card, but with one extra step. First, you will need to research and find a card that will approve you based on your credit rating.

Then you will apply for the card. Once you are approved for a secured credit card, you’ll need to make a refundable security deposit to the lending bank. The deposit is held in a collateral holding account for a particular amount of time.

You may or may not earn interest on this deposit, depending on the card. Even if you do earn interest on your deposit, the amount of interest will be trivial compared to the interest you will pay on the card if you do not pay your balance in full every month.

The amount you deposit will determine your credit limit. For example, if you deposit $500, then you will be able to borrow up to that amount. Most secured credit cards have a minimum deposit of around $200, but it varies.

Some secured credit cards have a maximum credit limit of $300 while others allow you to borrow more after you prove creditworthiness.

If these credit limits seem low, don’t be discouraged. Remember, the point of a secured credit card isn’t to give you spending power, it is to get into the habit of using a card, paying the balance, and showing the bank you can be responsible with credit.

Additional Disclosures: Millennial Money has partnered with CardRatings and creditcards.com for our coverage of credit card products. Millennial Money, CardRatings and creditcards.com may receive a commission from card issuers. This site does not include all financial companies or financial offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Comments are closed here.

In This Article