Even though credit card companies make money on consumers who use them poorly, a consumer with poor credit will have a very hard time getting approved for an unsecured line of credit. One of the few ways someone with a bad credit history can improve their credit score is by signing up for a secured credit card. A secured credit card is similar to an unsecured credit card except for one key fact. Secured cards require an initial deposit. If a cardholder doesn’t make payments, the credit card issuer can simply draw from the deposit.
Unfortunately, many secured credit card include high fees and unfavorable card terms. As a result, finding a quality secured card can be difficult. This is a short list of the best secured credit cards available for consumers today from our list of credit card offers for 2014. Fees, rewards and overall usability were taken into account when organizing this list. All of the cards listed here report to the three major credit bureaus, so if used wisely they will be helpful in building or repairing your credit.
Best Secured Cards
Discover it® Secured Credit Card – No Annual Fee: This card reports to all 3 credit bureaus. Minimum security deposit of $200 required. Discover will review the account after 12 months to determine if the security deposit requirement can be waived.
Capital One® Secured MasterCard®: Based on your credit worthiness, you’ll receive a $200 credit limit after making a security deposit of $49, $99 or $200. There is no annual fee, and Capital One reports your payments to all three credit agencies. Get more details here.
For someone building or fixing their credit — an important factor when you need to acquire a loan or mortgage within a year or two — secured credit cards are good options when unsecured cards are unavailable for any number of reasons. The fees or high interest rates, as listed above, do not make these cards great options for everyday spending. Those who do need a secured credit cards should think about moving to unsecured credit as soon as possible, and as listed above, some of these cards make that transition process simple.
Updated August 18, 2016 and originally published March 18, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.