The best secured cards can help build (or rebuild) credit history fast for young adults and in a cost-effective way.
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What is a Secured Credit Card?
If you are looking to help build credit history from scratch or rebuild credit after an unfortunate setback, applying for a secured credit card to help build credit fast can be the way to go. Secured cards that can help build (or rebuild) credit fast require you to provide a cash security deposit, usually equal to your credit line. The card-issuing bank holds the deposit in case you don’t pay your bill; you do get your deposit back when you upgrade to a regular “unsecured” card or close the account in good standing. Since the deposit protects the issuing bank from losing money, secured cards are easier for people with bad credit or no credit to qualify for.
As you use the secured card to help build credit history, the issuing bank reports your activity to the three credit bureaus – the companies that compile the credit reports. These credit reports will form the basis of your credit scores. Keeping your balance relatively low and paying your bill on time every month, will help you to strengthen your credit.
At the end of the day, the best secured cards that can help build (or rebuild) credit fast with is the lowest cost one that you can get approved for. A secured card’s deposit is fully refundable, and your top priority should be to build credit inexpensively. Fortunately, there are several no-fee (or low-fee) secured credit cards to build credit with.
Secured cards report to the major credit bureaus each month, just like unsecured cards, and the credit reports do not make a distinction between secured and unsecured credit cards. Your goal should be to qualify for a decent unsecured card in about a year’s time by learning to use your secured credit card responsibly. Responsible use generally means on-time monthly payments and not maxing out your spending limit.
Along with secured cards, please click here for other strategies that can be implemented at the same time (in parallel) to help build credit history fast.
Top 5 reasons to apply for a secured credit card:
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Building Credit History: Secured credit cards are ideal for individuals looking to establish or rebuild their credit history. By making timely payments and managing their credit responsibly, cardholders can demonstrate creditworthiness over time.
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Limited Credit History: For individuals with limited or no credit history, secured credit cards offer a valuable entry point into the world of credit. These cards provide an opportunity to start building a positive credit history, which is essential for future financial endeavors like renting an apartment or applying for a loan.
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Credit Score Improvement: Those with poor or fair credit scores can benefit from secured credit cards as a means to improve their credit standing. Responsible use, such as keeping balances low and making payments on time, can lead to an increase in credit scores over time.
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Financial Independence: Secured credit cards can empower individuals to take control of their finances and move towards greater financial independence. With responsible use, cardholders can graduate to unsecured credit cards, access higher credit limits, and enjoy lower interest rates.
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Learning Financial Responsibility: Secured credit cards provide an opportunity for individuals to learn important financial skills, such as budgeting, managing credit utilization, and understanding interest rates. These foundational skills are crucial for long-term financial health and stability.
Which Secured Credit Cards can help build (or rebuild) credit history fast?
All 3 options below help build credit history:
- Several major card issuers have introduced secured cards to their portfolio. Although the major credit cards issuing banks are primarily known for their unsecured credit cards that come with cash back or points rewards, these issuers’ secured cards may have an annual fee and are targeted towards students, consumers with no credit history, and generally those with credit scores in the low 600s. A few of the issuers in this category even have a periodic review process to determine if the deposit can be returned after several months of responsible card payments and usage behavior. This is our first recommended option to explore to see if you can qualify for one of these type of secured cards.
- There are credit card issuers (aka subprime issuers) who primarily focus on offering secured credit cards and are relatively easier to qualify and apply for compared to option 1 credit cards. The secured cards offered by these Banks also report to the credit bureaus and can help build credit. These credit cards for the most part do not offer cash back or rewards and are meant to be used primarily to help build credit. Subprime card issuers generally target consumers with credit scores below 600 (also known as Bad Credit) as well as those with no credit history. Their cards generally have fees and higher APRs but have no minimum credit score requirement, report payment behavior to all 3 credit bureaus, and many do not do credit checks at application.
- Subprime issuers can also offer unsecured (i.e. no deposit required) credit cards with a low limit, very high APRs and large annual fees. Although these cards are not as prevalent as the above 2 options, this type of unsecured card can help those consumers who do not want to tie up $200/$300 in deposits. Generally, due to various fees (annual fee plus a monthly servicing fee etc) charged on these type of cards, we are generally not a fan of pursuing this option because of the high costs and therefore only recommending one that potentially gives a higher limit to those that qualify.
Best Secured Credit Cards to help build (or rebuild) credit fast
While not everyone may be inclined to make a security deposit for credit access, it doesn’t diminish the appeal of secured cards compared to unsecured ones, especially when focused on credit building. If you have the means to provide the deposit, these cards serve as a stepping stone, helping you progress toward cards offering enhanced features.
Understanding Secured Credit Cards: What to Keep in Mind
Secured credit cards, while having their downsides, also bring valuable features that may not be readily available with unsecured credit cards designed for those with bad credit. As you embark on the journey to find a secured card, consider these key factors:
- Affordable Security Deposit: Begin your search by focusing on secured cards with a minimum security deposit that aligns with your budget.
- Benefits for On-Time Payments: Look for cards that reward timely payments. Some secured cards offer opportunities such as credit limit increases or a pathway to graduate to an unsecured card.
Remember, the goal is to view your security deposit as more than just a requirement for credit access; it’s an opportunity for financial growth.
Our Approach to Selecting the Best Secured Credit Cards
In our selection process, we prioritized both accessibility and utility. Since secured cards involve a significant security deposit, we concentrated on options with a low minimum deposit for easier card opening or a high maximum deposit for accelerated credit building. Additionally, we considered cards offering “extras” beyond credit access such as low to no annual fees and fixed APRs.
For the credit-building secured cards, our featured Open Sky Secured card has no annual fee and no credit check.
The first table below is our list of best secured credit cards to help build credit available from major credit card issuers (option 1 above).
These cards were selected based on having no annual fee, providing access to FICO scores for free, and whether the issuing bank periodically reviews your credit so that your deposit can be returned (i.e. a migration or conversion path to getting an unsecured card).
Generally, you can qualify for these cards if you are a student or have no credit history. If you have a “bad credit” history (i.e. credit scores below 600), you may have a harder time qualifying for these cards.
| Discover IT® Secured Credit Card | Secured Mastercard® from Capital One® | Citi® Secured Mastercard® | Bank of America® Cash Rewards Secured Card | |
 |  |  |  | |
| Credit Required | No Credit History Required | No Credit History Required | No Credit History Required | No Credit History Required |
| Minimum Security Deposit | $200 | $49,$99 or $200 | $200 | $300 |
| Intro Offer | Cash Back Match 10.99% for 6 mo for Balance Transfers | None | None | None |
| APR | Check issuer site | Check issuer site | Check issuer site | Check issuer site |
| Annual Fee | $0 | $0 | $0 | $0 |
| Foreign Transaction Fee | None | None | 3% | 3% |
| Rewards | 2% on gas (on up to $1k spend/qtr. 1% all else | None | None | 3% Category of Choice (gas, online, dining), 2% grocery & 1% all else |
| Upgrade to Unsecured | Auto review after 8 mo for unsecured | Can be upgraded at the Bank’s discretion | Not Applicable | Periodic review to have deposit returned |
| Other Considerations | One of the few cards to offer Rewards for a Secured card along with the opportunity for an upgrade. Reports to all 3 credit bureaus. | High APR and no clearly defined upgrade path. Provides access to FICO score (thru Credit Wise). Reports to all 3 credit bureaus. | Security deposit maybe returned after 18 mo. Provides access to FICO score. Reports to all 3 credit bureaus. | Higher min security deposit. This is new from Bank of America. A rare cash back rewards for this segment. Provides access to FICO score. Reports to all 3 credit bureaus. |
| Our Rating* | A- | B+ | B+ | A- |
This brings us to the list of cards for option 2, i.e. cards from subprime issuers. Among the cards offered by the subprime issuers, are the leading Secured Cards like the OpenSky Plus Secured Card, and the Open Sky Launch Secured Card. For those with fair credit, we recommend the 1.5% cash back card from Upgrade.
The secured cards below were selected for their ease of acceptance of consumers with bad or poor credit to help establish or rebuild credit. In other words, similar to the list of cards in the table above, the cards shown below can help you establish credit and improve your credit score usually within a year with responsible card use.
Upgrade Cash Rewards Card, OpenSky Plus, and Open Sky Launch Secured
| Upgrade Card | OpenSky® Plus Secured Visa® Credit Card | Open Sky Launch Secured Visa® Credit Card | |
 |  |  | |
| Credit Required | Fair/ Average/Good Credit | Bad Credit/No Credit | Poor/No Credit/Rebuilding |
| Min Security Deposit Required | Unsecured | $300 | $100 |
| APR | Check issuer site | Check issuer site | Check issuer site |
| Annual Fee | $0 | $0 | $25 – $36 |
| Foreign Transaction Fee | 3% | 3% | 3% |
| Rewards | 1.5% | Up to 10% Cash Back | Up to 10% Cash Back |
| Upgrade to Unsecured | N/A | Upon request | Upon request |
| Other Considerations | Late Fee: $0 If you carry a balance beyond the due date, the balances can be repaid in equal monthly installments over a set period. | Late Fee: Up to $41 Reports to all 3 Bureaus. Rare no annual fee secured credit card. No credit check necessary to apply. | Late Fee: Up to $41 Reports to all 3 Bureaus. Opportunity for graduation to an unsecured product. Low Deposit. No credit check needed. |
| Click to apply | Click to apply | Click to apply | |
| Our Rating* | A- | B+ | B |
Important point to remember is that regardless of which secured credit you use, you should pay your monthly balance on time, pay in full to avoid interest charges, and keep your utilization rate (balance outstanding/total card limit) to under 30%.The best secured credit cards to help build (or rebuild) credit history listed here should be thought of as a bridge to getting the more desirable unsecured credit cards. If you have Fair Credit and would like to improve your credit score, apply for the Upgrade card and earn cash rewards while improving your credit score. Once you have built a good credit history, the major card issuers will be competing to offer you their Cash Back and Travel Rewards cards with bonus offers in no time. That is a very realistic goal to achieve. Lets get going.
Frequently asked questions:
How Long Does It Take to Build Good Credit?
Building good credit takes time and depends on your financial habits. Here’s a breakdown to help you understand the timeline:
1. Why Does Credit History Matter?
Your credit history makes up about 15% of your FICO score. A longer history gives lenders more information about how you’ve managed debt, such as making payments on time and keeping balances low.
2. How Long to Establish a Fair Credit Score?
- If you’re starting with no credit, you can achieve a fair credit score (600–699) in 1 to 2 years.
- Key habits to follow:
- Pay bills on time.
- Keep your credit utilization low (use less than 30% of your credit limit).
- Avoid unnecessary hard inquiries on your credit report.
3. How Long to Build Good Credit?
- Moving from fair credit to good credit (700–749) usually takes a few more years.
- Maintaining responsible credit behavior, such as paying on time and managing debt wisely, is essential.
4. How Long to Reach Excellent Credit?
- Achieving an excellent credit score (750 and above) is a long-term goal.
- It typically requires 5–10 years of consistently good habits like:
- Making on-time payments.
- Managing various types of credit (e.g., credit cards, loans).
- Keeping balances low.
5. What Else Should I Keep in Mind?
- Credit-building timelines vary based on individual circumstances.
- Focus on building good financial habits, such as consistent payments and responsible credit use.
- Your credit score is a snapshot of your financial behavior at a given time, and it will evolve as new information is added to your credit report.
By sticking to these principles, you’ll steadily improve your credit over time.
How do I apply for a secured credit card?
Although every issuer processes applications a bit differently, the steps needed for applying and receiving a secured credit card is typically as below. We recommend completing the application process in one sitting and having your debit card and bank information handy for any secured card deposit.
- Research your options and apply for the secured card that best meets your needs. The issuer will evaluate your application through their underwriting process to make the approved/rejected determination.
- Once approved, you will be required to fund the deposit. Before the issuer opens your secured credit card account, you have to pay your security deposit. With some applications, the issuer will request your bank account information to transfer the deposit from your bank if they approve you. Some secured cards like the OpenSky Plus will give you some time to pull together the deposit. It is important that you fund your deposit within the required time frame provided by the credit card issuing bank. If not, your application status will be changed from approved to rejected.
- Your secured credit card is mailed to you. Once you fund the security deposit, the issuer will mail you your card. You can then use it just like any other credit card. Make a few small purchases each month so that you can pay off the balances by your monthly due date. In general, to keep building your credit score, it’s best to use less than 30% of your available credit at any given time.
With the above 3 steps, you are on your way to building and improving your credit history.
How long does it take to receive my credit card after approval?
- Once you apply, and the card’s issuer immediately verifies your identity and ability to pay, they could approve your account right away (for unsecured credit cards). For secured credit cards, once they approve you, and you fund your security deposit, they mail your card to you in a few days.
- Generally, it takes about 7-10 business days from the time they approve your application (and you fund it for secured cards) to send your credit card to you.
Is the secured credit card deposit refundable?
- The secured credit cards listed here offer a refundable security deposit. For the secured credit cards, the card-issuing bank holds the security deposit (equal to your credit limit) in case you don’t pay your bill. However, you do get your deposit back anytime you choose to close the card account in good standing.
Can I transition from a secured card to an unsecured one?
- When your credit improves from bad to average to good, you’ll find that you will be able to qualify for unsecured credit cards with cash back and other rewards.
- After 6-9 months of on time payment, some secured cards like the Open Sky Plus card will review your account for potential upgrade to an unsecured card, upon request. When your card program moves (graduates) you to an unsecured card, it returns your security deposit to you.
- With most issuers, you may have to specifically request an upgrade. If your issuer can’t or won’t upgrade you — also keep in mind that not all secured-card issuers even offer unsecured cards — you can apply for unsecured cards separately with other issuers. The way that would work is that you will close your secured account and receive your security deposit back, and then open a new unsecured account.
Are loan options available for various credit scores?
- Personal loans (or emergency cash) are available for all credit scores. You can use personal loans for almost anything you need, including debt consolidation, unexpected medical expenses, unforeseen emergency cash needs, or making a large purchase.
- It is important that you avoid personal loans that charge atrociously high interest rates. With the rise of fintech and peer-to-peer lending companies there are several lenders servicing various customers across the entire credit spectrum (from poor credit to prime credit), making personal loans cheaper, more accessible, and a tool to build credit with. Click here to see your hassle free Personal Loan options.
Sources Used: Issuer websites, ftc.gov.
*Rating Key:
A/A-: Industry Leading or Highly Recommend
B+: Recommend enthusiastically
B: Recommend
B-: Can be suitable to apply for some prospective customers
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Which secured credit cards have you used to build (or rebuild) credit history fast? Please let us know below.
