Rough Credit History? Get a Secured Credit Card


It’s hard to bounce back from tough financial times when your credit score is on its knees, especially if you’re still slaving away to pay off your credit cards.

Maybe you were forced to declare bankruptcy, foreclose on your home, cover unexpected medical expense, or you’re establishing credit for the first time. In all of these scenarios, getting approved for a credit card with a credit score in the poor range, 550 and below, is hard. But it’s not impossible.

A secured credit card is the best tool to help you establish or rebuild your credit. Most secured cards offer guaranteed approval, so you can finally get your hands on credit in order to build great credit history. Plus, secured cards require a security deposit which essentially safeguards you from defaulting on payments. It’s like training wheels in the world of credit to help you learn to manage credit responsibly, without too much risk of falling down.

RELATED: Trying to Pay Off Your Credit Cards? Top Mistakes to Avoid

Before you sign up, consider the pros and cons of a secured credit card.


  • The low credit limit prevents you from getting in over your head with debt as you attempt to build your credit back up.
  • If you default on payments, your payment comes out of the security deposit you paid so that you won’t receive negative marks on your credit history or go into debt. Plus, your credit activity is reported to the bureaus so you will receive the credit-building benefits of owning and using a credit card.
  • If you demonstrate responsible credit use and on-time payments, you can request an increase in your credit limit or convert to an unsecured credit card.


  • You must have some cash saved up to use for the security deposit, which is usually at least $200.
  • Most secured credit cards have one-time activation fees and annual fees, as well as high penalties for late payments and over-the-limit charges.
  • You’ll start off with a low credit limit, since the limit is set at the amount of the security deposit or a percentage of that amount.
  • Secured credit cards generally have high interest rates.

If you’re in the market for a secured credit card, look for one that has low fees and make sure the issuer reports your credit activity to the credit bureaus.

We recommend the Public Savings OPEN SKY Secured Visa credit card, with an annual fee of $50 and a late payment fee of $20. With this card you can get a credit limit from $200 to $3,000. Public Savings doesn’t perform a credit check and is a guaranteed approval card.

The Orchard Bank Classic MasterCard is another good choice; it requires a $200 minimum security deposit and has an annual fee of $35, which is waived for the first year. Card users can set up email and text message alerts to remind them of upcoming payment due dates.

As with all credit cards, a secured card must be used responsibly. Pay your balance in full each month and on time, keep your credit utilization rate below 30%, and you’ll be making the right moves to get your credit score on track.

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Credit Karma™ is a completely free credit management service that provides free credit scores, financial education, and personalized savings recommendations. We help more than 2 million consumers realize the everyday cost savings of having a good credit score.

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    Please be advised corporation, “HSBC Nevada, N.A.’s “Orchard Bank” secured credit card is under current complaint and initial investigation as cited to (4) State Attorney General’s offices’ Consumer Fraud and Protection divisions and bureaus, for collusion in participating and supporting consumer fraud and ID theft – for inadvertent gain scenarios stemming from utility service providers billing disputes, as of 06-23-11.  States cited include Texas, Nevada, California and New York.  “HSBC Nevada, N.A./Orchard Bank’s” on-going refusal to resolve a billing dispute with utility service provider, “Atmos Energy” as stated per Orchard Bank’s disclosure agreement – for usage on a non-owner occupied property – had rendered “HSBC Nevada, N.A.’s “Orchard Bank” accountable, reported and cited for violations of (10) applicable, verifiable and designated State & regional legislations.  Per Dodd-Frank/CPA, the cited legislation is enforceable through the CFPB, and as “HSBC Nevada, N.A. “Orchard Bank” is a FDIC primary and relevant consumer complaints and citations have been filed with the OCC, FDIC and the FTC for suspected illegal transactions regarding suspected bank fraud for inadvertent gain scenarios.  Documented consumer complaints regarding, “HSBC Nevada, N.A.” Corporate  billing practices supported by mismanaged customer service workflow procedures and practices have evidenced causation for Federal and State government entities to begin investigation and evaluation of “HSBC Nevada N.A.”, for product liability and product misrepresentation on behalf vendor, “MasterCard Worldwide”.   Under applicable compliance regulations in regards to vendor product, “Orchard Bank Secured Classic Master Card “, and “HSBC Debit MasterCard with PayPass”, consumers are under risk for ID theft and fraudulent activity resulting from inadvertent gain scenarios.