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Best Secured Credit Cards of 2021
If you have a thin credit history and can’t get approved for a credit card, you may want to look into getting a secured credit card. Secured credit cards are designed to help you build your credit, so they have flexible minimum credit score requirements and are much easier to qualify for than traditional credit cards.
Unlike regular credit cards, secured credit cards don’t have strict qualification requirements, but they do require a security deposit to reduce the risk for the lender. Once you get approved, you often only need a small security deposit of a few hundred dollars to open your account, which serves as both your credit limit and collateral in case you default.
Since secured credit cards have such low credit limits, they’re great for young adults who are just learning how to manage their spending. Secured credit cards are also useful for those who want to rebuild their credit scores after a financial rough patch. In fact, cardholders who kept their secured credit card accounts open and in good standing for two years were able to increase their credit scores by an average of 24 points, according to the Federal Reserve Bank of Philadelphia.
UNITY® Visa Secured Credit Card
Who should get it: If you have high-interest credit card debt that you want to pay off, then this is the card for you. The UNITY® Visa Secured Credit Card is one of the only secured credit cards that allows you to make balance transfers and get a low introductory rate on them. For a full six months, you’ll pay just 9.95% on your balance transfers, which is far cheaper than the average 15.10% APR for credit cards.
How to use it: You’ll want to pay a deposit to set your credit limit with the UNITY® Visa Secured Credit Card. Take advantage of the card’s best feature by transferring a high-interest balance to the card since it offers a low introductory balance transfer APR of 9.95% during the first six months.
- A higher-than-average minimum security deposit of $250
- Annual fee of $39
- 3% of each transaction in U.S. dollars. foreign transaction fee
Why you’ll love it: In addition to balance transfers, the UNITY® Visa Secured Credit Card offers a competitive APR on purchases and a high credit limit of $10,000. It’s a great choice for people who need to rebuild their credit and pay down debt.
Pro Tip: To take advantage of the introductory interest rate, make sure your payments are always on time. If one of your payments is more than 60 days late, you’ll lose the 9.95% interest rate on balance transfers before the introductory period is up.
Compare the best secured credit cards of 2021
|Credit Card||Minimum Deposit Required||Annual Fee||Free Monthly Credit Score|
|Secured Mastercard® from Capital One: Best for no annual fee||$49, $99 or $200*||$0||Available|
|OpenSky® Secured Visa®: Best for instant approval||$200||$35||Unavailable|
|First Progress Platinum Prestige Mastercard® Secured: Best for low APR||$200||$49||Unavailable|
|UNITY® Visa Secured: Best for balance transfers||$250||$39||Unavailable|
*Based on creditworthiness
Secured Mastercard® from Capital One
Who should get it: If you don’t have a lot of money saved up for deposits and fees, you should consider getting the Secured Mastercard® from Capital One. For as little as $49 refundable security deposit, you can open an account and get access to a $200 line of credit that will help you rebuild your credit score.
How to use it: The Secured Mastercard® from Capital One gives you access to a higher credit line as long as you pay your first five monthly bills on time. Plus, you can pick your monthly payment due date. Use the extra perk of a personalized payment date to pay your balance in full and on time to avoid interest, build credit and possibly increase your credit line.
Why you’ll love it:
The Secured Mastercard® from Capital One is a super low-cost credit card with no annual fees, but you wouldn’t know it from its long list of perks. If you make your first five monthly payments on time, you’ll get access to a higher line of credit — no additional deposit required. You’ll also get free alerts whenever your credit score changes, a personalized payment schedule, round-the-clock customer service and more with this top-notch secured credit card.
Things to consider:
- No rewards
- May check your credit when you apply, which could impact your credit score
Pro tip: Make your payments on time to avoid the up to $39 late fee and get access to a higher line of credit after five months without an additional deposit.
Pros and cons of secured credit cards
Secured credit cards are one of the best ways to build your credit and establish good financial habits for your future. Unlike prepaid credit cards, activity on secured credit cards usually gets reported to all three major credit reporting agencies. So if you make regular, consistent payments on your credit card, you’re likely to see a significant boost in your credit score.
Another positive is that secured credit cards are a great learning tool for people who are new to credit or who struggle with managing their spending. They also typically have much lower credit limits than unsecured credit cards, so it’s harder to run up a balance you can’t afford. This makes the secured route less risky overall and better for new cardholders and people who have had trouble limiting their spending in the past.
Although there are secured credit cards with relatively low minimum deposits and fees, some people may find it hard to save up enough money to open an account. If you have limited savings, a credit-builder loan may be a better option for you. Credit builder loans allow you to build your credit without putting up collateral, as the money you borrow is held in an account and isn’t released until you successfully make all the payments.
Another drawback of secured credit cards is that they tend to have higher interest rates than regular, unsecured credit cards. If you don’t pay off your balance in full each month, you can end up paying a lot in interest.
Please Note: Information about the Secured Mastercard® from Capital One have been collected independently by TheSimpleDollar.com. The issuer did not provide the details, nor is it responsible for their accuracy.
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