How do you get a credit card if you don’t have good credit? Secured cards can be a good opportunity for those with poor credit, or little credit history, to open an account and improve their credit.
A secured card is different from a traditional credit card in that the applicant is required to submit a refundable security deposit before opening an account. That deposit will most likely be the limit on your credit card. But just like any other credit card, a secured credit card can offer customers strong security, important purchase protections and valuable benefits. So this month in our Best Credit Cards in America series, we look at the top secured credit cards on the market.
How We Chose the Best Secured Credit Card
It can be a challenge to find a really good secured card, as some cards come with high fees and punitive terms. So to find the best cards, we look for low fees, more consumer-friendly terms, and most of the features that credit card users expect from standard, non-secured cards. For example, while most secured cards will have an annual fee, there are some that are reasonably priced, and occasionally, some secured credit cards have no annual fee at all. In addition, the best secured cards will have a $0 fraud liability policy, which goes beyond the $50 maximum required by law. Furthermore, the best secured cards will offer benefits such as auto rental insurance, extended warranty coverage, and a travel assistance hotline. Finally, it’s also nice to look for a secured card from a major card issuer that can later offer you a standard credit card. After making on-time payments for at least a year, secured card customers should contact their card issuer and request to open a standard, non-secured account, which will allow them to receive their deposit back.
We reviewed numerous secured credit card offers to find the best… and here’s the winner for Best Secured Credit Card in America.
Capital One Secured MasterCard
In the past year, Capital One has eliminated the annual fee for its Secured MasterCard, making it one of the few no-fee secured cards in this market. In addition, this is one of the only secured cards that will offer customers a line of credit in excess of their initial security deposit, making it something like a hybrid card. For example, the minimum deposit of $49 results in a $200 initial credit line.
But when it comes to benefits, this card is much more like a standard credit card than some of its less feature-filled competitors. Cardholders enjoy extended warranty coverage, auto rental insurance, price protection and travel accident policies. And while it does have a slightly higher standard interest rate (24.9%) than most secured cards, this is the rare secured card that has no foreign transaction fees.
When you’re working on building your credit, it can be helpful to check your credit scores regularly to track your progress — doing so can be encouraging, but it can also help you spot problems along the way. You can get your credit scores for free many ways — including through Credit.com, where your credit scores get updated every month.
Want to see the others? Check out the rest of this year’s Best Secured Credit Cards in America.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
Related Articles
- How to Shop for a Secured Credit Card
- The Best Student Credit Cards in America
- An Expert Guide to Picking a Credit Card for Building Credit
This article originally appeared on Credit.com.
This article by Jason Steele was distributed by the Personal Finance Syndication Network.
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