Secured credit cards are a type of credit card that require the cardholder to put down a security deposit, which serves as collateral in case the cardholder defaults on their payments. This security deposit is usually equal to the credit limit on the card, and it is typically held in a separate account by the issuer of the card.

Secured credit cards are often used by people who are trying to build or rebuild their credit score. Since the credit limit on a secured credit card is typically equal to the amount of the security deposit, cardholders can use the card to make purchases and payments just like a regular credit card. By using the card responsibly and making payments on time, cardholders can establish a positive credit history and improve their credit score over time.

Secured credit cards can be a good option for people who have a limited credit history, a poor credit score, or no credit history at all. Since the security deposit serves as collateral, secured credit cards are often easier to obtain than unsecured credit cards, which do not require a deposit but may have higher credit requirements.

Here are some of the best secured credit cards available in Canada:

1. Home Trust Secured Visa: This card has no annual fee and offers a low interest rate of 14.90%. The minimum deposit required to open the account is $500, and the maximum credit limit is $10,000.
2. Peoples Trust Secured Mastercard: This card has no annual fee and offers a low interest rate of 12.99%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
3. Refresh Financial Secured Visa: This card has a low annual fee of $12.95 and offers a low interest rate of 17.99%. The minimum deposit required to open the account is $200, and the maximum credit limit is $10,000.
4. Capital One Guaranteed Secured Mastercard: This card has no annual fee and offers a low interest rate of 19.80%. The minimum deposit required to open the account is $75, and the maximum credit limit is $25,000.
5. RBC Visa Classic Secured Credit Card: This card has an annual fee of $20 and offers a low interest rate of 17.99%. The minimum deposit required to open the account is $500, and the maximum credit limit is $50,000.
6. Desjardins Visa Desjardins Secured Card: This card has an annual fee of $50 and offers a low interest rate of 14.9%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
7. CIBC Dividend Visa Secured Credit Card: This card has an annual fee of $25 and offers a low interest rate of 17.99%. The minimum deposit required to open the account is $500, and the maximum credit limit is $50,000.
8. BMO Preferred Rate Mastercard: This card has an annual fee of $20 and offers a low interest rate of 12.99%. While this is not a secured credit card, it is designed for those with limited or no credit history and may be easier to qualify for.
9. Scotiabank Value Visa Card: This card has an annual fee of $29 and offers a low interest rate of 12.99%. While this is not a secured credit card, it is designed for those with limited or no credit history and may be easier to qualify for.
10. TD Emerald Secured Credit Card: This card has an annual fee of $25 and offers a low interest rate of 12.75%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
11. Canadian Tire Bank Guaranteed Mastercard: This card has no annual fee and offers a low interest rate of 19.99%. The minimum deposit required to open the account is $200, and the maximum credit limit is $10,000.
12. Capital One Secured Mastercard: This card has no annual fee and offers a low interest rate of 19.80%. The minimum deposit required to open the account is $75, and the maximum credit limit is $25,000.
13. Tangerine Money-Back Secured Credit Card: This card has no annual fee and offers cash back rewards of up to 2%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
14. Laurentian Bank Visa Explore Secured Credit Card: This card has an annual fee of $39 and offers a low interest rate of 14.90%. The minimum deposit required to open the account is $500, and the maximum credit limit is $10,000.
15. National Bank MC1 Mastercard: This card has no annual fee and offers a low interest rate of 19.99%. The minimum deposit required to open the account is $300, and the maximum credit limit is $10,000.
16. HSBC Secured Visa: This card has no annual fee and offers a low interest rate of 11.90%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
17. Rogers Bank Secured Mastercard: This card has no annual fee and offers cash back rewards of up to 1.75%. The minimum deposit required to open the account is $500, and the maximum credit limit is $25,000.
18. MBNA True Line Gold Mastercard: This card has an annual fee of $39 and offers a low interest rate of 8.99%. While this is not a secured credit card, it is designed for those with limited or no credit history and may be easier to qualify for.
19. Affirm Financial Mastercard: This card has an annual fee of $59 and offers a low interest rate of 29.99%. The minimum deposit required to open the account is $300, and the maximum credit limit is $3,000.
20. DUCA Visa Secured Credit Card: This card has no annual fee and offers a low interest rate of 12.50%. The minimum deposit required to open the account is $500, and the maximum credit limit is $10,000.

Here’s a table that compares some of the top secured credit cards in Canada:

Card details are subject to change, so it’s important to review the terms and conditions of any card before applying.

Secured credit cards for bad credit Canada

Here are some secured credit cards for bad credit in Canada:

1. Capital One Guaranteed Mastercard: The Capital One Guaranteed Mastercard is a secured credit card that is designed for people with bad credit or no credit history. The card requires a minimum security deposit of $75, and the credit limit is equal to the amount of the deposit.
2. Home Trust Secured Visa Card: The Home Trust Secured Visa Card is another option for people with bad credit in Canada. The card requires a security deposit of at least $500, and the credit limit is equal to the amount of the deposit.
3. Refresh Financial Secured Visa: The Refresh Financial Secured Visa is a secured credit card that is designed to help people build or rebuild their credit. The card requires a security deposit of at least $200, and the credit limit is equal to the amount of the deposit.
4. No-Fee Scotiabank Value Visa Card: The No-Fee Scotiabank Value Visa Card is a secured credit card that does not charge an annual fee. The card requires a security deposit of at least $500, and the credit limit is equal to the amount of the deposit.
5. Peoples Trust Secured Mastercard: The Peoples Trust Secured Mastercard is a secured credit card that is designed to help people with bad credit rebuild their credit. The card requires a security deposit of at least $500, and the credit limit is equal to the amount of the deposit.

Secured Credit Cards Pros

Here are some potential advantages of using a secured credit card:

1. Helps build or rebuild credit: By using a secured credit card responsibly, cardholders can establish a positive credit history and improve their credit score over time. This can be particularly helpful for people who have a limited credit history, a poor credit score, or no credit history at all.
2. Easier to qualify for: Secured credit cards are often easier to obtain than unsecured credit cards, which do not require a deposit but may have higher credit requirements. Since the security deposit serves as collateral, card issuers are often willing to extend credit to people with less-than-perfect credit scores or limited credit history.
3. Can be used like a regular credit card: Secured credit cards can be used to make purchases and payments just like a regular credit card, making them a convenient way to manage expenses and build credit at the same time.
4. Security deposit can be refunded: If the cardholder uses the secured credit card responsibly and makes payments on time, the security deposit may be refunded when the card is closed or upgraded to an unsecured credit card.
5. Some secured credit cards offer rewards: Some secured credit cards offer rewards programs, such as cash back or points, which can help cardholders save money on purchases or earn valuable rewards.

Secured Credit Cards Cons

1. Requires a security deposit: One of the main differences between a secured credit card and an unsecured credit card is that a secured credit card requires a security deposit. This deposit is typically equal to the credit limit on the card, and it may be a significant upfront expense for some people.
2. Higher fees and interest rates: Secured credit cards may have higher fees and interest rates than unsecured credit cards, which can make them more expensive to use. For example, some secured credit cards may charge annual fees, application fees, and other fees, as well as higher interest rates than unsecured credit cards.
3. Limited credit limits: Since the credit limit on a secured credit card is typically equal to the amount of the security deposit, cardholders may be limited in how much they can spend. This can be particularly challenging if they need to make a large purchase that exceeds their credit limit.
4. Security deposit is tied up: The security deposit on a secured credit card is typically held in a separate account by the card issuer, and it cannot be accessed by the cardholder. This can be frustrating for some people who may need the funds for other purposes.
5. Not all secured credit cards offer rewards: While some secured credit cards offer rewards programs, not all of them do. This means that cardholders may miss out on valuable rewards and cashback opportunities.

Secured Credit Cards Facts

Here are some facts about secured credit cards:

1. Secured credit cards require a security deposit: Unlike unsecured credit cards, which do not require a deposit, secured credit cards require a security deposit that serves as collateral in case the cardholder defaults on their payments.
2. The credit limit is typically equal to the security deposit: The credit limit on a secured credit card is typically equal to the amount of the security deposit, which means that cardholders may be limited in how much they can spend.
3. Secured credit cards can help build credit: By using a secured credit card responsibly and making payments on time, cardholders can establish a positive credit history and improve their credit score over time.
4. Some secured credit cards offer rewards: Some secured credit cards offer rewards programs, such as cash back or points, which can help cardholders save money on purchases or earn valuable rewards.
5. Secured credit cards may have higher fees and interest rates: Secured credit cards may have higher fees and interest rates than unsecured credit cards, which can make them more expensive to use.
6. The security deposit may be refunded: If the cardholder uses the secured credit card responsibly and makes payments on time, the security deposit may be refunded when the card is closed or upgraded to an unsecured credit card.
7. Secured credit cards are not the same as prepaid cards: Secured credit cards are different from prepaid cards, which require cardholders to load funds onto the card before they can be used. With a secured credit card, the security deposit serves as collateral, but cardholders can still use the card to make purchases and payments just like a regular credit card.
8. Secured credit cards can be a good option for people with limited credit history or poor credit scores: Since the security deposit serves as collateral, secured credit cards can be a good option for people who have a limited credit history, a poor credit score, or no credit history at all.

Secured Credit Cards FAQs

Here are some frequently asked questions about secured credit cards:

1. What is a secured credit card? A secured credit card is a type of credit card that requires a security deposit, which serves as collateral in case the cardholder defaults on their payments. The credit limit on the card is typically equal to the amount of the security deposit.
2. How does a secured credit card work? To obtain a secured credit card, the cardholder must make a security deposit with the card issuer. The credit limit on the card is typically equal to the amount of the security deposit. The cardholder can use the secured credit card to make purchases and payments just like a regular credit card. By using the card responsibly and making payments on time, the cardholder can establish a positive credit history and improve their credit score over time.
3. What are the benefits of using a secured credit card? Secured credit cards can be a good option for people with limited credit history, a poor credit score, or no credit history at all. By using the card responsibly and making payments on time, cardholders can establish a positive credit history and improve their credit score over time. Secured credit cards can also be easier to qualify for than unsecured credit cards, which do not require a deposit but may have higher credit requirements.
4. What are the downsides of using a secured credit card? Secured credit cards may have higher fees and interest rates than unsecured credit cards, which can make them more expensive to use. The security deposit may also be tied up and unavailable for other purposes. Additionally, secured credit cards may have lower credit limits than unsecured credit cards, which can be challenging if the cardholder needs to make a large purchase that exceeds their credit limit.
5. Can the security deposit be refunded? If the cardholder uses the secured credit card responsibly and makes payments on time, the security deposit may be refunded when the card is closed or upgraded to an unsecured credit card.
6. How can I choose the best secured credit card? When choosing a secured credit card, it’s important to review the terms and conditions of each card carefully, paying close attention to the fees, interest rates, and credit limit. It’s also a good idea to look for a card that reports to all three credit bureaus, as this can help improve the cardholder’s credit score over time.
7. How much should the security deposit be? The security deposit required for a secured credit card can vary depending on the issuer and the card. In general, the deposit is typically equal to the credit limit on the card. Some cards may have a minimum deposit requirement, while others may have a maximum deposit amount.
8. Can a secured credit card be upgraded to an unsecured credit card? Yes, some secured credit cards may be eligible for an upgrade to an unsecured credit card after a certain period of time, usually 6 to 12 months. To be eligible for an upgrade, the cardholder must use the secured credit card responsibly and make payments on time.
9. How can I use a secured credit card to improve my credit score? To use a secured credit card to improve your credit score, it’s important to use the card responsibly and make payments on time. Additionally, it’s important to keep the balance on the card low and avoid using too much of the available credit. By using the card in this way, you can establish a positive credit history and improve your credit score over time.
10. Can I be denied for a secured credit card? Yes, it is possible to be denied for a secured credit card. The card issuer may deny an application if the applicant does not meet the credit requirements or if they have a history of missed payments or defaults on other credit accounts. Additionally, the card issuer may deny an application if the applicant does not have enough money to make the required security deposit.
11. What is the difference between a secured credit card and a prepaid card? A secured credit card and a prepaid card are not the same. With a prepaid card, the cardholder must load funds onto the card before it can be used. With a secured credit card, the security deposit serves as collateral, but the cardholder can still use the card to make purchases and payments just like a regular credit card. Using a secured credit card responsibly can also help improve the cardholder’s credit score over time.
12. Can I get a secured credit card if I have bad credit? Yes, secured credit cards are often a good option for people with bad credit or no credit history. The security deposit serves as collateral, which means that the card issuer may be more willing to extend credit to people with less-than-perfect credit scores.
13. Can I use a secured credit card to make purchases online? Yes, secured credit cards can be used to make purchases online just like a regular credit card. Some card issuers may offer additional security features for online purchases, such as one-time use card numbers or fraud protection.
14. How do I make the security deposit for a secured credit card? The security deposit for a secured credit card must be made when the card is opened. The card issuer may allow the deposit to be made by check, money order, or electronic transfer. The deposit will be held in a separate account by the issuer and will be returned when the card is closed or upgraded to an unsecured credit card.
15. Do all secured credit cards report to the credit bureaus? Not all secured credit cards report to all three credit bureaus. When choosing a secured credit card, it’s important to look for a card that reports to all three bureaus, as this can help improve your credit score over time.
16. What happens if I miss a payment on my secured credit card? If you miss a payment on your secured credit card, you may be subject to late fees and interest charges. Additionally, missing a payment can have a negative impact on your credit score. It’s important to make payments on time and in full to avoid these consequences.
17. Can I withdraw money from a secured credit card? Most secured credit cards do not allow cash advances or withdrawals. If you need cash, you may need to use a different form of payment, such as a debit card or cash.
18. How can I get my security deposit back from a secured credit card? If you use your secured credit card responsibly and make payments on time, you may be able to get your security deposit back when you close the account or upgrade to an unsecured credit card. The process for getting your deposit back may vary depending on the card issuer.
19. Can I use a secured credit card to build credit if I have a bankruptcy on my credit report? Yes, a secured credit card can be a good option for people with a bankruptcy on their credit report. By using the card responsibly and making payments on time, cardholders can begin to rebuild their credit history and improve their credit score over time.
20. How long does it take to build credit with a secured credit card? The amount of time it takes to build credit with a secured credit card can vary depending on the individual’s credit history and payment behavior. Generally, it can take several months or even a year to see significant improvements in credit score. However, by using the card responsibly and making payments on time, cardholders can establish a positive credit history and improve their credit score over time.