Getting approved for a credit card can be a challenge if you are either starting from scratch or have past credit blemishes. Signing up for a secured credit card is a smart idea when you need to rebuild or establish credit.
What is a secured credit card? A secured credit card is a credit card that requires you to put up cash as a security deposit that serves as your credit line. It's easier to qualify for a secured credit card than a standard credit card. Plus, when you use a secured card, the activity is reported to the three main credit reporting agencies -- which can help rebuild your credit.
Read: 10 Things That Happen When You Don't Use a Credit Card
GOBankingRates identified the best secured credit cards based on the following criteria:
Annual fee
Balance transfer fee
Cash advance fee
Balance transfer and purchase APRs
Security deposit
Rewards
Special features
Click on a link below to learn more about how to find the best secured credit cards:
Discover it Secured Credit Card
Capital One Secured Credit Card
Navy Federal Credit Union nRewards Secured Credit Card
Wells Fargo Secured Visa Credit Card
Citi Secured MasterCard
U.S. Bank Secured Visa Card
USAA Secured Card American Express
OpenSky Secured Visa Card
BankAmericard Secured Credit Card
First Progress Platinum Prestige MasterCard Secured Credit Card
Here's a quick comparison of the top 10 best secured credit cards you can sign up for in 2016:
Secured Credit Card
Annual Fee
Balance Transfer Fee
Cash Advance Fee
Balance Transfer APR
Purchase APR
Security Deposit
Where to Apply
Discover it Secured Credit Card
$0
3% of amount of each transfer
Greater of $10 or 5% of each advance
23.24%
23.24%
$200
Apply Now
Capital One Secured MasterCard
$0
Variable
Greater of $10 or 3% of each advance
24.99%
24.99%
$49, $99 or $200
Apply Now
Navy Federal Credit Union nRewards Secured Card
$0
None
None if Navy Fed branch/ATM; otherwise $0.50 or $1
9.24%-18%
9.24%-18%
$500
Apply Now
Wells Fargo Secured Visa Card
$25
Greater of 5% or $5
Greater of $10 or 5% of each advance
19.24%
19.24%
$300
Apply Now
Citi Secured MasterCard
$25
Greater of $5 or 3% of each transfer
Greater of $10 or 5% of each advance
22.24%
22.24%
$200
Apply Now
U.S. Bank Secured Visa
$29
Greater of 3% or $5 of each transfer
Greater of 4% or $10 of each advance
19.24%
19.24%
$300
Apply Now
USAA Secured Credit Card American Express
$35
3% of amount of each transfer
3% of each advance
10.15%-20.15%
10.15%-20.15%
$250 in a CD
Apply Now
OpenSky Secured Visa Card
$35
n/a
Greater of $6 or 5% of each advance
n/a
17.64%
$200
Apply Now
BankAmericard Secured Credit Card
$39
Greater of $10 or 3% of each transfer
Greater of $10 or 3% of each advance
20.49%
20.49%
$300
Apply Now
First Progress Platinum Prestige MasterCard Secured Credit Card
$44
n/a
Greater of $10 or 3% of each advance
n/a
11.99%
$200
Apply Now
Discover it Secured Credit Card
The Discover it credit card offers consumers the chance to establish or re-establish credit. Although many banks offer secured credit card options, the Discover it secured credit card is unusual for its rewards program and lack of an annual fee.
Annual fee: $0
Balance transfer fee: 3 percent of each balance transfer
Cash advance fee: Greater of $10 or 5 percent of each advance
Introductory balance transfer APR: 10.99% intro APR for six months from date of first transfer -- applies to transfers that post to your account by Sept. 10, 2016
Regular balance transfer APR: 23.24%
Purchase APR: 23.24%
Required security deposit: $200 minimum
Rewards:
1 percent cash back on all purchases
2 percent cash back on up to $1,000 in combined purchases each quarter at gas stations and restaurants
Cash back matched after account is open for 12 consecutive billing periods
Pros
Can freeze your account via mobile app or on website if your card is misplaced
Free FICO credit score
Payment history reported to the three major credit bureaus
No annual fee
Cons
After promotional period, has slightly higher purchase and balance transfer APR than many other cards
Balance transfer fee
Related: Discover It Secured Credit Card Review
Capital One Secured MasterCard
Capital One's secured card gives cardholders a chance to build credit without having to pay an annual fee. Capital One determines a cardholder's refundable security deposit of $49, $99 or $200. Everyone begins with a credit line limit of $200, although you can get a higher initial limit -- up to $3,000 -- by making a larger deposit before your account opens.
Annual fee: $0
Balance transfer fee: Variable
Cash advance fee: Greater of $10 or 3 percent of each advance
Introductory balance transfer APR: None
Regular balance transfer APR: 24.99%
Purchase APR: 24.99%
Required security deposit: $49, $99 or $200 refundable deposit based on creditworthiness
Rewards: None
Pros
No annual fee
Regularly reports payment history to major credit bureaus
Free credit report from CreditWise
Fraud coverage
Cons
No rewards
No intro APR
Navy Federal Credit Union nRewards Secured Credit Card
If you are an active or former military member -- or a family member of one -- consider the Navy Federal Credit Union nRewards secured card. It is a great option for those with bruised credit.
The Navy Federal Credit Union nRewards secured card boasts a low APR with no annual fee. It also rewards you with one point for every dollar you spend. You can start redeeming those points once you have earned 1,000, and rewards don't expire until four years after the date they were earned.
Annual fee: $0
Balance transfer fee: None
Cash advance fee: None at NFCU branch or ATM; $0.50 at domestic non-NFCU ATMs; $1 at foreign non-NFCU ATMs
Introductory balance transfer APR: None
Balance transfer APR: 9.24% to 18%
Purchase APR: 9.24% to 18%
Required security deposit: $500
Rewards: 1 point for every $1 spent on purchases
Pros
No annual fee
Activity reported to credit agencies
Offers rewards
Cons
Eligibility limited to those involved with the Department of Defense or family members of those involved with the DOD
Higher security deposit amount than other secured credit cards
Related: 4 Best Credit Cards for Military Service Members
Wells Fargo Secured Visa Credit Card
The Wells Fargo secured credit card has an annual fee, but it comes with a modest APR compared with some of its competitors. Additionally, the card offers a higher credit line than most -- up to $10,000. All you need is the security deposit to match that amount.
Annual fee: $25
Balance transfer fee: Up to 5 percent for each transfer with a $5 minimum
Cash advance fee: Greater of $10 or 5 percent of each advance
Introductory balance transfer APR: None
Balance transfer APR: 19.24%
Purchase APR: 19.24%
Required security deposit: $300
Rewards: None
Pros
Reports account activity to credit agencies
Credit line up to $10,000, depending on security deposit
Fraud protection with zero liability
Cons
Charges an annual fee
No rewards or sign-up incentives
Citi Secured MasterCard
With Citi's secured MasterCard, you get a credit line equal to your security deposit -- anything between $200 and $5,000. Some key perks include the fact that your activity is reported to credit agencies and you get travel protection, such as accident and car rental insurance.
Annual fee: $25
Balance transfer fee: Greater of $5 or 3 percent of each transfer
Cash advance fee: Greater of $10 or 5 percent of each advance
Introductory balance transfer APR: None
Balance transfer APR: 22.24%
Purchase APR: 22.24%
Required security deposit: $200 minimum
Rewards: None
Pros
Reports to credit rating agencies
Offers travel protection, including worldwide accident insurance and rental car insurance, and travel cancellation reimbursement
Cons
Annual fee
No rewards, sign-up bonuses or other current promotions
Applicants with bankruptcies in the last two years not eligible
U.S. Bank Secured Visa Card
Although the U.S. Bank secured Visa card has an annual fee of $29, the APR is modest in comparison to others. The card also boasts additional perks, such as car rental insurance. Its FlexControl program allows you to make automatic payments and to pay down a balance faster, according to the company.
Annual fee: $29
Balance transfer fee: Greater of 3 percent or $5 of each transfer
Cash advance fee: Greater of 4 percent or $10 of each transfer
Introductory balance transfer APR: None
Balance transfer APR: 19.24%
Purchase APR: 19.24%
Required security deposit: $300 minimum
Rewards: None
Pros
Helps rebuild credit
Offers additional perks such as FlexControl, auto rental insurance and automatic bill pay
Cons
Annual fee
No rewards
USAA Secured Card American Express
The United Services Automobile Association's secured card is one of the best secured credit cards and a valuable option for military members and their families to build credit. The USAA secured card requires you to use a two-year CD account as your security deposit, a unique feature compared with other secured credit cards. The card requires a $250 minimum initial deposit, which earns interest.
Furthermore, the card comes with a lower variable APR of 10.15% or 20.15%. To be eligible, you must either be a current USAA member, a member of the military or a family member of someone in the military. The card's military benefits include a 4% APR on all balances for up to 12 months during your deployment or permanent change of station, and a 4% APR on existing balances at the time of active military enrollment until a year after service is completed. Also, rebates are available on all finance charges during qualified active duty.
Annual fee: $35
Balance transfer fee: 3 percent of each transfer amount
Cash advance fee: 3 percent of each advance
Balance transfer APR: 10.15% and 20.15%
Purchase APR: 10.15% or 20.15%
Required security deposit: $250 in a CD
Rewards: None
Pros
Accrue interest on your deposit
Identity-theft resolution services
Collision damage and theft coverage on car rental
Military benefits, including rebates and lower APRs
Cons
Annual fee
No rewards
Must be a military member, family member of someone in the military, or a USAA member to qualify
Read: What Type of Credit Card Should I Get?
OpenSky Secured Visa Card
If you are looking for a secured credit card that gives you a little more control, consider OpenSky's secured credit card. The OpenSky secured Visa does not require a credit check, making the application process fast and easy.
Another special feature is that you set your own credit line depending on the amount you provide as a security deposit, between $200 and $3,000. Additionally, the card offers a decent APR for purchases.
Annual fee: $35
Balance transfer fee: None
Cash advance fee: Greater of $6 or 5 percent of each advance
Intro balance transfer APR: None
Balance transfers APR: None
Purchase APR: 17.64%
Required security deposit: $200 minimum
Rewards: None
Pros
No credit check necessary
Can choose your own starting credit line and increase at any time
Automatic credit reporting to major credit reporting agencies
Competitive APR
Cons
Higher annual fee than that of many other secured cards
No rewards
BankAmericard Secured Credit Card
The BankAmericard secured credit card operates similarly to Bank of America's other cards and offers many of the same account features, including digital wallet technology, mobile banking, and text and email notifications.
The card gives you the opportunity to create a temporary card number when shopping online, so your real card number remains protected. To open a secured card, you will need a security deposit minimum of $300. The maximum credit limit is $4,900. Cardholders have the option to add the card to their mobile devices and shop by Apple Pay, Android Pay or Samsung Pay.
Annual fee: $39
Balance transfer fee: Greater than $10 or 3 percent of each transfer
Cash advance fee: Greater than $10 or 3 percent of each transfer
Intro balance transfer APR: None
Balance transfer APR: 20.49%
Purchase APR: 20.49%
Required security deposit: $300
Rewards: None
Pros
Reports to all three credit rating agencies
Digital wallet technology: Apple Pay, Android Pay and Samsung Pay
Mobile banking
Text or email alerts to keep you on top of your finances
Zero liability guaranteed
Cons
Annual fee that is higher than others
No rewards
First Progress Platinum Prestige MasterCard Secured Credit Card
The First Progress secured card is the final card in our survey to help you build credit. Its annual fee is on the high side, but a low APR makes it an attractive option to consider when shopping for secured credit cards. The card's APR is among the lowest APR of secured credit cards.
Annual fee: $44
Balance transfer fee: None
Cash advance fee: Greater of $10 or 3 percent of each advance
Intro balance transfer APR: None
Balance transfer APR: None
Purchase APR: 11.99%
Required security deposit: $200
Rewards: None
Pros
Low APR
Cons
Annual fee
No rewards
Methodology: GOBankingRates assessed information about secured credit cards, including sourcing information from the credit card and financial institution provider websites as of May 31, 2016. To comprise this list of the best secured credit cards, GOBankingRates considered the following factors: (1) annual fee; (2) APR; (3) Rewards, (4) Security deposit, (5) Cash and balance transfer fees.
GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions, and other financial services organizations. Some companies mentioned in this article might be clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone and have not been reviewed, approved, or otherwise endorsed by the companies included in the article.
This article originally appeared on GOBankingRates.com: The Best Secured Credit Cards