How to Choose a Secured Credit Card

A secured credit card generally requires a deposit that supports the credit line. You still receive a bill and must make payments. Approval, the deposit required and any later move to an unsecured card depend on the issuer's terms. The CFPB lists secured cards as one possible way to start or rebuild a credit history, not a required step for everyone.

Compare the complete cost

For each offer, write down the deposit, annual or monthly fee, purchase APR, late-payment terms and any other charges. Ask when and how the deposit could be returned. A low deposit does not by itself make a card inexpensive. If you carry a balance, interest can cost more than the rewards earned.

Check what the card reports

Ask whether the issuer reports payment history to the nationwide credit reporting companies. The CFPB's credit-building worksheet recommends checking this before you choose a card. Also confirm whether a pre-application eligibility check affects your credit report and whether the final application may cause an inquiry. Do not treat “no credit check to apply” as guaranteed approval.

Decide whether a card fits now

If you cannot comfortably set aside the deposit or pay the bill on time, pause. Paying an existing obligation may matter more than adding a new one. If a card fits, compare the issuer's current agreement and eligibility terms. Our credit card comparison tool is a research aid; it does not submit an application or predict approval.

Your next action: Compare two cards on deposit, annual fee, APR, reporting and eligibility. Check both offers again on the issuer's site before applying.