What you need to do to open a secured card
A secured credit card requires you to put money into a savings account that the card issuer holds as collateral. You then receive a credit card with a limit equal to (or sometimes slightly higher than) that deposit. The card works like any other — you make purchases, receive a bill, and pay it back. The difference is that if you stop paying, the issuer can take the money from your deposit instead of sending you to collections.
To open a secured card, you will need to choose a bank or credit card company that offers one, complete an process, make an initial deposit, and wait for approval. The whole process usually takes one to two weeks from process to receiving your card in the mail.
Key Takeaways
- You must have a deposit ready before you explore — typically between $200 and $2,500, depending on the card issuer.
- The card issuer will run a credit check and verify your identity, so have your Social Security number and a government-issued ID ready.
- Your credit limit will match your deposit amount, so depositing $500 means you get a $500 limit.
- After 6 to 18 months of on-time payments, many issuers will convert your card to an unsecured card and return your deposit.
- You will pay an annual fee (usually $25 to $95) in addition to interest on any balance you carry.
Gather the documents and information you will need
Before you start an process, collect the following: your Social Security number, a government-issued photo ID (driver's license, passport, or state ID), proof of your current address (a recent utility bill or lease), and your employment information if you have a job. Some issuers also ask for your annual income.
You will also need to decide how much you can deposit. Most secured cards require a minimum deposit of $200 to $500, and some allow deposits up to $2,500. Your deposit becomes your credit limit, so think about what spending level makes sense for you. If you deposit $500, you get a $500 limit; if you deposit $1,000, you get a $1,000 limit.
Choose a secured card issuer and review the terms
Major banks and credit unions offer secured cards, including Capital One, Discover, U.S. Bank, and many others. Each has different deposit requirements, annual fees, and interest rates. Before you explore, compare a few options side by side.
Pay attention to the annual fee (the amount you pay each year just to have the card), the interest rate (called the APR, or annual percentage rate), and any other charges. Some cards charge a processing fee when you open the account. Also check whether the issuer reports your payment history to all three credit bureaus — Equifax, Experian, and TransUnion — because that is how the card helps your credit score.
Read the terms carefully to see when the issuer will consider converting your card to unsecured. Most require 6 to 18 months of on-time payments before they will review you for conversion and return your deposit.
Complete the process online or in person
Most secured card issuers let you explore online through their website. You will enter your personal information, Social Security number, income, and employment details. The issuer will ask how much you want to deposit and will run a credit check to verify your identity and assess risk.
Some banks also let you explore in person at a branch. If you prefer to speak with someone or have questions during the process, visiting a local branch may be easier. Either way, the process itself takes 10 to 15 minutes.
The issuer will tell you when ready or within a few business days whether you are approved. If you are approved, they will give you instructions for making your deposit.
Make your deposit and set up your card
Once approved, you will receive instructions on how to fund the savings account that secures your card. Most issuers let you transfer money from a bank account you already have, either online or by phone. Some allow you to mail a check or deposit cash at a branch.
Your deposit must be in the account before your card is activated. After the issuer confirms the deposit has arrived, they will mail your physical card to you. This usually takes 5 to 10 business days. Some issuers also provide a temporary card number you can use online while you wait for the physical card to arrive.
When your card arrives, follow the set up instructions (usually a phone call or a visit to the issuer's website). Once activated, you can start using it when ready.
Use your card and make on-time payments
Start using your card for small, regular purchases — groceries, gas, a subscription service — and pay the full balance on time each month. This is how you build credit history. The issuer reports your payment activity to the credit bureaus, and on-time payments raise your credit score over time.
Set up automatic payments if your bank allows it, so you never miss a due date. Even one late payment can hurt your score and may delay your conversion to an unsecured card. Keep your balance low — ideally below 30 percent of your credit limit — because high balances also affect your score.
Request conversion to an unsecured card
After 6 to 18 months of on-time payments (the timeline varies by issuer), contact the card company and ask whether you are ready for conversion. Some issuers will convert automatically and notify you; others require you to request it. When you convert, the issuer closes the secured account, returns your deposit to you, and opens a new unsecured card account with a new credit limit.
Your new limit may be higher than your deposit was, depending on your payment history and credit score. The issuer may also lower your interest rate or waive the annual fee. If the issuer denies conversion, ask what you need to do to be considered again in the future.
Frequently Asked Questions
What happens to my deposit if I close the card?
If you close the account, the issuer will return your deposit to you, usually within 5 to 10 business days. However, closing the card can hurt your credit score because it reduces the total credit available to you and shortens your credit history. Keep the card open even after conversion if you can, and use it occasionally to maintain the account.
Can I increase my credit limit?
Yes, but usually only by increasing your deposit. If you want a higher limit, contact the issuer and ask whether you can add more money to your savings account. The issuer will increase your credit limit to match the new deposit amount. You cannot increase your limit without increasing your deposit on a secured card.
Will a secured card hurt my credit score?
No. Opening a secured card does a hard inquiry on your credit, which may lower your score by a few points temporarily. But as you make on-time payments, your score will rise. Secured cards are designed to help people build or rebuild credit, and they work when you use them responsibly.
What if I cannot afford the deposit right now?
If you do not have the deposit saved, wait until you do. Putting money aside for a few weeks or months is better than overextending yourself. Some credit unions offer cards with lower deposit requirements than banks, so you could also ask your credit union whether they have a secured card option.
Can I use a secured card while I am rebuilding my credit?
Yes, that is the main reason to get one. A secured card is meant for people with no credit history or poor credit. As long as you make on-time payments and keep your balance low, the card will help your score improve over time, usually within 6 to 12 months.