Living life without a credit card is not impossible but tough. If you want to rent a car or make travel reservations you will need a credit card. Unfortunately, if you have no credit or bad credit getting a credit will be difficult.

What kind of charges will there be?

5556461 - one wrinkled dollar isolated on white background

Secured credit cards usually have high interest rates and monthly or yearly fees.  Make sure to find the best card for you. Review all secured credit cards for terms and conditions. Look for key factors such as fees first and foremost. Interest rates are important however, if you do not carry a balance with your secure card and the interest rate will not matter. Try to avoid cards that charge add-on services you do not need like insurance.

How much money do I have to deposit?

In situations like these, you will want to try to get a secured credit card. Secured credit cards are credit cards that require you deposit the amount of cash with your creditor that will become your balance. For example, if you deposit $500, then your credit limit will be $500.

Some secured cards will have minimum and maximum deposits and/or balances. A common minimum is $200 which will require you to save enough to make the deposit.

What happens to the money deposited?

It might not make sense to give a creditor money to “hold” and you still have to pay a credit card payment every month. But, at this point don’t concern yourself with the details or if it makes sense. This is one of the things you must do to repair your credit. When you close the account you will get your deposit back so the money is not gone forever. But, you will not have access to it while the card remains open.

What tips do I need before getting a secured credit card?

14308078 - 3d businessman with idea lightbulb on his hand over white background

Try to avoid cards that report as a secured credit card. The secure flag could potentially hinder your credit repair moves. If you find the card does not report to all three bureaus, then look for another card. Be sure you are getting a secured credit card and not a prepaid card.

Prepaid cards tend to have hefty fees which are not disclosed to you until you start using it. Also, prepaid cards do not build credit. Prepaid cards will usually have a Visa or MasterCard logo but this does not mean they are building credit. The Visa and MasterCard logo only tell you who processes the payments made with the card.

Do all banks offer secured credit cards?

Not all banks offer secured credit cards, but that should not stop you. You can check with your bank to see if they do offer secure credit cards. If you are planning to open a Wells Fargo second chance banking account this is a good option. Wells Fargo offers a secure card that can “graduate” to an unsecured card. However, there are several options for secured cards available regardless of if you open a Wells Fargo account.

How can I make the best use of a secured card to build my credit rating?

Pay the card off every month! Only purchase budgeted items like gas or groceries. You should not carry a balance with this card. If you pay the card off every month you will also avoid paying interest fees. This is especially beneficial since the interest rates are usually high. You do not have to keep these cards for long, just long enough to establish credit and get an unsecured card.

If for some reason you carry a balance, make sure it is less than 20% of the total credit limit. 20% of $200 is $40 so if you carry balance, make sure it’s below this amount.

How long does it take to qualify for an unsecured card?

The time it takes you to get an unsecured card will vary based on your credit history. Make sure you are keeping track of your credit history on one of the free credit reporting sites. The worse your credit is when starting on your credit repair journey the longer it will take. But, the uncertainty should not prevent you from trying. If you do nothing, then rebuilding your credit will definitely take a long time.

If your monthly expenses exceed your monthly income – you will not qualify for any secured credit card.

Where can I get a secured credit card?

22039302 - bank, credit, shop, map, credit, master, payment, purchase, retail, finances.

Realty101blog will list a few of the better secured credit cards here. However, these are not the only cards available. Regardless if you use one of the cards below make sure to check the fees charged for all cards. And again, to make the best use of the card, do not carry a monthly balance.


Discover Secured Credit Card is a top pick for a number of reasons.

  1. There is no annual fee.
  2. The minimum deposit is $200 and the maximum is $2500. Depending on your situation, the minim is too high or the maximum is too low. Make sure to have your bank account handy when you apply and be ready to make the deposit immediately. If you want to increase your credit line you will need to apply after your first billing cycle and add additional money to the account.
  3. Discover will automatically check your eligibility to upgrade to an unsecured card approximately seven months after opening you’re account. If you miss a payment, there will be no late fee the first time and missing a payment will not increase the annual percentage rate (APR). But, do not chance it. Follow tips like paying the balance off every month and NEVER having a late payment. When the transfer occurs you will retain all of your reward points. Discover lets you keep all the benefits of the excellent payment history by not opening a new account when you get the new unsecured card.
  4. You can earn cash back which is unheard of for a secured credit card. The program allows you to earn 2% cash back on up to $1,000 worth of spending per quarter on restaurants and gas, and 1% on all other spending.
  5. You get a free FICO Score on your monthly statement. FICO represent a more accurate credit score than a Vantage score because more people use a FICO score to determine credit worthiness.

You MUST have a bank account to qualify for this card. The initial payment will have to come from a checking or savings account.

While the APR is not the lowest, 23.34%, try to avoid making this a factor. If you pay off your balance every month you will never pay interest on the things you charge.

Any pending, non-chapter 7 bankruptcy will prevent you from being approved. But, a Chapter 7 bankruptcy on your credit history will not prevent you from being approved.

Citi Secured MasterCard

Citi Secured MasterCard has great features such as

  1. There is no annual fee.
  2. Capital One starts off with an initial credit line of $200. But, there are three different security deposit amounts, $49, $99, and $200. Your credit worthiness determines the amount you deposit. If you want a larger credit limit you can deposit more money – up to $3000. You have 80 days from approval to make or add to the security deposit.
  3. Capital One does not indicate you can graduate to an unsecured credit card. However, after you make 5 monthly payments you are eligible for a higher credit line with no additional deposits. Capital One will not increase your APR if you miss a payment, but it is possible your APR will increase at a later date.
  4. Capital One will give you access to CreditWise which allows unlimited access to your Vantage credit score.

You MUST have a bank account to qualify for this card. The deposit(s) must come from a checking or savings bank account.

The APR on this card is 24.99%, but again, try to pay the balance off every month.

If you have a bankruptcy that is not yet discharged, you will not be approved for the card.


OpenSky credit card is a good option if you are particularly credit challenged or you don’t have a bank account.

  1. There is no credit check!
  2. You can deposit between $200 and $3000. Whatever amount you deposit is the amount of your credit limit.
  3. This card does not offer any real benefits. However, your first billing cycle is interest free. As long as you continue to pay the balance in full every month by the due date your purchases will remain interest free.
  4. The interest rate on this card is lower than the previous two mentioned here at 17.64%. This card does come with a penalty rate 21.75% that will last indefinitely or until you make 6 consecutive on time payments after the rate increase.

The creditor does have an annual fee of $35. This is not bad considering even some of the “good” credit cards have fees of $50 – $450 a year.

This card will not graduate or increase your credit limit, but because it reports to the three bureaus it will help improve your credit.

Honorable Mentions

Although these three are great cards you should also check with your credit union or bank about the availability of a secured credit card.