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Best Secured Credit Cards After Bankruptcy

Updated on December 27, 2013
A secured credit card is a great option after bankruptcy because it can help rebuild credit.
A secured credit card is a great option after bankruptcy because it can help rebuild credit. | Source

If you're considering getting a secured credit card after bankruptcy or just to start rebuilding your credit but aren't sure what features to look for in a secured card, this article will answer the basic questions about secured credit cards, how they work and offer a list of some of the best ones from a variety of credit card companies.


How Secured Credit Cards Work

The application process for secured credit cards is very similar to regular credit cards, however if you are approved, you must send a security deposit (usually refundable) to the credit card issuer and that amount will typically equal your line of credit. For example, if you make a deposit of $500, you’ll have a $500 credit limit.

Just like regular credit cards, you’ll get a monthly statement and need to make payments for your purchases or cash advances. They will not be deducted from your security deposit.

Some secured credit cards will pay a little interest on your deposit and most will return your security deposit when you close your account or upgrade to an unsecured card as long as your balance is paid in full and you haven’t defaulted on your account.


Why Get a Secured Credit Card Instead of a Regular Credit Card, Debit Card or a Prepaid Credit Card?

Secured credit cards are a smart option for those who’ve had credit troubles or even bankruptcy. The odds of approval are higher because you are guaranteeing your line of credit with your deposit. If you’ve applied for regular credit cards and have been declined, you may want to apply for a secured card.

Debit Cards and Prepaid Credit Cards work well for some people who don’t choose to have a credit card, but since they aren’t ‘credit’, they don’t report to the credit bureaus. Most secured credit cards do report to credit bureaus, which can be helpful for someone trying to rebuild their credit and FICO score. (Assuming you’re making your payments on time)


Will You Automatically Be Approved For a Secured Card?

No. Just because your odds of approval can be higher than with standard credit cards doesn’t mean everyone is approved. Your overall credit situation, how long it has been since your bankruptcy has been discharged and other factors will be considered.


Reasons to Get a Secured Credit Card:

  • To help rebuild credit
  • Better odds of approval for those with bad or poor credit
  • Most report to the three main credit bureaus
  • Some allow you to earn interest on your deposit
  • Some will offer you an unsecured card once your credit improves
  • Most return your deposit as long as you don’t default


Secured Credit Card Do’s & Don’ts

  • Do read the terms of the credit card before you apply
  • Do make sure your deposit is refundable as long as you don’t default
  • Do check online reviews of the card, especially if it’s from an issuer you aren’t familiar with
  • Don’t pay astronomical interest rates
  • Don’t apply for a card with an annual fee over $35 or so



Here’s a list of some of the best secured credit cards and details to help you choose the one that’s right for you.



Capital One Secured MasterCard

  • Current Annual Fee: $29
  • Current Purchase APR: 22.9% (variable)
  • Current Cash Advance APR: 24.9% (variable)
  • Minimum Security Deposit: $49, $99 or $200 (Depends on your credit score)
  • Credit Line: $200 to $3000 (Your credit line will match your deposit)

Other Details:

  • Reports to credit bureaus
  • Deposits are refundable
  • You have a chance for credit line increases or graduation to an unsecured card
  • You can choose your own card design or personalization



Wells Fargo Secured Visa Card

  • Current Annual Fee: $25
  • Current Purchase APR: 18.99% (variable)
  • Minimum Security Deposit: $300
  • Credit Line: $300 to $10,000
  • Eligibility: Must have been 12 months since you declared bankruptcy and “you must not have any unsettled liens.”
  • Reports to the credit bureaus

Other Details:

  • Security Deposit is refundable
  • You can choose your monthly payment due date
  • You’re able to customize your card design
  • Zero liability for promptly reported unauthorized use



U.S. Bank Secured Visa Card

  • Current Annual Fee: $35
  • Current Purchase APR: 20.99%
  • Minimum Security Deposit: $300
  • Credit Line: $300 to $5000

Other Details:

  • Reports to credit bureaus
  • Zero fraud liability for unauthorized transactions
  • Fraud Protection
  • Car Rental Discounts with top car rental companies
  • Your security deposit is held in a FDIC-insured, interest earning savings account
  • You will be considered for graduation to an unsecured card after twelve months if your account is in good standing.
  • Security deposit is refundable



Navy Federal Credit Union nRewards Secured Card*

*Eligible only for Army, Marine Corp, Navy, Air Force, DoD and their families

  • Current Annual Fee: None
  • Current Purchase APR: Variable
  • Minimum Security Deposit: $500
  • Credit Line: Equal to amount of deposit

Other Details:

  • Reports to the credit bureaus
  • Security deposit is refundable
  • Security deposit is held in a Navy Federal Savings Account
  • Earned “Best Credit Cards in America Award” from Credit.com
  • Earn one Reward Point for each $1 of purchase
  • No Balance Transfer Fees



USAA Secured Credit Card (MasterCard or American Express)*

*Card is only available to military members and their families

  • Current Annual Fee: $35
  • Current Purchase APR: 9.9%
  • Minimum Security Deposit: $250
  • Credit Line: $250 to $5000 (depends on amount of your deposit)

Other Details:

  • Deposit is held in a USAA 2-year, interest-earning CD
  • Reports to the credit bureaus
  • Deposit is refundable as long as you don’t default on your payments
  • Lower interest rate than many other secured cards
  • Can graduate to an unsecured card or cash in your CD after you reach your term



DCU Visa Platinum Secured Credit Card

  • Current Annual Fee: $0
  • Current Purchase APR: 8.5% to 18% Depending on Creditworthiness
  • Minimum Security Deposit: Depends on Credit
  • Credit Line: Depends on Credit

Other Details:

  • No Annual Fee
  • Easy Cash Advances
  • Free $500,000 Travel Insurance when you use this card
  • Zero Fraud Liability


© 2012 carolynkaye

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    • BCHM profile image

      BCHM 3 years ago

      I have a USAA AMEX and although it does not graduate now, I believe that it will in the future. I will hold on to mine until it does.

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