Get Low Deposit Secured Credit Card Easily in 2024

You can rebuild your credit score easily and affordably by applying for Low Deposit Secured Credit Card.

Applicants for secured credit cards must submit a refundable security deposit. The cards are not like regular credit cards but work just like them. As a result, you can shop online or in person, pay bills, and take advantage of the convenience of credit while enjoying its advantages.

A lender will not be able to turn you down for having a bad credit score because your security deposit backs your account.

Choosing the right secured credit card will depend on several other factors. This list of the Low Deposit Secured Credit Card requirements has been compiled to make your decision easier.

Without further delay, let’s dive into it.

What are Low Deposit Secured Credit Card?

We first need to understand what secure credit cards are before looking at the top Low Deposit Secured Credit Card. 

A secured credit card is one that is backed by the cardholder’s cash deposit. Rather than the cardholder defaulting on payments, if they cannot make the deposit, the deposit acts as collateral to ensure the card issuer’s security. Your credit limit for your secured credit card will be determined by the amount of the deposit you make.

A secured credit card is usually issued to subprime borrowers, people with bad credit histories, or those with few credit records (also referred to as thin-file borrowers). A secured credit card can improve a borrower’s credit score because the issuer reports to the credit reporting agencies.

How a Low Deposit Secured Credit Card Works?

It is important to note that most credit cards are unsecured: You have no guarantee that you will be able to repay your accrued balance. According to its contract, you agree to pay your balance in whole or part each month, but you’re not required to put any assets or income up as collateral.

This is one of the reasons why credit card interest rates are so high: unsecured debt is always more expensive than secured debt, like mortgages or car loans.

Is a Low Deposit Secured Credit Card Good?

Credit card companies offer Low Deposit Secured Credit Card as a way to offer credit. They are expensive, but they can be very useful for rebuilding credit scores.

Several costs also apply to secured cards, making them an expensive borrowing option. The annual percentage rates (APRs) of secured cards are often higher, often over 20%, and currently average 20.68% as of May 2023, above the national average.

 In any case, if you apply for a secured card, your credit score is likely to be lower, and therefore, you won’t qualify for the best rates. You may not find that 20% or more is too much more expensive than other types of credit.

The secured credit card, on the other hand, is a great option for those looking to improve their credit score. These cards are designed for people with little or no credit history – those who have difficulty qualifying for regular credit cards. They put up a deposit to compensate the card company for the additional risk of providing them with credit.

Top Low Deposit Secured Credit Cards

Current

The Current Build Card is offered by Current, a fintech company that provides banking services. A deposit is not required, there is no credit check, there is no annual fee, and there is no APR. To be eligible for the Build Card, you must have a Current all-in-one bank account, which is free to open and maintain. By setting your credit limit based on your Current account, you avoid incurring excessive debt by only spending what you have.

Autopay is available at over 14,000 participating merchants to enable you to pay off your Build Card and earn rewards points. There is a 3% late fee if you do not opt into autopay and are late on a payment, and Current only reports to TransUnion at the moment.

Annual fee	$0
Purchase APR	0% APR – Purchases are made using your Current Account balance
Welcome Offer	N/A
Rewards	Up to 7% cash back

Chime

As a fintech company, Chime offers banking services provided by its bank partners. You must directly deposit $200 per month into Chime’s Spending account to qualify for the Chime Credit Builder card. It is not necessary to make an upfront cash deposit.

Credit Builder Card limits are based on the balance of your Chime account, so you can only spend what you have. Chime doesn’t check your credit, charges no interest, and doesn’t charge annual fees. You don’t have to worry about your banking history with Chime since it does not use ChexSystems. Neither a monthly fee nor an annual fee is charged by Chime’s checking account.

Annual fee	$0
Purchase APR	N/A
Welcome Offer	N/A
Rewards	None

Capital One 

The Capital One Platinum Secured Card is a traditional secured card with one of the lowest deposit requirements on the market. There are minimum deposit amounts of $49, $99, and $200, and those minimum deposits allow you to borrow up to $200. Increasing your credit limit can also be accomplished by depositing more money.

All three credit bureaus are notified when Capital One reports foreign transactions or card replacements. If you keep up with the payments, you’ll also be able to upgrade – something not included with debit-credit cards. The purchase rate is 30.74% variable APR, similar to a regular credit card.

Annual fee	$0
Purchase APR	30.74% variable
Balance transfer APR	30.74% variable Balance Transfer Fee applies to balances transferred at a promotional rate (0% at the Transfer APR, 4% of the amount of each transferred balance that posts to your account at a promotional APR that Capital One may offer to you)
Welcome Offer	N/A
Rewards	None

Cleo

All-in-one banking with credit-building opportunities is offered through the Cleo Credit Builder Card and membership. A Cleo account is required to back the Cleo Credit Builder card. The Cleo card requires a Cleo account, a $14.99 monthly Credit Builder membership – equivalent to about $180 annually – and a deposit of at least $1.

The company does not pull your credit and charges no interest, and it reports to all three credit bureaus. Additionally, you can access other features, such as cash advances, cashback rewards and challenges, and a Cleo wallet if you join as a paid member. In contrast to other options, this card is more expensive due to its membership fee.

Annual fee	See terms
Balance transfer APR	N/A
Welcome Offer	N/A
Rewards	Up to 7% cash back

Discover 

The Discover It card is a top-secured card option that requires a $200 security deposit. Even though the cashback rate on this card is not as high as other options, it offers 2% cash back on gas stations and restaurants, 1% on all other purchases, and a dollar-for-dollar match for all cash back earned during the first year.

You will receive a refund of your security deposit after seven months if you make all your payments on time. A hard credit check will be required, and the APR is 28.24% for purchases.

Annual fee	$0
Purchase APR	28.24% variable
Balance transfer APR	10.99% intro for the first 6 months (then 27.99% variable) Balance transfer fee of 3%
Welcome Offer	Discover will match cash back earned at the end of your first card year
Rewards	Up to 2% cash back

Self Visa

Credit score requirements and hard credit checks are not required with the Self Visa Credit card, which has a low minimum deposit of $100. The $100 deposit comes from opening a Credit Builder Account, making three payments on it, and saving $100 – that’s where the $100 comes from. When you’re ready, you can apply for a Self Visa Credit card and set your credit limit.

You must have savings of at least $100 to qualify for the credit card, which is secured by the Credit Builder account. It may take some time to set up, but the lack of a credit check might be worth it. Considering most credit cards without a credit check can charge APRs well over 30%, the 26.99 to 28.24% variable is surprisingly low. The annual fee is $25, however.

Annual fee	$25
Purchase APR	26.99% variable
Balance transfer APR	N/A
Welcome Offer	N/A
Rewards	None

How to Apply for Low Deposit Secured Credit Card?

The application procedure for a Low Deposit Secured Credit Card is similar to that for a regular credit card. The cards are issued by virtually every major credit card issuer, including Visa, Mastercard, and Discover.

There may be perks and rewards available to cardholders wherever the brand is accepted. A monthly statement shows the cardholder’s end-of-period balances as well as activity on the card during the given month. A credit agreement specifies that they must pay at least the minimum due as well as interest on outstanding balances.

In the same way that regular credit cards have an annual fee, Low Deposit Secured Credit Card may also have one. There may also be fees for initial setup or activation, credit increases, monthly maintenance, and balance inquiries. The deposit and available credit can and do be reduced by all these factors, so you should review them before signing up.

Tips for Choosing the Best Low Deposit Secured Credit Card

You can build your credit with a Low Deposit Secured Credit Card when you use it responsibly. By improving your credit, you will be able to qualify for cards with better features and benefits. To help you choose the Low Deposit Secured Credit Card that’s right for you, here are some things to consider:

Verify the Security Deposit

It is important to verify the minimum and maximum security deposits of a card before applying. There are cards that require a deposit from as little as $49 to as much as a few thousand dollars, depending on the issuer and card. Checks or money orders can be used to pay for some cards’ deposits, while bank accounts are required for others.

Card Upgrade

 Depending on your credit score, you may be able to upgrade a Low Deposit Secured Credit Card to an unsecured one. You can graduate from unsecured credit cards without going through a hard credit check by upgrading with the same issuer.

Verify the Fees

 The most common credit card fees are on top of the higher interest rates. If you choose the right credit card and use it carefully, you can avoid late payments, foreign transactions, and penalty APR fees. In any case, knowing what your potential credit card will charge in the event of a nonpayment is a good idea.

Prequalify Yourself

 Many issuers will not offer secured cards to consumers with past bankruptcies, high debt levels, or low income. You might want to consider applying for a card that allows you to see if you are prequalified before you apply. It can help you avoid a hard credit pull for cards you aren’t likely to qualify for by giving you an idea of your chances of being approved.

Three Credit Bureau Reports

 It is essential to report good payment behavior to Equifax, Experian, or TransUnion to build or repair credit. Ensure that your credit card issuer informs at least one of the credit bureaus about your card usage so that you don’t go unnoticed for your good habits, such as on-time payments and full payments.

Things To Consider Before Choosing Low Deposit Secured Credit Card

When choosing a Low Deposit Secured Credit Card, you should consider other factors aside from the deposit size. Here are some things to consider:

•  When you apply for a credit card with a prequalification process, you are checked if you are preapproved without a hard inquiry being placed on your credit report. This benefits you since hard inquiries are negative for your credit score and last for two years.
•  Your credit card issuer may refund your deposit if you make timely payments for a specified period.
•  You should be aware of any fees associated with the card, like annual fees, late fees, balance transfer fees, etc. It is important for you to minimize the fees you pay.
• You will pay interest on balance transfers that carry over beyond a billing cycle. Once again, you should look for the lowest APR.
•  A Low Deposit Secured Credit Card credit limit can be very low at first. You should find the highest available credit limit by looking at the available credit limits. In addition, look for issuers that automatically increase credit limits when payments are made on time.
• There are often credit card companies that specify the credit score range for which their cards are designed. Make sure the card is suitable for your credit score range by checking the ranges it covers.
•  You may earn cashback or points for spending on certain credit cards. An increase in rewards increases the value of a credit card.
•  Is the card protected against fraud? You shouldn’t be held liable for fraudulent purchases with cards.
•  Consider what additional benefits the card offers, such as rental car insurance, credit monitoring, flight insurance, and emergency assistance.

Pros and Cons Of Low Deposit Secured Credit Card

The Pros

• Establish a positive credit history for people who are not eligible for unsecured credit cards.
• The upfront payment allows individuals in need of credit to establish creditworthiness.
• As a result of proven credit management, it is possible to upgrade to unsecured cards.
• Provides rewards (such as cashback and points) and member benefits (such as credit monitoring and fraud protection).

The Cons

• A deposit is required to access the credit line.
• Credit limits on some cards are low, ranging from $100 to $300.
• Compared to unsecured cards, these cards may have high fees and APRs.

Do I Get My Deposit Back from a Low Deposit Secured Credit Card?

Security deposits are fully refunded for closed accounts or accounts upgraded to unsecured accounts.

Your account will not be refunded if you close it with outstanding debt or charges. You will instead be reimbursed for any debts that you have by the bank using your deposit. The bank will return any remaining money after satisfying those debts.

Your credit card’s issuing bank will typically send you a paper check as a refund. You should receive your check within seven to ten business days after closing your account.

If you have deposited with a bank or credit union, you can have your deposit refunded to your linked checking or savings account. Your refund may arrive within two to three business days in such cases.

FAQ

Conclusion

A Low Deposit Secured Credit Card is a great way to rebuild your credit if you don’t qualify for the best mortgage rates or credit card welcome offers.

The application procedure for a Low Deposit Secured Credit Card is easier, but you have to make a deposit upfront. The interest rate on secured cards is also higher, and the rewards aren’t as high as those on traditional cards. This makes a secured card a less-than-ideal long-term solution, but it’s useful for establishing a relationship with a bank and managing your credit history.