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Secured Credit Cards

Secured credit cards help people with bad credit or little or no credit. Build or rebuild your credit with a credit card secured by a security deposit.

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Disclaimer: The information for the Capital One Platinum Secured, Citi® Secured Mastercard®, and Discover it® Secured has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

Secured Benefits

Benefits: Why Use a Secured Credit Card

Secured credit cards have some distinct benefits that distinguish them from unsecured cards.

  • They fulfill a need: A secured card may be the only option for someone with no credit or a poor credit history. In today’s world, a credit card is more of a necessity than a luxury, so such a card could be incredibly valuable to someone with a poor credit history who has been frustrated by their limited payment options.

  • They provide a way to build or rebuild credit: Getting a credit card and keeping current on your payments are good ways to help you build credit history. You couldn’t do that with just a prepaid debit card.

  • Low credit limit: The standard deposit and credit limit on most secured credit cards is in the $300 to $500 range. If you have difficulty keeping your spending in check, these cards will help you stay in line.

Drawbacks: What to Watch Out For

Secured cards have a very specific target market and very specific drawbacks.

  • The cards are restrictive: While the restrictiveness of secured cards is a benefit for helping people responsibly build or rebuild credit, it’s definitely a drawback as well. You’re most likely limited to spending a few hundred dollars on the card each month.

  • Money has to be deposited: Setting aside several hundred dollars as a deposit may be easier said than done for many people. Once this money is deposited, it’s used by the credit card company as collateral, meaning you can’t use it for any reason, not even to pay your credit card bill. That’s a lot of money to set aside just for the privilege of having the card.

  • Hefty fees and interest rates: Secured cards come with more fees than unsecured cards. Between these fees and the deposit you have to make, secured cards are a lot more expensive to own than unsecured cards, which is even more reason to actively work toward the goal of getting qualified for an unsecured card.

Secured credit cards are valuable tools for people who wouldn’t be approved for other types of credit, including the more common unsecured cards. They’re a way to build credit history while providing many of the same conveniences that other credit cards provide. Just like you would do before selecting any other type of credit card, though, make sure to do your research to decide which secured credit card is the best fit for you.

About CreditDonkey
CreditDonkey is a credit card comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

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