Tip #1 – Contrary to popular belief, you don't need to carry a balance to improve credit. What's reported to the credit bureaus is the monthly statement balance, regardless of whether you pay in full or not.
Tip #2 – Having a high balance is not better. A small portion of your credit score is based on what percentage of your available credit limit you are using. It's best to never use more than 30% of your credit limit at any given time, according to advice given by FICO.
Tip #3 – After your card is open, setting up automatic e-payments is recommended. That ensures payments will always be on-time.
2014 Secured Credit Cards to Rebuild Credit
(constantly updated with featured offers from our advertising partners)
Capital One® Secured MasterCard®
The Capital One Secured MasterCard is a very popular card for rebuilding credit, as evidenced by the many stories in our card forum section. This card is a very straightforward and reasonably priced option for those with little or no credit history. It comes with a low annual fee of $29 and, unlike many secured credit cards, there are no application or processing fees. Once you establish a track record of managing your account and other credit responsibly you may earn credit limit increases over time without having to increase your security deposit.
- Apply toll-free by calling 877-525-5805
- Unlike a prepaid card, it builds credit when used responsibly, with regular reporting to the 3 major credit bureaus
- Get free access to your credit score and learn how everyday decisions can affect your score using Capital One® Credit Tracker
- Your minimum security deposit gets you a $200 credit line
- You may qualify for a credit line increase based on your payment history and creditworthiness-no additional deposit required
- Easily manage your account 24/7 with online access, by phone or using our mobile app
- It's a credit card-accepted at millions of locations worldwide
primor® Secured Visa Gold Card
If you are in the market for a low cost secured card the primor Secured Visa Gold Card could be just the ticket to building or rebuilding your credit. Get the global acceptance and prestige of a real Visa Gold card which reports to all three credit bureaus, unlike a prepaid debit card.
- Fast, easy application process
- No processing or application fees!
- Low fixed interest rates with no penalty rate!
- Reports to all three nationwide credit bureaus
- Guaranteed Approval* as long as your monthly income exceeds your monthly expenses by $100 or more!*
- *See application for additional details
USAA Secured Card
Don't consider this unless you're in the military and even then it might not be the best idea since its annual fee is higher. The application process first requires you to qualify for USAA membership. Only military personnel qualify for full USAA benefits. Unfortunately they'll put your deposit in a 2 year CD so it will be locked up during that time... a drawback because if you manage credit responsibly you can probably qualify for an unsecured card before then.
- Before starting the application, USAA will ask you questions to establish online access and eligibility with USAA.
- Security deposits are held in a 2-year CD account. A penalty will apply if you close the CD before before the 2 years is up.
- A minimum $250 initial deposit is required.
- $35 annual fee.
Think your credit might be good enough for an unsecured card? Then try out this tool!
Consider these factors when choosing your secured credit card...
- Reasonable Fees – Fees should be expected, but some banks will rip you off with outrageously high fees. The application fee and annual or monthly fee should be reasonable and when combined, over the course of the first year the fees should cost no more than $120 (and hopefully a lot less).
- Flexible Security Deposit – We all know higher credit limits are better, but maybe you can't afford much for your security deposit right now. The best cards should give you some flexibility. For example, you can start with a $500 deposit for a $500 limit, but later on when you can afford to do so, you should be given the ability to raise that to a $3,000 limit by adding more to your security deposit.
- Reports to Credit Bureaus – Of course it's important that your account is reported to the bureaus. However, banks that offer secured credit cards (or any card for that matter) have to pay to report customer records... for that reason, some unscrupulous banks won't report because they're being cheap, make sure you watch out for them.