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If you’re looking to build credit, odds are you’ve come across secured cards in your search. A secured card is similar to a regular, unsecured credit card, but it has one main difference: It requires a security deposit. The security deposit will become your line of credit and is typically $200 — so that means you will receive a $200 line of credit.
The security deposit acts as collateral in case you default on your account, providing security for the lending bank. In most cases, you can receive your security deposit back if you pay off your bill in full and close your account or you transition to an unsecured card.
If you want a larger credit limit, you will need to deposit more money — however, there are some cases where you don’t need to deposit more money to get a larger credit limit, such as making your first five monthly payments on time with the Capital One® Secured Mastercard®.
We’ll review the best secured cards with no annual fees, so you can choose the card that’ll provide the most benefit for your needs.
Best secured credit cards
|Best overall secured card||Discover it® Secured|
|Best low deposit secured card||Capital One® Secured Mastercard®|
|Best no-frills secured card||Citi® Secured Mastercard®|
Best overall secured card: Discover it® Secured
2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.
Credit line will equal your security deposit of $200 or more*
No annual fee, no late fee on your first late payment. No penalty APR*
- No Annual Fee, earn cash back, and build your credit with responsible use.
- It’s a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
- Establish your credit line by providing a refundable security deposit from $200-$2500 after being approved. Bank information must be provided when submitting your deposit.
- Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
- 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
- Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
- We automatically match all the cash back you’ve earned at the end of your first year.
- Receive FREE Social Security number alerts - Discover will monitor thousands of risky websites when you sign up.
- See Rates & Fees
See additional details for Discover it® Secured
Best for: If you’re looking for a well-rounded secured card with a typical $200 minimum security deposit and more features than any secured card we could find, the Discover it® Secured is for you.
Why we like it: The Discover it® Secured earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases. Plus, Discover will automatically match all the cash back you earn at the end of your first year. The cashback program adds significant value to this card since the majority of secured cards lack rewards. When used responsibly, the Discover it® Secured allows you to both build credit and earn rewards.
Other benefits: Cardholders can benefit from fraud monitoring services, 100% U.S.-based customer service available 24/7, no foreign transaction fees and more when you use your card.
How to transition from a secured card to an unsecured card with Discover: Discover makes the transition from an unsecured card to a secured card fairly simple compared with other secured cards. Starting eight months from account opening, Discover will automatically review your account to see if you can be transitioned to a card without a security deposit (i.e. a regular credit card). If you qualify, your security deposit will be refunded. Keep in mind the account reviews are based on various factors, including responsible credit management across all of your credit cards and loans.
Read our full review of the Discover it® Secured.
Best secured card for a low deposit: Capital One® Secured Mastercard®
Build Credit When Used Responsibly
$49, $99, or $200
- No annual fee, and all the credit building benefits with responsible card use
- Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
- You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness
- Get access to a higher credit line after making your first 5 monthly payments on time with no additional deposit needed
- Easily manage your account 24/7 with online access, by phone or using our mobile app
- It's a credit card accepted at millions of locations worldwide
See additional details for Capital One® Secured Mastercard®
Best for: If you’re someone who wants to build or rebuild credit but is strapped for cash, you may benefit from the potentially low minimum security deposits of the Capital One® Secured Mastercard®.
Why we like it: The security deposits are either $49, $99, or $200 — and if you qualify for one of the lower deposits, you still receive a $200 credit limit. This is helpful if you’re someone who may not be able to afford the $200 security deposit. However, you are not guaranteed the lower security deposits. Capital One takes various factors into consideration to determine your creditworthiness. There is also the chance to receive a higher credit limit without needing to deposit any more money by making your first five monthly payments on time.
Other benefits: Additional perks include auto rental insurance, travel accident insurance, price protection and more.
How to transition from a secured card to an unsecured card with Capital One: Capital One automatically reviews your account periodically to check for on-time payments and if you’re eligible for an upgrade to an unsecured card. If eligible, your security deposit will be refunded. The catch to the transition process is that there is no time frame for when you may be upgraded to an unsecured card per Capital One as it depends on various credit activities.
Read our full review of the Capital One® Secured Mastercard®.
Best no-frills secured card: Citi® Secured Mastercard®
Monthly reporting to the three major credit bureaus
Auto Pay can help you stay on top of your bill
Use your card anywhere that accepts Mastercard®
- No Annual Fee, and unlike a prepaid card, it helps build credit history with monthly notifications to the credit bureaus
- A security deposit is required for this product (minimum $200)
- Pay your bill on time every month to avoid damaging your credit. Citi can help keep you on track with Auto Pay, online Bill Pay and alerts.
- Use the card anywhere Mastercard® is accepted — worldwide
See additional details for Citi® Secured Mastercard®
Best for: If you’re someone who easily gets tempted by rewards and who wants a no-frills secured card, the Citi® Secured Mastercard® is a decent choice for building credit.
Why we like it: The Citi® Secured Mastercard® is relatively basic with an average $200 minimum security deposit and the foundation to build credit. Take the lack of rewards as a way to build credit without being tempted to overspend just to earn cash back. If you put in the effort and follow the credit building tips mentioned above, you can be on your way to an improved credit score.
Other benefits: There are no rewards or noteworthy perks for cardholders, but that won’t be a problem if you only want to focus on building credit.
How to transition from a secured card to an unsecured card with Citi: Your security deposit will be held in a Collateral Holding Account for 18 months, and prior to end of the 18-month term, Citi will notify you on the status of your account. You may be transitioned to an unsecured card and receive your security deposit back. Whether you’re transitioned or not depends on your account history and various credit factors.
Read our full review of the Citi® Secured Mastercard®.
Learn more: How to build credit with a secured card
Secured cards are a great way for you to build (or rebuild) credit. By following a few simple practices, you can see your score improve over time and be on your way to an unsecured card.
Follow these tips to build credit:
- Use your card each month. The only way to build credit is to use your card, simply having an open account won’t suffice. You can add a recurring charge to your card like Netflix or Spotify so you ensure there is activity on your card each month.
- Pay on time and in full each month. Payment history is the most important factor of your credit score. It’s important to always pay your bill on time and in full so that good payment history is reported to the credit bureaus and you’ll avoid late payment fees and interest charges. Autopay is a simple way to make payments hassle-free.
- Keep a low credit utilization. The amount of credit you use versus your total available credit is known as utilization. This is a major factor in determining your credit score and it’s key to keep it as low as possible — we recommend below 30%. For example, spend less than $60 on a secured card with a $200 credit limit.
How we chose the best secured cards
We chose secured cards with no annual fee, typical minimum security deposits and a simple transition to an unsecured card. Cards with additional perks like rewards or insurances were ranked higher.