Secured Credit Cards: How They Work, and 12 Cards Compared
Figures checked October 29, 2026 against primary sources
A secured credit card is a real credit card that you open with a cash deposit. The deposit protects the bank, so it can approve people with no credit history or a damaged one. You use the card, pay the bill, and the issuer reports those payments to the credit bureaus. This guide explains how the deposit, the limit and the reporting work, how you get the deposit back, which fees the law caps, and compares 12 secured cards using terms read on each issuer's own site on October 29, 2026.
The Short Answer
- You put down a refundable deposit, and it usually becomes your credit limit. Minimums on the cards below run from $49 (Capital One, Discover) to $300 (U.S. Bank). Chime's card needs no deposit at all.
- It builds credit only because it reports. Most big issuers say they report to all three major bureaus (Equifax, Experian, TransUnion). Prepaid and debit cards do not build credit.
- The deposit is not a payment. You still owe a monthly bill. Miss it and you get a late fee and, eventually, a late payment on your credit report.
- You get the deposit back in one of two ways: the issuer upgrades you to an unsecured card, or you close the account with the balance paid. Reviews start as early as 6 months (Capital One, Navy Federal) or 9 months (Citi).
- Federal law caps first-year fees at 25% of the starting credit limit. A deposit you pay from your own bank account does not count toward that cap. Late fees do not either.
- Most big-bank secured cards now have a $0 annual fee. Of the 12 cards in our table, only Self charges one ($25 from the second year).
How a Secured Credit Card Works
The Consumer Financial Protection Bureau describes it simply: "You put in an amount of cash, for example $500. Then, you can spend up to that amount on your credit card." When you pay the bill, your available credit goes back up.
From there it works like any credit card:
- You make purchases up to your limit.
- You get a monthly statement with a minimum payment and a due date.
- If you pay the full statement balance by the due date, you usually pay no interest on purchases. If you carry a balance, you pay the card's APR, which on secured cards is often high.
- The issuer reports your account to the credit bureaus each month.
The difference is only on the bank's side. Issuers such as Capital One say the deposit is "held as collateral while the account remains open." That collateral is what lets them approve applicants they would turn down for a regular card.
The Deposit and Your Credit Limit
On most secured cards the deposit sets the limit dollar for dollar. Citi puts it plainly: your deposit and credit limit "are always equal." There are exceptions:
- Capital One Platinum Secured and Discover it Secured ask for a minimum deposit of $49, $99 or $200 depending on your credit, and give a credit line of at least $200. So a $49 deposit can open a $200 line.
- Chime has no minimum deposit. You move your own money onto the card and spend that.
A few practical points from the issuers' own terms:
- Funding windows are short. Capital One and Discover give you 35 days after approval to pay the deposit, in payments of at least $20 by bank transfer. Citi gives 14 days to provide the bank account it will pull the deposit from.
- Depositing more raises the limit, up to a cap. Capital One Platinum Secured lets you raise the initial line up to $1,000. Discover and Quicksilver Secured assign a maximum of $1,000 to $3,000 at approval. Bank of America and Navy Federal accept up to $5,000.
- The deposit usually earns nothing. Capital One and Discover say "no interest is applied" to it. U.S. Bank is different: it holds the deposit in an FDIC-insured U.S. Bank savings account that earns interest. Navy Federal and DCU hold it in your own credit union savings account.
- The deposit does not pay your bill. Capital One: "you must still make at least your minimum monthly payment each month."
Pick a deposit you can leave alone for a year or more. You will not get it back until you graduate or close the card.
Reporting to the Three Credit Bureaus
A secured card helps your credit only if the issuer reports it. The CFPB says prepaid cards "do not help you establish your credit history", which is the main thing that separates the two products.
What the issuers say on their card pages:
- Capital One and Discover: report your "credit standing," including whether you make your minimum payment in full and on time, to the three major bureaus.
- U.S. Bank: "regularly report your card status to the three major credit bureaus."
- Self and Chime: say they report to all three bureaus.
- Citi: reports "to major credit bureaus monthly" but does not name them on the card page.
- Bank of America, Navy Federal and DCU: the card pages we read do not say. Ask before you apply.
The reporting cuts both ways. Capital One notes that "not making your minimum payments on time each month can damage your credit." Your balance is also reported, so it counts toward your credit utilization. Citi's page confirms that secured card balances "factor into your overall credit utilization." To see how payment history and utilization feed your score, read what counts as a good credit score.
12 Secured Cards Compared
Every figure below was read on the issuer's own page on October 29, 2026. APRs are variable and change with the prime rate. Where an issuer does not print the APR on its card page (it appears only in the application terms), we say so rather than quote a third-party figure. For hands-on reviews of five of these cards (Discover it Secured, Capital One Platinum Secured, Capital One Quicksilver Secured, Chime and Self), see our best credit cards for building credit.
| Card | Deposit | Annual fee | Purchase APR | Credit check | Reports to 3 bureaus | Path to deposit back |
|---|---|---|---|---|---|---|
| Capital One Platinum Secured | $49, $99 or $200 min; line up to $1,000 | $0 | 29.24% variable | No credit score required | Yes | Upgrade to unsecured card "in as little as 6 months" |
| Capital One Quicksilver Secured | $200 min; max limit $1,000 to $3,000 | $0 | 29.24% variable | Not stated | Yes | Upgrade to unsecured Quicksilver |
| Discover it Secured | $49, $99 or $200 min; max line $1,000 to $3,000 | $0 | Not on card page | No credit score required | Yes | Upgrade to Discover it Cash Back |
| Citi Secured Mastercard | $200 to $2,500 | $0 | Not on card page | Yes (income, debt, credit) | "Major bureaus," not named | Reviewed from 9 months, then yearly, for Citi Diamond Preferred |
| Bank of America Customized Cash Rewards Secured | $200 to $5,000 | $0 | 27.74% variable | Not stated | Not stated | Periodic review; "not all customers will qualify" |
| Bank of America Unlimited Cash Rewards Secured | $200 to $5,000 | $0 | 27.74% variable | Not stated | Not stated | Periodic review; "not all customers will qualify" |
| U.S. Bank Altitude Go Secured | $300 to $5,000 | $0 | Not on card page | Not stated | Yes | May graduate automatically to Altitude Go Visa Signature |
| U.S. Bank Cash+ Secured | $300 to $5,000 | $0 | Not on card page | Not stated | Yes | May graduate automatically to Cash+ Visa Signature |
| Navy Federal cashRewards Secured (members only) | $200 to $5,000 | $0 | 18.00% variable | Not stated | Not stated | Reviewed at 6 months, then monthly |
| DCU Visa Platinum Secured (members only) | Not stated; secured by DCU savings | $0 | From 15.25%, max 18% | Not stated | Not stated | Not stated |
| Self Visa (secured) | $100 min | $0 first year, then $25 | 27.74% | No hard inquiry | Yes | Returned on closure; no upgrade path stated |
| Chime Card (needs Chime Checking) | No minimum | $0 | No interest | No credit check | Yes | Not applicable (your own money) |
Rewards, where the issuer lists them: Discover pays 5% in rotating quarterly categories you activate (up to a quarterly cap) and 1% on the rest. Quicksilver Secured and Bank of America Unlimited Cash Rewards Secured pay 1.5% on everything. Bank of America Customized Cash Rewards Secured pays 3% in a category you choose and 2% at grocery stores and wholesale clubs (on the first $2,500 of combined purchases each quarter), and 1% on the rest. U.S. Bank Cash+ Secured pays 5% on the first $2,000 of combined purchases each quarter in two categories you choose. Altitude Go Secured pays 4X points on dining on the first $2,000 each quarter. Navy Federal pays 1%. Platinum Secured, Citi Secured, DCU, Self and Chime list no rewards.
What the table shows:
- Lowest cash to start: Capital One Platinum Secured and Discover it Secured ($49 if you qualify for the lowest tier), then Self ($100). Chime needs no deposit but requires a Chime checking account.
- Lowest APR: the two credit unions. Federal credit unions face a rate ceiling, currently 18% through September 10, 2027 under the NCUA Board's extension, which is why Navy Federal and DCU sit at or below 18%. Both require membership.
- Clearest graduation timeline: Navy Federal (review at 6 months, then monthly), Citi (from 9 months, then every 12 months) and Capital One ("as little as 6 months").
- Not in the table: Wells Fargo's credit card page listed no secured card on October 29, 2026. OpenSky's site blocked our requests, so we could not read its terms first-hand and left it out.
Getting Your Deposit Back and Graduating
"Graduating" means the issuer turns your secured card into a regular unsecured card and refunds the deposit. Capital One and Discover describe the same two ways to get the money back: earn it back as a statement credit after an upgrade, or close the account and pay the balance in full.
How the issuers describe the review:
- Navy Federal: a credit line increase review after 3 months, then from 6 months a monthly review for an upgrade to the unsecured cashRewards card. Once upgraded, it removes the hold on the deposit within 3 to 5 business days.
- Citi: reviewed "starting at 9 months for early graduation, and then reviewed on a 12 month basis." If you do not qualify, you stay on the secured card for another 12 months.
- Capital One: responsible use could get you upgraded "in as little as 6 months."
- U.S. Bank: you "may even be able to automatically graduate," and the deposit is returned on graduation.
- Bank of America: periodic reviews based on your overall credit history; "not all customers will qualify."
- Self: the deposit is returned when you close the account after paying the balance. Its page does not describe an upgrade.
Issuers do not publish exact graduation formulas. The common thread in their wording is on-time payments and keeping the balance well under the limit. Credit history with other lenders also counts: Navy Federal says its review "will be based on your general credit history."
When you graduate, the account usually stays open as an unsecured card: Discover and Capital One say "all other card terms and features will remain the same." If you instead close the secured card to get the deposit back, read does closing a credit card hurt your credit first. Closing the only card you have can raise your utilization.
Fees to Avoid and the First-Year Fee Cap
Regulation Z limits what a card issuer can make you pay in the first year. Under 12 CFR 1026.52(a), the total fees you are required to pay during the first year after account opening "must not exceed 25 percent of the credit limit in effect when the account is opened."
What counts and what does not:
- Counts: fees you are required to pay for the account, such as an annual fee. The official interpretation adds that an issuer cannot charge an extra fee for raising your limit during the first year if it would break the cap. The cap covers fees charged to the card and fees the issuer makes you pay "through other means," such as from your bank account.
- Does not count: late payment, over-the-limit and returned-payment fees, and optional fees you choose to pay (for example an expedited payment fee).
- The deposit: the official interpretation says a security deposit "charged to a credit card account is a fee" and counts toward the 25% cap. A deposit you pay from your own funds, not taken from the card's credit line, does not count. That is why a $200 deposit for a $200 limit is legal.
Hypothetical example: a card opens with a $300 credit limit. The issuer can require no more than $75 in fees in the first year (25% of $300). If it charged more, it would have to refund the excess by the end of the next billing cycle. A $300 deposit paid by bank transfer is not part of that $75.
Other fee rules worth knowing:
- A late fee can never exceed the minimum payment that was late. If your minimum was $15, the late fee cannot be more than $15.
- No fees for inactivity or for closing the account. Regulation Z says there is no dollar amount tied to account inactivity or closure, so no penalty fee can be charged for them.
Fees to watch on secured cards:
- Annual fees. Eleven of the 12 cards in our table charge none. Self charges $25 from the second year. There is little reason to pay an annual fee for a basic secured card when $0 options exist.
- Interest. Outside the two credit unions, the APRs printed in our table run 27.74% to 29.24%. Paying the full statement balance each month avoids it. Our page on the average credit card interest rate shows how these compare with cards in general.
- Small fees. Self lists a late fee of up to $15, a returned payment fee of up to $15 and a $3.50 instant debit fee.
Secured Card vs Prepaid Card, Credit-Builder Loan and Unsecured Card
| Secured card | Prepaid card | Credit-builder loan | Unsecured starter card | |
|---|---|---|---|---|
| Money up front | Refundable deposit | You load your own money | None; you pay in, get it at the end | None |
| Builds credit | Yes, if the issuer reports | No | Yes, if the lender reports | Yes |
| Type of account on report | Revolving (credit card) | None | Installment loan | Revolving (credit card) |
| Can you get into debt | Yes, interest on balances | No | Only if you miss payments | Yes |
| Approval | Easier; deposit protects issuer | No credit check | Easier; loan funds are held | Harder with no or poor credit |
- Prepaid card: the CFPB is clear that prepaid cards "do not help you establish your credit history." Discover and Capital One make the same point on their secured card pages.
- Credit-builder loan: per the CFPB, the money is held for you while you "pay the loan in small payments, usually over six to 24 months. At the end of that time, you receive the full amount you paid." It adds an installment loan to your file, which pairs well with a card. Self sells both and lets you fund its secured card from its credit-builder account.
- Unsecured starter card: no deposit, but approval is harder with a thin file. If you are not sure you would qualify, Capital One lets you check eligibility "with no impact to your credit score."
Our step-by-step guide to building credit from zero covers how to combine these.
If You Miss a Payment or Close the Card
Missing a payment. The deposit does not cover your bill, so a missed payment works the same as on any card. You can be charged a late fee (capped at the minimum payment due, as above). The issuer reports your payment status, and the CFPB says a late payment generally stays on your credit report for 7 years. A late payment on a secured card can also delay graduation, since issuers look for on-time history.
Not paying at all. The deposit is collateral for what you owe. Issuers return it only when the balance is paid: Citi refunds it on closing "provided the balance is paid in full and the account is in good standing," and Self returns it "after settling outstanding balances." If an unpaid account goes to collections or is charged off, that can show on your report for years; our guide to debt collectors and charge-offs explains how.
Closing the card. Pay the balance to zero, then close. Capital One, Discover, Citi and Navy Federal all say the deposit is refunded after the account is closed and paid off. Closing removes that card's limit from your total available credit, which can raise utilization if you carry balances on other cards.
Can a Secured Card Hurt Your Credit?
Yes, in a few specific ways:
- Late payments. The biggest risk. They are reported like any other card's.
- High utilization. With a $200 limit, a $150 balance is 75% of the line. Citi notes secured balances count toward utilization. Paying the balance down before the statement closes can keep the reported balance lower.
- The application. Some issuers check your credit when you apply (Citi reviews income, debt and credit). Self says it does not do a hard inquiry, and Chime says it does no credit check. For how inquiries affect your score, see tips to increase your credit score.
Used carefully (small purchases, paid in full and on time), a reporting secured card adds positive history each month. You can track that progress with a free tool from our credit monitoring comparison; Capital One's CreditWise, for example, does not require a Capital One card.
How to Choose One
- Start with the bank or credit union you already use. Navy Federal and DCU hold the deposit in your savings account, and credit union rates are capped. U.S. Bank pays interest on the deposit.
- Prefer $0 annual fee. Most major-issuer secured cards in our table have none.
- Check the graduation path. A card that reviews you at 6 to 9 months and refunds the deposit on upgrade gets your money back sooner than one that only refunds on closure.
- Confirm reporting to all three bureaus if the card page does not say. Ask the issuer directly.
- Size the deposit to your budget. A bigger deposit gives a bigger limit and makes low utilization easier, but the money is locked up.
- Read the APR in the application terms, especially for Discover, Citi and U.S. Bank, which do not print it on the card page.
FAQ
Do I get my secured card deposit back?
Yes, if the account is in good standing. You get it back when the issuer upgrades you to an unsecured card, or when you close the account and pay the balance in full. If you leave a balance unpaid, the issuer holds the deposit as collateral against it.
How long until a secured card turns into a regular card?
It depends on the issuer. Capital One says as little as 6 months, Navy Federal reviews from 6 months and then monthly, and Citi reviews from 9 months and then every 12 months. Some issuers, such as Self, describe no upgrade at all.
Does a secured card build credit as fast as a regular card?
It is reported as a credit card account, so on-time payments count the same way. What matters is that the issuer reports to the bureaus and that you pay on time and keep the balance low.
Can I use the deposit to pay my bill?
No. You must make at least the minimum payment each month. The deposit is only returned at upgrade or closing.
Is there a secured card with no credit check?
Chime says its card has no credit check, and Self says its secured card needs no hard inquiry. Capital One and Discover say no credit score is required to apply, though Discover adds that it may use credit scores if available.
Can a secured card have an annual fee larger than 25% of my limit?
Not in the first year. Federal rules cap required fees in the first year at 25% of the starting credit limit. Late fees and optional fees are not counted, and neither is a deposit you pay from your own funds.
Does Wells Fargo have a secured credit card?
Its credit card page did not list one when we checked on October 29, 2026.
What is the highest secured card limit?
Among the cards we checked, Bank of America, U.S. Bank and Navy Federal accept deposits up to $5,000. Citi goes up to $2,500. Capital One and Discover cap the line between $1,000 and $3,000 depending on your credit.
This article is for general information and is not financial advice. Card terms (deposits, annual fees, APRs, reporting and graduation) were read on each issuer's own card page on 2026-10-29: Capital One, Discover, Citi, Bank of America, U.S. Bank, Navy Federal, DCU, Self and Chime. Fee rules are from Regulation Z, 12 CFR 1026.52 and its official interpretation (Supplement I, eCFR), read on 2026-10-29; consumer guidance from the CFPB; the credit union rate ceiling from the NCUA Board's 2026 extension. The fee example is hypothetical. APRs are variable and issuers change terms often; confirm the current terms with the issuer before you apply.
