The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Advertiser disclosure
The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
Katie Genter is a digital nomad who has traveled full time since June 2017. She writes and edits stories about points and miles, and loyalty programs, often letting her personal experiences color these stories.
March 28, 2025 • 7 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.
Editorial note: This is a recurring post, regularly updated with new information and offers.
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By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
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Quick summary
Secured credit cards require a refundable security deposit, which typically sets your initial credit limit.
These cards are designed for individuals with limited or poor credit history and can help build or repair credit when used responsibly.
Unlike unsecured cards, secured cards are generally easier to qualify for but may offer fewer benefits and lower credit limits.
Some secured cards may provide additional features, such as credit score access or opportunities to transition to an unsecured card after demonstrating responsible use.
What to consider
A minimum deposit is required to open a secured card, and the deposit usually does not earn interest.
Most secured cards do not offer rewards, though a few may provide limited cash back or other perks.
Responsible use—such as making timely payments and keeping balances low—can improve your credit and may lead to higher credit limits or a transition to an unsecured card.
What you'll miss from the article
A detailed comparison of secured versus unsecured cards and step-by-step guidance on using secured cards to build credit effectively.
Generated by AI with support from our editorial team.
If you have limited to no credit history or currently have a low credit score, you may not be eligible for most credit cards. Sure, you can use cash or a debit card, but these won’t help you build your credit. So, a better option might be to use a secured credit card.
What is a secured credit card, exactly? Here’s what you need to know.
What is a secured credit card?
A secured credit card, whether personal or for business, requires a security deposit from the cardholder when the account is opened. This security deposit is usually refundable and generally determines your initial credit limit.
Secured credit cards are often used by consumers without credit history or with low credit scores, and they can be useful for building or repairing credit.
Secured vs. unsecured credit cards
The terms indicate the fundamental difference between secured and unsecured credit cards: Secured credit cards require a security deposit, whereas unsecured credit cards don’t.
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However, whether you should apply for a secured card or an unsecured card comes down to your credit — especially your credit history and credit score.
Most unsecured credit cards require at least an average credit score since issuers want to avoid the risk posed by consumers with bad and poor credit. You may be able to find an unsecured card that is easy to qualify for even with bad credit, but these cards often have high interest rates or annual fees.
So, if you have less than average credit, it’s usually a better idea to use a secured card to build your credit before advancing to an unsecured card.
When you apply for a secured credit card, you generally need to provide your bank account and routing number. If you’re approved, the issuer will withdraw a security deposit from your bank account. The minimum security deposit usually starts at around $200, but you can often deposit more money to get a higher credit line.
Most issuers have a maximum credit limit they're willing to issue for a secured card, so don't expect to be able to put up tens of thousands for a large credit line.
You can use your secured credit card just like an unsecured credit card. Be sure to make payments on time and use your card responsibly since most issuers will report your credit activity to the three major credit bureaus. This means your account will appear on your credit report and affect your credit score.
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If you use your card regularly and pay your bill on time each month, some issuers may provide additional opportunities, such as an increased credit limit or the ability to transition your account from secured to unsecured.
For Discover it® Secured, the issuer will review your credit card account monthly, after seven months, to determine whether to return your security deposit.
When you close your account or transition to an unsecured account with the same issuer, you’ll get your security deposit back (if it was refundable) as long as there’s no outstanding balance due on your account. Generally, your security deposit will not earn interest.
The information for the Discover it Secured has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
How to use a secured credit card to build credit
The primary reason to use a secured credit card instead of cash or a debit card is to build or repair your credit; this is because most banks report activity on secured credit cards to credit bureaus.
With a secured credit card, you’ll generally start with a low credit line. So, to build or repair your credit, you’ll initially want to make small, infrequent purchases and focus on paying off your balance in full each month.
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The issuer may eventually offer you a higher credit line, which can help your credit score if you keep your utilization low and pay off your balance in full every month. It’s also a good idea to check your credit score regularly while working to build or repair your credit.
There are other benefits to using a credit card. Most credit cards provide protections that generally aren’t available when you use a debit card or cash, such as no liability on unauthorized purchases.
Select secured credit cards also provide other benefits, such as free access to your FICO Score with the Citi® Secured Mastercard®.
The information for the Citi Secured Mastercard has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Most secured credit cards, whether personal or business, don’t earn rewards. But, if you’re looking for a secured card that earns rewards and can help you build or repair your credit, the Discover it Secured credit card will likely be your first choice.
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This card earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter (then 1%) and unlimited 1% cash back on all other purchases.
There’s no annual fee on the Discover it Secured. Like other Discover it cards, Discover will match the cash back you earn at the end of your first year.
To open your account, you'll need to submit a minimum $200 deposit and financial information, such as your bank information or tax return.
Bottom line
Secured credit cards can be a great way to help you build credit and ease your way into the world of points of miles. If you have little or no credit, start with a secured credit card, then work your way up to some of our favorite credit cards.
For Capital One products listed on this page, some of the benefits may be provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
