Top Secured Credit Cards For 2020

Top Secured Credit Cards For 2020

August 11, 2020         Written By Tracy Farnsworth

If you need help finding the right secured credit card, use the Low Cards Credit Card Selection Tool to get started. The process only takes a few seconds, and we’ll match you with the best credit card offers to meet your needs.

 

Top Features: Low 9.99% fixed APR; no credit check or minimum credit score needed; reports to all 3 national credit bureaus

When you have a low credit score or haven’t had time to build a credit history, it can be hard to qualify for a new credit card. Credit card issuers often want people with a minimum of a “good” credit score and months or years of information on their credit report. If you lack that, you may feel like you’re out of luck. It’s time to consider applying for a secured credit card.

Secured credit cards are just like traditional credit cards with one main difference. You’re assigned an interest rate that is applied to your monthly purchases if you don’t pay off your balance at the end of the month. Payments and charges are reported to all three credit bureaus. The one big difference is that you’ve made a deposit that matches your credit limit. If something happens and you can’t repay what you’ve charged to the card over time, the money is there as a back-up.

** Top 5 Secured Credit Cards For 2020 – Scroll to the bottom for quick access to the list **

The Ins and Outs of Secured Credit Cards

What are the ins and outs of secured credit cards? Other than the fact that more people qualify for them, why would you want one and why wouldn’t you want one? 

With secured credit cards, you’re eligible for account reviews from time to time. If you’ve been making payments on time and using your card responsibly, you may qualify for a credit line increase. The more responsible you are, the more you’re offered. When you are offered a credit line increase, the credit card company usually will not ask you to deposit more money. You won’t suddenly have to come up with hundreds more in cash to get your credit line increase.

A secured credit card often has few requirements beyond that initial deposit. Even if you have a horrible credit score or absolutely no credit history, you’re likely to qualify. It’s much easier to qualify for this credit card and start building or improving your credit score.

You have to pay your credit card bill on time. When you purchase something using the card, it’s applied against your credit limit. You make monthly payments to pay it off or that make the minimum payment. If you don’t, you’ll face late fees and over-the-limit fees. Some cards offer free credit score access that you can check when you want. Access your credit score when you log in through the app or website. You’ll be able to watch how much your score improves from one month to the next.

What are the downfalls of a secured credit card? Most cards charge an annual fee. While traditional or rewards credit cards don’t make you pay to have the card, secured cards may have that fee. Think of it as a membership fee. It may not be ideal, but it’s one way these banks provide lower rates and introductory offers to higher-risk applicants.

 

How Do You Pick the Best Secured Credit Card?

How do you pick the best-secured credit card? It comes down to where you stand in terms of a credit score. If you don’t have any credit history, which is common in new high school graduates, you may end up with a card that has a higher APR and annual fee. You may not face this issue. Sometimes, no credit seems less risky than someone with poor credit.

When you’re weighing your options, start by looking at the annual fee. Some credit card companies charge a flat rate, while others charge a flat rate for the first year and monthly membership fees after that. A monthly membership fee is only beneficial if it isn’t higher than another company’s annual fee. If possible, find a company that has the lowest annual fee without any surprise increases.

Read the company’s terms when it comes to the deposit. If you decide to cancel your card, is the deposit returned to you or do you have to pay off the balance before you get your money back? If you own money, you’d want a bank that deducts the amount you owe from the deposit and sends you the balance. Some have terms that say you must pay off your balance to get your deposit back. Verify with the company before you apply. You don’t want to face a hassle getting your deposit back.

Look at the APR and make sure you’re okay with the amount of interest you pay. You might have one company offering you a 19.99% APR while another starts you at 24.99%. The second seems higher, but if the annual fee is much lower than the first, you may save money with the higher APR. Some companies offer a 0% introductory APR secured credit card. You can use the 0% to quickly build up a credit history by purchasing something larger and paying it off over a few months. You’ll never face interest charges as long as the item is paid for before the introductory rate expires.

Find out if you have the power to set your credit limit. You might get an offer that’s more than you’re comfortable with at first. You’re the one depositing money to secure the card, so you should be the one to decide how much you’re comfortable having as a credit line.

Finally, check that the credit card offer is valid in your state. Some banks do not offer secured credit cards within certain states. You don’t want to go to apply only to find out that your top choice doesn’t allow cardholders from your place of residence.

 

Steps to Take Before You Apply

Before you fill out a secured credit card application, research the different cards. Read reviews, check out the APRs, and learn about the different fees. Watch for late fees, over-the-limit fees, and annual membership fees. You also want to see what the fees are for balance transfers and international transactions.

As you start weighing the pros and cons of each credit card company, create a list of your top five choices. If you don’t have a top-five, that’s okay. Aim for at least two options. You want your first choice to approve your application, but you should have a back-up just in case.

 

Tips for Improving Your Credit Score

Credit scores are a number assigned by the credit bureaus as a rating for your creditworthiness. FICO is one of the most commonly used scores. It’s based on these ranges and ratings:

  • 800 or higher – Exceptional
  • 740 to 799 – Very Good
  • 670 to 739 – Good
  • 580 to 669 – Fair
  • 579 or lower – Poor

Usually, a person with a rating of good, very good, or exceptional won’t have a hard time qualifying for a credit card. If your rating is fair, you may have a little more difficulty. If your rating is poor, a secured card is probably your best chance of qualifying for a new credit card.

Raise your credit score by making some simple promises to yourself. Start by always paying your bills on time. Missing a payment by even a day can cost you as late payments account for 35% of your FICO credit score. Pay your loans, credit cards, and other bills on time. A credit card company may not be forgiving. If there’s no late payment forgiveness protection, you’ll face a late fee. If that late fee puts you over your credit limit, you also have an over-the-limit fee. Suddenly, your credit report shows that you owe more than you had, and you also have the late payment putting a ding on your credit report.

Each year, pull up a copy of your credit report from all three credit reporting agencies. Look for discrepancies. If there’s a missing payment and you know you paid it, take a screenshot of the cleared payment and submit that to the three agencies. It may take a few weeks for the change to appear on your credit report, but you need to watch for it and make sure the change is recorded. If you see a credit card or loan account that’s not yours, report those errors, too.

How you use your credit is also important and counts for 30% of your FICO score. Credit utilization is the amount of debt you hold versus the total of your credit lines. You want to keep this percentage to no more than 30%. If you have a secured credit card with a $500 credit limit and have $400 charged on that card, you have a credit utilization percentage of 80%. You want to get that down to 30% or lower, so pay that card down so that only $150 in charges remain.

Don’t close down one account too quickly and open a new one. It’s important to build a long history with a credit card company as the length of your history with the company also impacts your score. Apply for a secured credit card and stay with that company for a while.

When you do apply for a credit card, don’t fill out too many. It’s always best to build a list of your top choices, pre-apply, which isn’t always possible with secured cards, and see if you’re approved. At that point, apply for your first choice. You impact your credit score each time you apply for a new credit card.

 

When Should You Shift From a Secured Credit Card to a Rewards or Traditional Credit Card?

Once you’ve had a secured credit card, when is it a good time to apply for a rewards or traditional credit card? You may never need to. If you’re happy with the arrangement the secured credit card offers, stick with that company. If the annual fee is reasonable and you have a low-interest rate, it may be better to stick with them and keep building your credit history. It takes seven years of having a credit history to get into the good range. Switching from one card to another can be detrimental.

The other thing to remember is that if you had a history of late payments that led to your low credit score, late payments are in your credit history for seven years. You need to allow time for them to be removed. Moving too quickly from a secured credit card to an unsecured credit card before you’re truly ready may cause more harm than good. Don’t rush the move from one credit card to the next.

If the APR is higher than you feel is fair, ask for an account review. It doesn’t hurt to ask. See what competitors with similar cards are offering for an APR to someone with your credit score. Being armed with information can work in your favor. The company may agree with you and lower the rate or waive the annual fee in order to keep you. You may have improved your credit score enough that you can stay with the same company but qualify for an unsecured credit card.

If you’ve raised your credit score and find yourself in the fair range, it’s a good time to start looking at applying for an unsecured credit card. Follow the same steps. Research cards to find the best match. Pre-apply when it’s possible. Keep the impact to your credit score to a minimum by applying for one card rather than a whole bunch of them.

By applying for a new credit card, you could receive a rewards card that offers you cashback on your purchases. You save money by getting a little bit of cashback each time you use the card. You might want a credit card with travel rewards that helps you get free hotel rooms or free flights. You could also find that you qualify for a credit card with a low-interest rate, no annual fee, or free balance transfers. No matter which option you take, keep making payments on time and using the card responsibly so that you’re always improving your credit score.

 

Top 5 Secured Credit Cards For 2020:

Assent Platinum 0% Intro Rate Mastercard Secured Credit Card

The Assent Platinum 0% Intro Rate Mastercard Secured Credit Card is a secured card issued by Synovus Bank. This card will help build your credit history with responsible use since it reports to all three of the major credit bureaus. Enjoy 0% APR on Purchases for Six Months! The card has an interest rate of 12.99% (V). There is a $49 annual fee on the card. Your credit line is secured by your deposit of $200 to $2,000 which is submitted with your application and is fully refundable. Cardholders have online access to their accounts 24 hours a day. The card is offered throughout the United States except in New York, Iowa, Arkansas, and Wisconsin.

 

First Progress Platinum Prestige Mastercard® Secured Credit Card

The First Progress Platinum Prestige Mastercard® Secured Credit Card does not require a minimum credit score or even a credit history in order to be approved. So you should encounter very few problems obtaining the card. And, consumers should hear in a matter of minutes whether they are approved once they fill out the relatively easy online application. Once approved, you will be asked to put down a security deposit between $200 and $2,000. This deposit determines the credit limit on your card. But consumers can rest assured that the security deposit is refundable when you close the account and completely pay off your remaining balance. When you begin using the card, your monthly activity will be reported to the three major credit bureaus, so responsible use over a period of time should help build your credit. Cardholders will have no problem using the card anywhere in the United States since the card is part of the Mastercard network. If there are times where you need to carry a balance from one month to the next, you will not incur too steep a financial penalty since this card has a very low APR for a secured card: 9.99% (V).

There are some features that consumers should consider on the card. The First Progress Platinum Prestige Secured Card does carry a $49 annual fee which is charged immediately upon approval. And consumers in four states will not be able to obtain the card since First Progress does not operate in Wisconsin, Iowa, Arkansas, or New York.

 

OpenSky® Secured Visa® Credit Card

The OpenSky® Secured Visa® Credit Card requires no credit check and has a short application process. In addition, it allows customers to submit their refundable security deposit in a number of different ways, including checks, money orders, debit cards, wire transfers, or even Western Union. The deposit can be any amount between $200 and $3,000, which becomes your credit limit. The standard interest rate for both new purchases and cash advances is 17.39% (variable). There is a $35 annual fee for this card.

 

Applied Bank® Secured Visa® Gold Preferred® Credit Card

The Applied Bank® Secured Visa® Gold Preferred® Credit Card is a card to consider. There is no credit history needed to be approved for this card, and no minimum credit score. If you can put up the security deposit, you will likely be approved as a cardholder. The minimum security deposit is $200 and can be as high as $1,000. Whatever you put up as a security deposit will become your credit limit. Hence, if you put $600 as your security deposit, you will be able to charge up to $600 on your account each month. Once you have established yourself as a responsible customer, you may have the ability to increase your credit limit up to $5,000 by adding the corresponding security deposits. The card has what looks like an attractive APR for a secured card: 9.99% (Fixed). The card is backed by the Visa network, so you will have no trouble using the card anywhere in the United States. As mentioned, your account activity will be reported to Equifax, Experian, and TransUnion each month, which will help you begin to build a positive credit history if you use the card wisely every month. The card has an APR of 9.99% (Fixed). It can be used anywhere that Visa is accepted.

 

First Progress Platinum Elite Mastercard® Secured Credit Card

The First Progress Platinum Elite Mastercard® Secured Credit Card is a secured card that does not require a minimum credit score or even a credit history in order to be approved, so approval should be fairly easy. Before you become a cardholder, you will need to put down a security deposit. This deposit will also serve as your card’s credit limit. The deposit must be a minimum of $200 and a maximum of $2,000. The security deposit is totally refundable if you should ever close your account, as long as you pay off the entire balance on your account. Prudent use of the card can have a beneficial effect on your credit score since Synovus will report your monthly activity to all three of the major credit bureaus. With this in mind, it is extremely important for the cardholder to pay the balance on time each month. There will be very few problems with using the card almost anywhere in the United States since the card is backed by the Mastercard network. There are some drawbacks to the card. If you do not pay off your balance in full one month, you will be assessed a fairly significant interest rate of 19.99% (V). The First Progress Platinum Elite Secured Card does carry a fairly reasonable $29 annual fee which is charged immediately upon approval. But First Progress does not operate in four states, so consumers will not be able to obtain the card if they live in Arkansas, New York, Iowa, or Wisconsin.

 

If you need help finding the right credit card, use the Low Cards Credit Card Selection Tool to get started. The process only takes a few seconds, and we’ll match you with the best credit card offers to meet your needs.

 

The information contained within this article was accurate as of August 11, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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tracy

About Tracy Farnsworth

Tracy Farnsworth went straight from a business track in high school to a full-time job in mortgage banking in Burlington, Vermont. After having children, she built a freelance career in content writing and took online classes as time allowed. She completed Social Media Marketing and Digital Marketing certificate programs with Ireland's online Shaw Academy and completed several courses in SEO and analytics. In her free time, she's the “mom” to a very clingy rat terrier, and the pair walk at least a mile every day. She's also a novice baker who is trying to master the art of sourdough bread.