The Best Secured Credit Cards of 2021: Credit Cards With No Credit Check
With most of the emphasis in the credit card space being devoted to increasing your credit score, and getting a card with the lowest rate and/or best rewards, an entire market segment is often ignored–people with poor credit, or no credit at all. For this very large segment of consumers, the focus needs to be on finding the best secured credit cards. They represent a starting point: a place to begin building or rebuilding your credit rating.
We’ve looked at dozens of secured credit cards to determine which will be the greatest benefit to the largest number of people. We’ve come up with five, but the best of the lot is the Capital One Secured MasterCard.
According to Experian, one of the three major credit bureaus, 66% of consumers have a credit score deemed to be “good” or better. That loosely translates into a credit score of 670 or higher, which will generally be high enough to get traditional credit cards. But that also means that a full 34% of consumers have a credit score that’s considered fair or poor. That generally translates into a credit score below 670 (or below 580 in the case of poor credit).
That means tens of millions of people may not be able to get a traditional credit card and may need to make a serious effort to improve their credit scores. Secured credit cards are one of the best ways to do this, for the following reasons:
- You can qualify for a secured credit card even with fair or poor credit.
- For the most part, you’ll be approved for the card based on your security deposit.
- Issuers of secured credit cards typically report your payment history to all three major credit bureaus. If you make your payments consistently on time, that will improve your credit score with each bureau.
- Some secured credit cards let you transition to a traditional unsecured credit card once you’ve met certain payment requirements.
- Once you improve your credit score–as a result of using secured credit cards–you’ll eventually be able to qualify for traditional non-secured credit cards and get better interest rates on other loans, like auto loans.
With those benefits in mind, let’s move on to our list of the best secured credit cards of 2021.
Our Top Pick | Capital One Secured MasterCard
With a lower deposit requirement and no annual fee, the Capital One Secured MasterCard is one of the best cards on the market if you need to get going without putting a bunch of money down up front. And if your goal is to increase your credit score quickly, this card could help. They regularly evaluate your account if you make on-time payments to see if they can raise your credit limit. A higher limit and low balance mean good things for your credit score. Wish to learn more about this offer, check it out here.
Runner Up | Open Sky Secured Visa
This card actually has a $35 annual fee, which we don’t love, and a 19.64% variable interest rate. With that said, it’s an excellent option for those with absolutely no credit or terrible credit history. They don’t even check your credit score, and your flexible credit limit is based solely on how much money you put down up front. So this isn’t the best card for long-term use, but it’s a great option for increasing your credit when it’s in the hole.
Our Selection Methodology
Since there are so many secured credit card offers available today, it can be difficult to narrow down those that warrant a “best” consideration. In our evaluation of the best secured credit cards, we used the following checklist:
- Credit requirements
- Credit limit offered
- Security deposit required
- Annual fee
- Interest rate range
- Rewards and other perks
In selecting the best secured credit card for you, look at all the factors above, plus any others you consider important.
Top 4 Best Secured Credit Cards of 2021
1. Capital One Secured Mastercard
What makes Capital One Secured Mastercard stand out is that it has potentially the lowest security deposit requirement. The maximum initial credit limit is $200, and while the security deposit requirement may be $200, it can also be $49, or $99. So you could get at least a partially unsecured credit line. This is especially great if you’re low on cash but still want to work on building your credit score.
The specific amount of the security deposit requirement will depend on your creditworthiness. Obviously, the better your credit score, the lower the deposit requirement will be. And you can increase your credit line at any time by increasing your deposit. But Capital One also regularly evaluates your account to consider raising your credit limit. They could decide to raise it after you make just five on-time payments in a row.
Capital One Secured Mastercard features:
- Credit requirements: New and poor credit
- Credit limit offered: $200
- Security deposit required: $49, $99 or $200
- Annual fee: $0
- Interest rate: 26.99% APR
- Rewards and other perks: Access to higher credit limit after your first five on-time monthly payments. Also comes with auto rental collision damage waiver and no foreign transaction fees.
2. OpenSky Secured Visa Credit Card
What makes OpenSky Secured Visa Credit Card unique–and perfect for those with bad credit–is that OpenSky doesn’t even check your credit when you apply. Your eligibility is determined strictly on your security deposit, not your credit score.
So this is a particularly good option if you have no credit history or a very low credit score.
The security deposit is referred to as the Pledged Deposit Account, which is refundable and held on deposit by Capital Bank, the issuer of the card.
One notable disadvantage with this card is that it will always be a secured card. There is no provision to convert it to an unsecured card.
OpenSky Secured Visa Credit Card features:
- Credit requirements: Bad credit
- Credit limit offered: $200 to $3,000, depending on the security deposit
- Security deposit required: $200 to $3,000, as described above
- Annual fee: $35
- Interest rate: 19.64%
- Rewards and other perks: Email alerts; security deposit is FDIC insured, and fully refundable.
3. Primor Secured Visa Gold Card
This card from Green Dot has no specific credit score requirements, and it doesn’t have any processing or application fees. You can choose your line of credit depending on your deposit, which can range from $200 to a whopping $5,000.
And this card has a fairly low interest rate, for a credit card, at 9.99%.
The main drawback of this one is its steep annual fee of $49. It reports to all three national credit bureaus, but it doesn’t advertise an option to automatically switch to a regular credit card after responsible use.
Primor Secured Visa Gold Card features:
- Credit requirements: None
- Credit limit offered: $200 to $5,000
- Security deposit required: $200 to $5,000
- Annual fee: $49
- Interest rate: 9.99%
- Rewards and other perks: Auto rental insurance
4. Another Option: Green Dot 5% Cash Back
What if your issue isn’t that you want to build credit but that you actually want to manage your money better? If this is the case and your bad credit is keeping you from opening a bank account, check out the Green Dot 5% Cash Back card. This prepaid Visa debit card lets you run direct deposit to your card, has a straightforward fee plan, and offers 5% cash back rewards, up to an annual maximum of $250.
This card costs $9.95 to use, and only has additional fees for a few actions like cash withdrawals, balance inquiries, replacement cards, and foreign transaction fees.
The Green Dot 5% Cash Back Card features:
- Credit requirements: None
- Credit limit offered: None. Not a secured credit card.
- Security deposit required: None
- Monthly fee: $9.95
- Interest rate: 0%
- Rewards and other perks: 5% cash back up to $250 per year. Direct Deposit services. Simple fee plan.
Even though most secured credit cards function in a similar way, each has its own advantage over the other cards. You may want to choose a card based on a specific benefit where it stands out ahead of the pack.
Here is our evaluation of where each of the cards on our list makes the top spot:
- Best for rewards: Green Dot 5% Cash Back Visa
- Best for building your credit line: OpenSky Secured Visa Credit Card
- Best for low security deposit: Capital One Secured Mastercard
- Best for low interest rate: Primor Secured Visa Gold Card
- Best for bad credit: OpenSky Secured Visa Credit Card
- Best for managing all your money: Green Dot 5% Cash Back Visa
- Best for moving to non-secured card: Capital One Secured Mastercard
Factors to Consider
In some respects, secured credit cards function just like ordinary credit cards. But since they are actually credit builder cards, you’ll have to be prepared to handle the arrangement a bit differently. After all, secured credit cards come with more limitations than traditional cards. You have to be aware of those limitations when you’re shopping for a card.
- You’ll need to be able to come up with the security deposit: This is generally no more than $200 or $300, but it’s the most critical piece in the secured credit card arrangement.
- You need to be able to make your monthly payments on time: Late payments will be reported to the credit bureaus, further lowering your credit score.
- Credit limits are low: That’s not accidental. Since you’re considered a higher credit risk, lenders will start you out with a very low credit limit. It’s usually tied to your security deposit, which is an additional constraint. So you’ll have to be prepared to work within that low credit limit.
- You may want to add a second secured credit card: If a positive payment history on one secured credit card will improve your credit score, the improvement will be multiplied by adding an additional card. Just make sure you wait at least 6 months or a year before adding the second card. You don’t want to take on more debt than you can comfortably handle.
- Plan to pay off your balance monthly: The interest rates charged on most secured credit cards are very high. But if you pay off your balance in full each month, you’ll avoid paying those steep interest charges and keep your debt-to-credit ratio lower, which is great for your credit score.
- Make sure the security deposit is refundable: It’s typical that the deposits on secured credit cards are refundable. But pay close attention to the fine print. There may be a provision that enables the issuer to retain part or all your deposit on a very small number of cards.
Final Thoughts on the Best Secured Credit Cards of 2021
Secured credit cards don’t compare with traditional unsecured cards, so you have to change your perspective a bit when shopping for one. The primary purpose of these cards is to enable you to either build credit or rebuild bad credit. And in that capacity, they work as planned. Even though they have low credit limits, and require security, as long as you make your payments on time, you’ll be building a good credit reference.
If you have no credit or bad credit, you absolutely need some good credit behavior to get your credit score up. Some cards offer a few more perks than others, but you have to choose the card that will work best for you. Look closely at the annual fee because it will have a bigger impact since your credit limit is smaller.
And just as important, as your credit score begins to improve, you should look to either convert the secured card to an unsecured one or use your better credit score to apply for a traditional credit card. If used properly, a secured credit card should be only a temporary arrangement.