If you’re looking to rebuild or build your credit, secured credit cards are one of the best options available.
By using a secured credit card responsibly, you can improve your overall credit score and get on the path to financial health.
If you’re a student, new to Canada or self-employed, you might also struggle with building a good credit score.
Are you recovering from bankruptcy or recently insolvent and trying to rebuild your credit? That’s exactly why there’s such a thing as a secured credit card in Canada.
Think of a secured credit card as a nod to rebuilding your credit score and finances in general.
- Quick Comparison: Secured Credit Card in Canada of 2024
- In-Depth Review of the Best Secured Credit Card in Canada for Building or Rebuilding Credit
- 1. Overall Best Cashback Secured Credit Card in Canada → Neo Financial Secured Credit Card
- 2. Best No-Fee Secured Visa Credit Card: HomeTrust Secured Visa Card
- 3. Best Secured Card for Car Rentals: ATB Alberta Secured Credit Card
- 4. Best for Insurance: Capital One Secured Credit Card
- 5. Best Bank Secured Credit Card: TD Secured Credit Card, Canada
- What is a Secured Credit Card?
- How Does a Secured Credit Card Work?
- Secured vs Unsecured Credit Card
- Difference Between Prepaid and Secured Credit Cards
- How to Choose a Secured Credit Card in Canada
- FAQs: Best Secured Credit Card in Canada
- Final Thoughts: Best Secured Credit Cards in Canada
With the best-secured credit card in your arsenal, you’ll truly stand a chance to bounce back from setbacks.
Let’s dig in.
Quick Comparison: Secured Credit Card in Canada of 2024
|Best Secured Credit Cards in Canada
|Overall Best No-Fee Card and Unlimited Cashback: Neo Financial Secured Credit Card
|15% cash back on purchases
|HomeTrust Secured Visa Card
|$0 or $59 for low-interest
|19.99% (No Annual Fee Card) or 14.90% (Annual Fee Card)
|ATB Alberta Secured Credit Card
|Capital One Secured Credit Card
|Best Big-5 Bank: TD Secured Credit Card
In-Depth Review of the Best Secured Credit Card in Canada for Building or Rebuilding Credit
Our experts have researched and compared secured credit cards in Canada to help you find the best option for your needs.
With our guide, you can confidently choose a secured credit card that will help you achieve your financial goals.
1. Overall Best Cashback Secured Credit Card in Canada → Neo Financial Secured Credit Card
✅ Perks: Instant, Unlimited Cashback
✅ Guaranteed and Instant Approval
✅ Welcome Bonus: Exclusive $25 sign-up offer plus earn up to 15% cashback on first-time purchases at over 10,000 Neo partners
✅ Annual Fee: $0
✅ Credit Check: N/A
- Average Cashback: 5% cashback
- Credit Check: No – there is no hard credit check for the Neo Secured Credit Card
- Minimum Security Deposit: $50
- Credit limit: $50 – $10,000. Your credit limit will be equal to your security deposit
- Flexible Credit Limit: Increase or decrease your credit limit whenever you need
- Interest Rate / APR: 19.99%-24.99%
- Never miss a payment with auto-pay feature
2. Best No-Fee Secured Visa Credit Card: HomeTrust Secured Visa Card
- Credit Limit: $500 to $10,000
- Annual Fee: $0 or $59
- Approval: Guaranteed with a security deposit
- Welcome Bonus: N/A
- Credit Check: N/A
- Interest Rate: 19.99% or 14.90% if you pay a $59 annual fee
3. Best Secured Card for Car Rentals: ATB Alberta Secured Credit Card
- Credit Limit: $500 minimum
- Annual Fee: $49
- Approval: Guaranteed, If you meet the requirement
- Welcome Bonus: N/A
- Interest Rate: 19.99%
4. Best for Insurance: Capital One Secured Credit Card
- Credit Limit: $75 minimum
- Annual Fee: $59
- Approval: Guaranteed, If you meet the conditions
- Welcome Bonus: N/A
- Interest Rate: 19.80%
5. Best Bank Secured Credit Card: TD Secured Credit Card, Canada
For those looking to build their credit, the TD secured credit card Canada is a great option.
This card requires a security deposit, which acts as your credit limit. This deposit is 100% refundable if you close your account and there is no balance owed.
With responsible use, you can improve your credit score and qualify for a traditional credit card in the future.
The TD secured credit card is not available online.
To get one, simply visit your nearest TD Bank branch and speak to a banking specialist. They will be able to provide you with all the information you need about the TD secured credit card and help you submit your application.
What is a Secured Credit Card?
A secured credit card is a type of credit card that requires a security deposit in order to obtain and use the card.
The deposit acts as collateral for the credit card issuer and helps to reduce the risk of default. As a result, secured cards are often easier to obtain than unsecured cards, even for people with bad credit.
The security deposit is usually equal to the credit limit on the card, which means that if you deposit $500, you will have a $500 credit limit.
Secured cards are an excellent way to build or rebuild your credit, as they report to the major credit bureaus just like any other credit card. And, as you make on-time payments and keep your balances low, you can eventually qualify for an unsecured card with better terms.
If you’re looking for a secured card in Canada, there are a few things to consider.
- First, make sure that the card reports to at least one of the major credit bureaus in Canada.
- Second, look for a card with low fees and a reasonable interest rate.
- And finally, choose a card that offers some additional benefits, such as rewards or cash back.
With so many options available, it’s easy to find a secured credit card that’s right for you.
What’s the Fuss about Secured Credit Cards?
The fuss about secured credit cards in Canada is that it doesn’t matter if you’re a beginner/newbie in the game of credit scores or trying to bounce back from a financial rut; a secured credit card is the companion you need.
The best part of this type of card is that your credit score doesn’t matter. You need to meet the unique requirements highlighted by the provider to qualify. Don’t worry; most secured credit card providers won’t check your credit score.
You typically need to be a resident of Canada Canada. Most importantly, you’ll need to provide a security deposit to be approved. The security deposit doesn’t need to be too much. It usually ranges from $70 to $10,000. It’s all up to what you can afford. However, you should know that the amount you provide as a security deposit becomes your credit limit automatically.
Don’t panic; you can always increase the security deposit when you can, depending on the service provider. Secured credit cards help you grow your credit score while you spend.
But you have to select a secured credit card carefully. The reason is that some card providers offer better perks with the card compared to others. A major perk is that some Canadian secured credit cards (like the Neo Secured Credit Card) give you a chance to upgrade your secured card to an unsecured card.
This access is unlocked once your credit score hits the score that’s eligible for an unsecured credit card. More so, some grant you delicious travel benefits too.
How Does a Secured Credit Card Work?
To understand how a secured credit card works, it’s important to first understand what a credit card is.
A credit card is simply a loan that is extended to you by a financial institution. When you use a credit card to make a purchase, you are essentially borrowing money from the bank and agreeing to repay that amount, plus interest, over time.
A secured credit card works in much the same way, except that the loan is secured by a deposit that you make upfront.
For example, if you were to open a secured credit card with a $500 limit, you would be required to make a $500 deposit as well.
The deposit acts as collateral for the loan, which means that if you default on your payments, the bank can simply keep your deposit.
Otherwise, a secured credit card functions just like any other credit card and can be used to make purchases or withdraw cash from ATMs.
Just keep in mind that because the loan is secured by your deposit, you will only be able to borrow up to the amount of your deposit. As such, secured credit cards are best suited for those who are looking to build or rebuild their credit.
Whatever card you use, ensure they report to the credit bureau. That’s the only way your credit score will increase.
Secured vs Unsecured Credit Card
There are two main types of credit cards in Canada: secured and unsecured.
Secured cards are backed by a deposit that you make upfront, while unsecured cards are not. Both have their pros and cons, so it’s important to know which type of card is right for you before you apply.
Secured Credit Card
Generally speaking, secured cards are best for people with bad credit or no credit history. Because they involve a deposit, they’re less risky for lenders and, as a result, easier to get approved for.
Unsecured Credit Card
Unsecured cards, on the other hand, tend to have better rewards programs and perks but can be more difficult to qualify for if you have bad or no credit.
So which type of credit card is right for you?
If you’re not sure which type of card is right for you, consider your financial situation and credit history.
If you have good credit, an unsecured card may be the better option. However, if your credit is poor or you don’t have a credit history, a secured card may be your best bet.
Whichever type of card you decide on, be sure to compare offers from multiple issuers before applying to get the best deal.
Difference Between Prepaid and Secured Credit Cards
Prepaid cards are becoming increasingly popular, but secured credit cards are still the better option for people looking to build or improve their credit scores.
Both have their own advantages and disadvantages, so it’s important to understand the difference before choosing which one is right for you.
Prepaid cards are not tied to a credit score, so they can’t be used to help build your credit.
Instead, they function like a debit card, with the funds you load onto the card being spent as you make purchases. Once the balance on the card is depleted, you’ll need to reload it in order to continue using it.
Secured Credit Card
Secured credit cards, on the other hand, work like any other credit card. You’re borrowing money (your credit limit) and will need to make monthly payments toward your balance.
The security deposit you put down simply acts as a payment guarantee – it doesn’t mean that your card is paid off.
Because secured cards report activity to the credit bureaus, paying off your balance in full every month can help improve your credit score over time. Once you’ve established a good credit history, you may be eligible for an unsecured credit card.
So which type of credit card is right for you?
If you’re looking to build or improve your credit score, a secured card is the way to go. However, if you don’t want to worry about making monthly payments or impacting your credit score, a prepaid card may be a better option.
The Neo Secured Credit Card is NOT a prepaid card. Therefore, you can use it to build, rebuild, or increase your credit score as it reports to the two credit bureaus in Canada.
How to Choose a Secured Credit Card in Canada
You should consider certain factors before settling for a secured credit card in Canada. We’ll briefly glance over these features so you can choose the best.
1. Credit Bureau Reporting
The point of applying for a secured credit card is to build or improve your credit score. In that case, you should select a card provider that constantly reports to the credit bureau – Transunion and Equifax.
Some secured credit card providers do not report to the credit bureau. When that happens, your credit score won’t increase or decrease, and thus, it will not help you build or rebuild your credit.
So, look out for secured credit card providers who report to at least one or all credit bureaus in Canada.
✔️ Neo Secured Credit Card reports to both credit bureaus – TransUnion.
Get Your Free Equifax Credit Report with Borrowell
2. Ability to Upgrade
Sometimes, switching to unsecured credit cards is easier when the secured credit card provider you use provides that option. So, looking out for the upgrade feature is a great idea before subscribing to a secured credit card.
3. Minimum Security Deposit Required
The security deposit is another feature you should consider. What’s your budget like?
Can you give up $500 as a security deposit, knowing that you might not get it back if you can’t pay back what you owe over a long period? This would guide you to which card you should opt for.
With the Neo Secured credit card, you only need to put down $50 as a security deposit.
Some of the best-secured credit cards in Canada offer no-fee cards. But they have interest rates and other fee charges. You might want to opt for those if it benefits you in the other aspects.
The best-secured credit card currently in Canada with no fees is the Neo Secured Credit Card.
FAQs: Best Secured Credit Card in Canada
Do Canadian Banks Offer Secured Credit Cards?
Yes, Canadian banks offer secured credit cards.
Is Income Requirement Necessary to Get a Secured Credit Card?
No. Most secured credit cards do not require an income requirement.
How Does a Secured Credit Card Rebuild Your Credit Score?
A secured credit card rebuilds your credit score through your credit balance management and prompt repayment.
By using your secured credit card and making regular, on-time payments, you can prove to potential lenders that you are a responsible borrower.
Over time, this can help to improve your credit score and make it easier to qualify for loans with better terms and interest rates.
Can I Get a Deposit Refund from a Secured Credit Card?
Generally, it would help if you got a deposit refund when you pay off your balance and close the account or upgrade to an unsecured credit card. Nevertheless, there are rare cases where there’s no refund.
Carefully go through the terms and conditions to confirm the clause about deposit refund.
The good news is that with the Neo Secured Credit card, you get a deposit refund when you pay off your balance, close your account, or upgrade to an unsecured credit card.
What Is the Easiest Secured Credit Card to Get in Canada?
The easiest secured credit card to get in Canada is the Neo Secured Mastercard. Although many secured credit cards do not have cashback, the Neo Mastercard is a secured credit card with premium cashback rewards.
Final Thoughts: Best Secured Credit Cards in Canada
Almost all the credit cards on this list report to at least one of the credit bureaus in Canada.
With the right secured credit card in your wallet, be rest assured that you are on your way to building or rebuilding your credit score.
Now, the ball is in your court. So go ahead and select any one of your choice that meets your needs and pay the required security deposit, and you’re good to go.
More on Secured Credit Card, Canada:
- Best Guaranteed Secured MasterCard in Canada
- Best Secured Credit Cards in Canada
- Neo Financial Secured Credit Card
- Plastk Secured Credit Card
- Refresh Financial Secured Credit Card
Charity (Charee) Oisamoje is the founder of TheFinanceKey - TFK. She leads the editorial team, which is comprised of subject-matter experts.
Her professional competencies and expertise make her qualified on this topic. She is an expert at collecting details, verifying facts, and making complex subjects easy to understand.
Backed by Solid Credentials: MBA in Finance Canadian Investment Funds (IFIC) Graduate Masters Degree in International Business Chartered Professional Accountant (CPA) Candidate ✔️Chartered Insurance Professional (CIP) ✔️BSc Accounting
Learn More >> About Page
🏆 Best Credit Card Offers This Month
✔️ Get 2% unlimited cash back on all your purchases in three spending categories.
✔️ Receive a $150 welcome bonus for spending $1,000 in the first 2 months.
✔️ 0.5% unlimited cash back on all other purchases.
✔️ 1.95% low-interest rate on balance transfers.
✔️ Upgrade to the World Mastercard and receive mobile device insurance and travel benefits.
✔️ Get 5% unlimited cash back on all your purchases at 8,000+ partners.
✔️ Receive a $25 welcome bonus immediately upon approval.
✔️ 0.5%-1% unlimited cash back on all other purchases.
✔️ No minimum income requirement.
✔️ Add perks to make your card an all-in-one cashback card. Travel Cashback Card? Gas and Grocery Cashback Card? Increased Cashback? Yes!
✔️ Guaranteed & Instant Approval regardless of bad or no credit score.
✔️ Get 5% unlimited cash back on all your purchases at 8,000+ partners. 0.5%-1% unlimited cash back on all other purchases.
✔️ Receive a $25 welcome bonus.
✔️ The lowest security deposit requirement in the industry at only $50.
✔️ Requires no hard credit check to apply. New To Credit or Bad Credit? No Problem!