The Best Secured Credit Cards of 2013

If you’re in the market for a secured credit card then you probably have below average credit and are looking to increase your credit score.  Unfortunately, most people with poor credit have to resort to high interest rates on loans or even the dreaded payday loan just to make ends meet. But one way to get out of the credit hole and build up a three digit credit score closer to 700 is with a secured credit card.

The difference between a secured and unsecured credit card lies in the name.  An unsecured credit card provides a consumer credit without having to put anything up as collateral.  If the consumer defaults, the credit card issuer has nothing to collect initially, and must go through the collection process to obtain the funds.  A secured credit card on the other hand requires a deposit up front, which is held in case payments are not made on time.  The amount of the deposit is equal to the consumers credit line and from that point on, the card acts like a normal credit card.

The main drawbacks to secured credit cards are their lack of rewards and high fees, but we’ve done our best to bring you the best secured credit cards available today, which include low fees.  Secured credit cards are a great way to rebuild credit, as all of the cards listed below report to the three major credit bureaus.  If you own a secured credit card that deserves to be added to our list, let us know!

PT’s Pick for the Best Secured Credit Card

Capital One® Secured MasterCard® Credit Card - Depending on how long you plan to keep your secured credit card, the Capital One Secured MasterCard Credit Card could end up being the cheapest secured card on our list in terms of fees.  Currently, there is only a $29 annual fee to keep this card.  The purchase APR is relatively high at 22.9% (variable).

Platinum Zero® Secured Visa® Credit Card from Applied Bank® – The Platinum Zero Secured Visa Credit Card from Applied Bank offers a higher credit limit than that of our favorite card, ($5,000) and does not include any application fees.  However, there is a monthly maintenance fee of $9.95 (billed after your first full year) which is applied, making the fee for owning this secured card quite high.  This card has a 0% APR on purchases for the life of the card, so if you carry a balance from month to month, the only cost is the $9.95 monthly fee beyond year one.   There are no other fees when using your Platinum Zero Secured Visa Credit Card from Applied Bank and you can change your credit limit at anytime.

Citi® Secured MasterCard® – The Citi Secured MasterCard offers consumers up to a $25,000 limit and includes a fee of only $29 annually.  Once you’ve maintained a good credit history with Citi for at least 18 months, your account will be reviewed with the chance to move from a secured to unsecured credit card.  The purchase APR is 18.24% however you cannot apply online.  The link you see will only take you to where the application must be printed and mailed.