— Our editors review and recommend products to help you buy the stuff you need. If you sign up for a credit card after clicking one of our links, we may earn a small fee for referring you. However, our picks and opinions are independent from USA TODAY's newsroom and any business incentives.
A credit card can be a great way to make a quick payment online, build credit, finance your purchases, and earn rewards.
But when you apply for a credit card, the issuer normally checks your credit reports and looks for a strong history of paying back money you’ve borrowed. If you’re new to credit or have a spotty credit history, then it may be tough to qualify because the issuer knows it’s taking on more risk. A secured credit card can be a good solution in these cases: You provide a refundable cash deposit to the issuer, in exchange for the benefits that come with a credit card.
We looked through secured credit card offers and weeded out the ones with high APRs, too many fees, and not enough benefits. Here are the best secured credit cards we evaluated, ranked in order:
Best overall: Discover It Secured
Best value: Secured Mastercard® from Capital One
DCU Visa Platinum Secured Card
OpenSky Secured Visa Credit Card
Navy Federal Credit Union nRewards® Secured Credit Card
Citi® Secured Mastercard®
Things to know about secured credit cards
People who apply for secured credit cards generally fall into two categories: Consumers who are new to credit, such as students or people who’ve recently moved to the U.S., and consumers looking to rebuild credit after a financial setback. Before applying for one of these cards, you should understand how they work:
Secured credit cards require a cash security deposit, which is typically refundable when you upgrade to an unsecured card or close the account in good standing.
The deposit protects the issuer in case you fall behind on payments, but it’s also usually equal to your credit limit. If you max out the card and fail to pay it off, the issuer can take your deposit and zero out the unpaid balance.
As you use the card, your issuer reports your account activity to the major credit bureaus. This can help you build a good credit history and develop credit scores, which are largely based on payment history and your credit utilization ratio. That’s the amount of credit you’re using divided by the amount of credit you have available.
To improve your credit scores, try to make monthly payments on time and aim for a credit utilization ratio around 30% or less. Paying down your balance each month will help, but so will having a higher credit line. For example, if you have a $200 balance on a card with a $500 limit, then your credit utilization ratio is 40%. But the same balance on a card with a $1,000 limit reduces your utilization ratio to 20%.
How we evaluated
We searched for secured credit cards that limit extra costs (fees and interest rates), help you build credit, and come with flexible credit limits. And while rewards take a back seat here, they’re still a nice addition—so we gave them some attention.
When selecting a secured credit card, you should always read through the cardmember agreement and ask questions. Check the APR, which is a cost the issuer charges when you don’t pay off the balance every month, and fees, which may be extra burdensome if you’ve already parted with cash for your deposit and have a low credit limit.
Need help finding products? Sign up for our weekly newsletter. It’s free and you can unsubscribe at any time.
Best overall: Discover It Secured
This card earns the top position on our list because it offers plenty of consumer-friendly features: a path to a security deposit refund, credit-building tools, a solid rewards program, no annual fee, and no late fee when you miss your first payment.
How the deposit works: You can make a security deposit of $200 to $2,500. Discover automatically reviews your account every month, starting at eight months, and may refund your security deposit if you've shown responsible credit use. You can also get your deposit back if you pay your balance in full and close the account.
Other important features: With the rewards program, you get 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter, and an unlimited 1% cash back on all other purchases. Plus, you’ll get a match on all the cash back you earn in the first year. Discover also provides free access to your FICO credit scores, which can help you understand your overall credit health.
Fees and APR: There’s no annual fee, and cardholders get a free pass on their first late payment (thereafter, late payments incur a fee). The card also comes with a low variable APR and charges a balance transfer fee and cash advance fee.
Best value: Secured Mastercard from Capital One
The Secured Mastercard from Capital One is our runner-up because you can grow your credit line without putting down extra money—a major win for people who don’t have the cash on hand for a large deposit—and it has no annual fee.
How the deposit works: Based on your credit, Capital One will assign you a minimum security deposit: $49, $99, or $200 (or put down more, if you choose). You’ll get a credit line of at least $200 once you pay the initial deposit, which means you may qualify to pay a $49 deposit for a credit line of $200. In as little as six months, Capital One may grant you an even higher credit line without requiring an additional deposit.
Capital One may decide to refund your deposit as a statement credit, or you can ask for the deposit back if you close the account in good standing.
Other important features: Like many cards for bad credit, this one comes with no rewards program—but if chasing rewards will cause you to spend more, then it’s best to get a card without them. Capital One also has its own credit-tracking program, CreditWise, which is free for everyone (even people without a Capital One card).
Fees and APR: The variable APR is on the higher side, but can be avoided if you don't carry a balance. There’s also a cash advance fee and late payment fee, but no annual fee.
DCU Visa Platinum Secured Card
This card has the lowest APR of all the cards on our list and only one fee to speak of, so it stands to save you the most on costs.
How the deposit works: You’ll use your DCU savings account to put down at least $500 to open the card—and there’s no upper limit on the size of your deposit, as long as you qualify for the credit line. While that puts the card out of reach for people who can’t afford a large deposit, it can be a good option if you have a healthy savings account.
To get the deposit back, you’ll need to pay off the balance and close the account. You can also apply for an unsecured credit card if you’ve established healthy credit.
Other important features: This card does not offer rewards, and you’ll need to join the credit union to open the credit card. Although DCU’s [membership eligibility requirements](https://www.dcu.org/about/member-eligibility.html) are exceptionally flexible, this could be a deal-breaker for some.
Fees and APR: The card comes with a low variable APR, and there’s no annual fee, balance transfer fee, cash advance fee, or foreign transaction fee. However, making a late payment may trigger a penalty APR and a late payment fee.
OpenSky Secured Visa Credit Card
While this card comes with an unimpressive fee structure and account terms, it offers one truly helpful benefit, especially if you’re rebuilding credit after a setback. OpenSky won’t pull your credit during the application process or ask that you have a bank account, which are routine requirements for other issuers.
How the deposit works: Your deposit can range from $200 to $3,000, subject to approval. The deposit is refundable if you decide to pay off the balance and close the account.
Other important features: There’s no rewards program, and if you’re looking to upgrade at some point, you’re out of luck here. OpenSky won’t change your account to unsecured, but it does say 99% of its cardholders who started with no credit score built credit after six months of responsible use.
Fees and APR: This is the only card on our list with an annual fee: It’s $35 and counts against your credit limit. There’s also a cash advance fee, foreign transaction fee, and late payment fee.
Navy Federal Credit Union nRewards Secured Credit Card
This card has everything you want when building credit—primarily, a solid rewards program, free access to your FICO credit scores, a cell phone protection plan, and a dearth of extra costs.
How the deposit works: You’ll use your NFCU savings account for your deposit, which can range from $200 to $5,000. After six months, Navy Federal Credit Union reviews your account to see if you’re eligible for an upgraded cashRewards unsecured card. You can also get the deposit back if you decide to pay off the balance and close the account.
Other important features: You earn one point per dollar spent on all purchases through the rewards program, and the cell phone plan provides supplemental protection when you pay your bill with this card.
Despite all its perks, this card sits lower on our list because you must join the credit union to apply. Unlike DCU, membership is strictly limited to service members of the armed forces, veterans, and family members of these groups.
Fees and APR: The card comes with a low APR, and there are no annual fees, balance transfer fees, foreign transaction fees, or cash advance fees.
Citi Secured Mastercard
Forget the bells and whistles here: The Citi Secured card is a no-frills option that provides just the basics. You can make purchases, build credit, check your free FICO credit scores—and that’s pretty much it.
How the deposit works: Put down a deposit, between $200 and $2,500, as your credit limit. You can get the deposit back if you pay off the balance and close the account.
Other important features: None. But you might find something great in the simplicity; for example, the lack of a rewards program can stifle your temptation to spend.
Fees and APR: This card’s APR is on the lower side, and though it comes with an assortment of fees, they’re clearly stated and can be avoided. There’s a balance transfer fee, cash advance fee, and foreign transaction fee. Making a late payment will also trigger a late payment fee and a penalty APR.
Though secured credit cards are usually a stopgap for people who don’t qualify for an unsecured card, they’re a good tool for building credit. Getting one with a low APR and limited fees will help you save money in the process.
Some issuers will review and upgrade your account automatically if you’ve shown you can use a secured card responsibly. But you can also monitor your own credit and consider applying for an unsecured card. You may need a good to excellent credit score to qualify, which is a score around 670 or higher.
Before closing your secured credit card and opening a new unsecured card, consider the potential consequences to your credit. Closing an account lowers the overall age of your credit history, which can cause your scores to temporarily drop. Then, your score can get dinged again when you apply for new credit. However, your credit scores can mend over the next few months if you make on-time payments and keep your balances low.
Please note: The offers mentioned above are subject to change at any time and some may no longer be available.
Reviewed has partnered with CardRatings for our coverage of credit card products. Reviewed and CardRatings may receive a commission from card issuers.
Other top credit card options
Common credit card terms
Balance transfer: A process that lets you move debt from one credit card to another. This can help you save money and simplify payments, though you may have to pay a balance transfer fee and a special APR on these transactions.
Cash advance: A short-term cash loan against your credit card. You can usually withdraw the money at a bank or ATM up to a certain limit. Although you access cash in a pinch, you may have to pay a cash advance fee and a special APR on these transactions.
Credit limit: The maximum amount you can charge to your credit card. Once you hit the credit limit, you need to pay down some or all of the balance before the issuer replenishes your credit line.
Late payment: A credit card payment that's made after the due date or is less than the minimum payment required. The card issuer may charge you a late fee and could report the late payment to the credit bureaus. A large part of your credit scores is based on payment history, so it's important to always make on-time payments.
Easy steps to build your credit history
Make at least the minimum payment on time. Timely payments are the biggest factor that contribute to your FICO score, accounting for 35%. Set a calendar alert so that you don’t have another task on your mental to-do list, or set up automatic payments to take the stress away altogether. It’s like a personal assistant—without the price tag.
Be mindful of your credit utilization. This percentage is how much of a balance you carry compared to your available credit line. Experts recommend keeping it at less than 30%, meaning if your credit limit is $6,000, have no more than $1,800 as a balance.
Keep tabs on your credit reports and credit score. Your credit card issuer may provide monthly reporting, or there are other ways to check your score for free. One in four credit reports have mistakes that can negatively impact your credit score. Be on the lookout for wrong addresses, outdated information, and high balances that may be a sign of identity theft.
Don’t have a credit card? You may still have a credit score, and there are ways to build your history even if you don’t have one in your wallet.
Other things to know about credit cards
Long introductory period APR rates are only a short-term incentive. Potentially high APR rates snap into effect after the card’s intro period ends, which could cost you a lot in interest if you’ve left your balance unpaid. It’s really important—especially when getting a card for a big purchase—to keep an eye on your finances, and keep an eye on the calendar.
APR rates and credit limits vary based on your individual credit. Credit limits and interest rates for each card are determined based on each cardholder's personal situation, so we did not take that information into account when evaluating this card. Remember to pay your bill in full every month, so you will not be charged interest.
Banks have final say on who they accept for a credit card. These recommendations were put together with the assumption that applicants would have average credit or above. That being said, banks decide who they will issue credit cards to using criteria including, but not always limited to, an individual's credit score when evaluating each applicant.
This article originally appeared on Reviewed: The best secured credit cards of 2021: Reviewed