Personal Finance

Best Secured Credit Cards of July 2024

A secured credit card can be a path to success for people who need to build or rebuild their credit history. Here are some to check out this month.

Zander Leigh

05 Jul 2024 — 4 min read

Photo by Paul Felberbauer / Unsplash

Good news: my credit score has gone up 44 points since I started using a secured credit card this year!

A secured credit card is a great option for people who have no credit or need to rebuild credit. Unlike traditional credit cards, they typically don't require a credit check, but they do require a cash deposit that serves as collateral for the credit limit. This deposit not only secures the card but also reduces the risk for the issuer, making it an accessible option for those with limited or poor credit. By using a secured credit card responsibly, cardholders can demonstrate their creditworthiness to credit bureaus, paving the way for future financial opportunities and access to unsecured credit products.

A secured credit card works much like a regular credit card in terms of usage and repayment. The cardholder makes a cash deposit, typically equal to their credit limit, which acts as collateral. This deposit is refundable and is held by the issuer in case the cardholder defaults on payments. Each month, the cardholder receives a statement and is required to make at least a minimum payment by the due date. Timely payments and responsible use are reported to the major credit bureaus, helping to build or improve the cardholder's credit score over time. By maintaining low balances and making consistent payments, users can eventually qualify for unsecured credit cards and other financial products.

A secured credit card can be a path to success for people who need to build or rebuild their credit history. They can be especially helpful for people who are in debt relief programs and need to maintain their score or prevent it from dropping while they wait for their debt settlements to be approved.

Here are some secured credit cards for you to check out.

Card Name: Chime Credit Builder

Why you should check it out: Chime's Credit Builder card is an excellent option for a first time credit card user, or for someone needing to rebuild credit. A direct deposit needs to be made to your Chime checking account within a required time frame in order to be approved, and you’re good to go! You set your credit limit by transferring money into your credit builder account, and as you spend it gets reported to the credit bureau at the end of each month.

Learn More

Card Name: Capital One Platinum Secured

Why you should check it out: This card provides flexibility with your minimum deposit, offering options of $49, $99, or $200. With responsible consistent use, you can upgrade to a standard credit card and earn back your deposit.

Learn More

Card Name: Discover It Secured

Why you should check it out: It can be tough to find secured credit cards that offer rewards. The Discover It Secured card offers 2% Cash Back at gas stations and restaurants on up to $1000 in purchases each quarter, along with 1% cash back on other purchases. They also provide a generous 2x cash back match for your first year. Another benefit is that late payments don’t impact your APR.

Learn More