Bad Credit? Rebuild it With These Secured Credit Card Offers

One of the fastest ways to build up your credit is to use a credit card.

However, if you have little or no credit history, flat-out bad credit, or if you have a poor credit rating, it can be difficult to qualify for an unsecured credit card (unsecured means you don’t have to have any money put away as insurance, or collateral, for any purchases you make — it’s what most credit cards are).

Creditors have stepped up their lending standards, and you might not have such an easy time getting a credit card that isn’t secured by some type of asset.

This is where secured credit cards can come in handy.

Secured credit cards are tied to a deposit account, so an issuer feels more comfortable about letting you use a credit card (you put away money to be used by the secured credit card issuer in case you don’t pay your bill).  The deposit account is usually something like a savings account or a certificate of deposit (CD).  Your payment history on a secured credit card is reported to the major credit bureaus, so if you are responsible, you will see an improvement in your credit.  As your credit improves, you can shift to an unsecured card with a lower interest rate, more benefits, and get your “security” back.

If you need to build your credit, make sure you consider among the best secured credit cards to make sure you have a tool that will best help you move to an unsecured card.

How Do I Choose a Secured Credit Card?

secured credit cards help with your bad credit

Using these secured credit cards for bad credit can help you increase your credit score and improve your credit history.

The most important thing to remember when choosing a secured credit card is that you shouldn’t mix it up with a prepaid debit card.

It can be easy to mix them up, since both have the well-known credit card logos, and you have to make some sort of deposit in order to use them.  A prepaid debit card will not report your payment behavior to the three major credit bureaus.  This means that it will do nothing to help you build good credit.

The very first question you should ask about a secured credit card is whether your payment history will be reported; next, you should find out how often it will be reported.  Ideally, the issuer will report every 30 days.

Other considerations when choosing a secured credit card include:

  • FDIC protected deposit: Make sure that the issuing bank is FDIC insured.  You want your security deposit protected from loss in the event of a bank failure.
  • Interest rate on deposit account: Since you are making a deposit into a savings account to serve as collateral, you should find out what your return will be.  Citi offers fairly competitive yields on its savings account.  However, realize that the interest rate will most likely be on par with what you would earn at any brick and mortar bank. Take into consideration any benefits you might receive in lieu of interest on your deposit.
  • How long it will take to qualify for an unsecured card: You should find out how long it takes to qualify for an unsecured credit card.  Most cards will require at least nine months, and many won’t let you switch until you have been responsible for at least a year.
  • Fees and other charges: Many secured credit cards require set-up fees, and may also charge monthly fees or annual fees.  Find out what sorts of fees the card charges, and when you will have to pay them.
  • Minimum deposit: Ask about the minimum deposit, and what sort of credit line it will result in. Many cards will give you a credit line equal to the amount in your savings account.  Find out, too, what happens if you withdraw money from your savings account, since that can impact your credit line, or result in fees.

Here are some great options in some of the best secured credit card offers:

Platinum Zero® Secured Visa® Credit Card from Applied Bank®Platinum Zero® Secured Visa® Credit Card from Applied Bank®: When was the last time any credit card offered you 0% on purchases?  Sure, you can get a 0% introductory fee, but the Platinum Zero Secured Visa Credit Card from Applied Bank offers a true 0% purchase rate on your card.  In fact, if you make a late payment, your rate stays at 0%.

Additionally, there is no set-up fee, as you might see with some secured credit cards.  You can deposit between $500 and $5,000 in an Applied Bank savings account to get started.  Your credit limit corresponds to how much money you deposit.  There are also timely credit bureau reports.

Of course, the Platinum Zero Secured Visa has to make up for this generosity somehow.  Because of the generous 0% APR, you will not be earning interest on the collateral you deposit.  The card comes with a monthly fee of $9.95.  That adds up to $119.40 per year.  Additionally, there is a 9.99% variable rate on cash advances from this card.  You should avoid getting a cash advance at all costs, if you can (this is a general rule for any credit card).


Applied Bank® Secured Visa® Gold Credit CardApplied Bank® Secured Visa® Gold Preferred Credit Card: Another offering from Applied Bank, this secured credit card comes with a 9.99% fixed APR.  There are no monthly fees and there is no set-up fee (there is a $50 annual fee).  You can deposit as little as $200 in the savings account to get started, and deposit up to $5,000.  You are guaranteed approval regardless of your past credit history.

Like the Platinum Zero card, the Secured Visa Gold card won’t charge you a higher rate if you are late making your payments (but you may be charged a late-payment fee).  However, it’s important to pay on time, since Applied Bank will make regular reports to the major credit bureaus (remember, the quicker you increase your credit, the quicker you can switch to an unsecured card).

You should be aware, though, that the Secured Visa Gold credit card does not offer a grace period for purchases. Instead, you will start accruing interest on your purchases the day after you make them.  This makes timely payment of the card vital.  [Seriously.  When you make a purchase, go and pay it off ASAP.  This will also help your credit.]   The longer you wait to pay on the credit card, the more you will pay in interest.  You will also not earn interest on the money you deposit with Applied Bank.


USAA Secured Platinum American Express CardUSAA Secured Platinum American Express Card: When you apply for this card you will be opening up a 2-year Certificate of Deposit (CD) with USAA.  This acts as security for your card and also determines your card’s limit (the more you open a CD with the higher your credit limit).  You will also earn interest as you would expect with a CD.  The minimum initial deposit to open is $250 (you can put in up to $5,000).  Of course the money in your CD is yours so long as you don’t default on your credit card payments.

There is an annual fee of $35 for this card and no application fees.

The APR is currently 9.9% and varies with the Prime Rate.  There is no penalty APR

When you start your application USAA will ask you some eligibility questions.  This is because USAA is primarily for those in the military and veterans.  If you aren’t eligible as a military member you may still be eligible for their credit cards.

Because this is an American Express card you also get benefits from them such as emergency assistance, roadside assistance, and concierge service.  You also have liability coverage if you card is lost or stolen.  Check with the card for specific terms and restrictions.


Capital One Secured MasterCardCapital One® Secured MasterCard® Credit Card: The Capital One Secured MasterCard is attractive because it requires a refundable security deposit, based on your current credit rating.  The deposit levels are $49, $99 and $200.  Your credit line is between $200 and $3,000, depending on your credit history, and the deposit you pay.  With a $49 deposit, you can get a $200 limit to start.  This is an upgrade from only having as much credit as you have in the connected savings account.  Additionally, you can earn credit line increases as you show your level of responsibility.  As you prove yourself, Capital One will eventually shift you to an unsecured card.

The Capital One Secured MasterCard comes with a $29 annual fee.  However, this rather low annual fee is offset by a fairly steep interest rate of 22.9%.  Additionally, Capital One offers you the opportunity to enroll, for free, in the CreditInform program to help you track your credit information and get access to credit tools.


National Express® Secured Visa® Credit CardNational Express® Secured Visa® Credit Card: Open up an FDIC-insured account with Applied Bank and your account can secure a Visa credit card from National Express.  The amount you deposit, from $200 up to $5,000 matches the amount of your credit limit.

There’s no credit check to get the card and as such, no minimum credit score is needed (you are trying to build up your credit after all).  Not though that there isn’t a grace period for this card.  Pay off your card ASASP or you accrue interest charges.  This is a great incentive to make sure you pay off your card fast which is what you want to do to build up credit.

There’s a fixed APR of 9.99% that won’t go up even if you pay late.  Just understand that you will still be charged late fees.

Since this is a Visa® card it is accepted at millions of locations.  You also get the benefits of having your activity reported to the credit bureaus (this is good so long as you pay on time).

There is an annual fee of $50 which is charged to you when you open your account (so your initial credit limit is your deposit minus $50).

To Sum Up

A secured credit card can be an excellent tool in building, or re-building, your credit.  However, you need to use it carefully.

Additionally, you should do what you can to show responsible credit behaviors, since secured credit cards come with more restrictions, and are costlier, than unsecured cards.

And remember, when you use secured credit cards for bad credit you want to be on your best credit behavior!

Your goal should be to move on to an unsecured credit card as soon as possible.

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Published or updated December 23, 2014.


  1. Jessica Johnson says:

    I was able to raise my credit score after I got a couple of secured credit cards who reported to the credit bureaus. Great article and thanks for the write-up!

    • How long does it take to raise your credit score?

      • Beverly, I’d give it at least two months to start to see any changes. But there are a number of factors that go into your credit score and it really depends on how you use your credit and how responsible you are with paying it off on time.

    • Similar to Jessica, we also used secured credit card when our credit scored plunged down due to credit card debt and personal loans. It did not only helped us increase our credit score but also taught us how to handle our finances better.

  2. Secured credit cards are a very good strategy for folks that have recently gone through a bankruptcy, too. Even though the bankruptcy is on their credit report for 7-10 years, using the secured cards RESPONSIBLY to rebuild their credit will show creditors that you have have learned your lesson much quicker that simply waiting until the bankruptcy falls off your credit report. Thanks for the research on the best cards. I will pass the info along.

  3. Good post on rebuilding credit history. What is equally important is to use the credit card effectively and try to avoid situations which leads to bad credit history in the first place!

  4. In order for my to raise my credit score I did a lot of small payments with my credit card and then from that I was able to make my credit score raise. They were not large loans but these small charges on the card really helped.

  5. Michele Candyy says:

    After all this while i have contacted so many credit score repairers, no one could save me but i found on this forum and i tried his service, to my greatest surprise he increased my score to 790 just as he said he is going to do for me, now he has saved me and my family and we are indeed much thankful for this

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