Best secured credit cards in Canada 2024

Fact Checked: Amy Tokic

🗓️

Updated: May 01, 2024

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For newcomers to Canada, those recovering from bankruptcy, or individuals keen on rebuilding their credit, secured credit cards serve as the pathway to financial independence. We've narrowed down the top secured credit cards available in Canada. Furthermore, we'll assist you in comparing essential features such as interest rates, security deposits, and additional benefits.

Discover the card that aligns perfectly with your journey towards a stronger credit future and learn everything you need to know to make an informed decision. 

Best secured credit card

Neo Secured Credit Card

Apply now

$25 on signup

Poor

$25 customer sign up bonus welcome offer

Up to 15% on first new purchases with Neo partners

15%

With Neo Partners

5%

on gas and groceries

1%-3%

Streaming, ridesharing, and food delivery services

3%-4%

With retail partners

2%-3%

On everything else

0.5%

Variable APR

19.99% - 26.99%

Cash Advance APR

24.99% - 28.99%

Annual Fee

$0

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • No annual fee

  • Low minimum security deposit

  • Cash back rewards on purchases

  • Instant approval regardless of credit score

Cons

  • Only reports to TransUnion

  • High APR range

Pros

Pros

  • No annual fee

  • Low minimum security deposit

  • Cash back rewards on purchases

  • Instant approval regardless of credit score

Cons

Cons

  • Only reports to TransUnion

  • High APR range

Home Trust Secured Visa Card

Details
  • Annual fee: $0
  • Interest rate: 19.99%
  • Minimum/maximum deposit: Set your own credit limit between $500 and $10,000

Eligibility criteria: A credit score in the 300 to 579 range.

Upgrade path: You can upgrade to the annual fee version to reduce your interest rate to 14.90%.

Extra info: Your application could be declined due to factors like insufficient income or a history of missed payments, but generally, Home Trust has a high approval rate.

Pros and cons

Pros

Pros

  • Reports to both Equifax and TransUnion, aiding in credit building.

  • High approval rate, even for those with poor credit or recovering from bankruptcy.

  • Lower foreign transaction fee of 2%.

Cons

Cons

  • No rewards or significant perks.

  • A monthly inactivity fee of $12 if the card is not used for 12 months.

Capital One Guaranteed Secured Mastercard

Details
  • Annual fee: $59
  • Interest rate: 19.8% on purchases, cash advances and balance transfers.
  • Minimum/maximum deposit: Security deposit of either $75 or $300 is required.
  • Credit limit: Starts at $300 or more, depending on the application details.

Eligibility criteria: No minimum annual income required, but applicants cannot have a current Capital One account, must not have applied for a Capital One card in the last 30 days and not have had a Capital One account in good standing within the last year.

Upgrade path: Not explicitly mentioned, though there is the Capital One Low Rate Guaranteed and Capital One Guaranteed card that may not require a security deposit.

Pros and cons

Pros

Pros

  • Guaranteed approval: Ideal for individuals with bad credit history, as approval is almost certain.

  • Credit building: Reports to both credit bureaus, aiding in credit score improvement.

  • Security deposit refund: Deposit is fully returned upon closing the account and paying off the balance.

Cons

Cons

  • Annual fee: Higher than some other secured cards at $59.

  • Limited credit limit increase: The initial credit limit is relatively low and you might have to show good habits over a longer period of time.

  • No rewards or perks: Lacks cash back or points rewards.

  • How we chose the best secured credit cards in Canada

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    Money.ca adopts a thorough and objective methodology specifically for reviewing secured credit cards in Canada. Our rating system, which assigns scores from 1 to 5 in tenths, is based on a set of criteria particularly relevant to secured cards. This approach ensures that the ratings accurately reflect the value and suitability of each card for individuals looking to build or rebuild credit. The criteria for secured cards include factors such as Annual Percentage Rate (APR), annual fees and foreign transaction fees, which are crucial for users who are focused on cost-effectiveness and budget management. Additionally, aspects like a card's security features, customer service quality, and a card's acceptance both domestically and internationally are also considered, as these are vital for ensuring a convenient and safe user experience.

    Money.ca's ratings are independent and unbiased, unaffected by any business relationships. This impartiality ensures that the ratings genuinely represent the card's features and benefits. The process involves regular updates and communication with credit card issuers to keep the information current and accurate. When offer details change, Money.ca's editorial team promptly revises their content, ensuring that readers always have access to the most recent and relevant information. This meticulous approach in evaluating secured credit cards helps consumers make informed decisions, especially those who are new to credit cards or are in the process of rebuilding their credit history.

Read more: What is a secured credit card?

13 factors to consider when choosing a secured credit card in Canada

  • 1. Deposit requirement: Look for a card with a deposit that fits your budget. Some cards require as little as $50, while others may ask for several hundred dollars. The deposit will typically be your max credit limit.
  • 2. Interest rates: Compare the interest rates for purchases and cash advances. Lower rates are preferable, especially if you might carry a balance.
  • 3. Annual fees: Some secured cards charge annual fees. Decide if a fee is worth it for you, considering any additional benefits the card may offer (lower interest rate, rewards, etc).
  • 4. Credit bureau reporting: Ensure the card reports to major credit bureaus in Canada, like Equifax and TransUnion—crucial for building your credit history. If the card only reports to one, it may affect your overall credit building because some lenders will look at one bureau and not the other. 
  • 5. Additional benefits: Look for cards offering perks like cash back, insurance coverage, or low foreign transaction fees. These extras can add value to your card. Ask yourself what will benefit you the most. 
  • 6. Eligibility requirements: Check if there are specific eligibility criteria, such as income requirements, citizenship, or restrictions related to bankruptcy history.
  • 7. Brand recognition: Opt for cards from recognized brands like VISA, Mastercard, or American Express for wider acceptance and reliability.
  • 8. Minimum and maximum security deposit requirements: Understand the minimum and maximum limits for the security deposit. This flexibility should align with your credit building goals. 
  • 9. Graduation path to an unsecured card: Ask if the card offers a transition to an unsecured card with responsible usage. It’s a significant milestone in credit building. 
  • 10. Foreign transaction (FX) fees: Worth considering if you plan to use the card abroad or for international purchases.
  • 11. Application process: Some cards may offer instant approval, while others might take longer. Don’t apply to multiple cards at the same time as this could hurt your chances of acceptance (and your credit score). 
  • 12. User reviews: Check user reviews, especially on platforms like Reddit, to gauge real-world experiences.
  • 13. Opportunities to increase your credit limit: Find out if there are options to increase your credit limit over time, which is helpful for your credit utilization ratio and ultimately your credit score. 

How to apply for a secured credit card in 8 steps

Applying for a secured credit card in Canada typically involves the following steps:

  • 1. Research and compare: Start by researching different secured credit cards. We’ve listed the best ones above, many banks don’t currently offer secured cards (see more below). Compare their features, fees, interest rates and benefits. Use online resources, user reviews and sites such as money.ca to gather information.
  • 2. Check eligibility: Ensure you meet the eligibility criteria for the card you're interested in. This usually includes being the age of majority in your province, having a Canadian address and sometimes specific income or employment requirements.
  • 3. Gather necessary documents: You’ll need proof of identity (like a driver's license or passport), proof of address (like a utility bill) and financial information (like bank statements or pay stubs).
  • 4. Fill out the application: Apply online (just click on the apply buttons above), or by phone, or in-person at a bank branch, depending on the issuer's process. Fill in all required information accurately to avoid delays.
  • 5. Submit deposit: If approved, you'll need to provide the security deposit, which sets your credit limit. This can usually be done via a bank transfer or a cheque.
  • 6. Wait for approval: After submitting your application and deposit, there will be a processing period. The time frame varies by issuer but is generally quick.
  • 7. Activate your card: Once you’re approved and you receive your card by mail, follow the issuer’s instructions to activate it. This might involve calling a number or activating it online.
  • 8. Start using the card: Begin using your card for purchases and make sure to pay your bills on time to start building your credit. You can use it for monthly subscriptions like streaming services and online purchases, too. 

Remember, each credit card issuer may have slightly different processes and requirements, so it's important to read the specific instructions provided by the issuer of the card you choose.

12 tips when using a secured credit card in Canada

  • 1. Pay on time: Always pay your credit card bill on time. Late payments can negatively impact your credit score (yes, even if it is your money).
  • 2. Keep your balance low: Maintain a low balance relative to your credit limit. Aim for a credit utilization ratio under 30% to positively affect your credit score. For example, if your limit is $1,000, try not to carry more than $300 (30%). 
  • 3. Pay in full when possible: Try to pay off your entire balance each month to avoid interest charges and reduce the risk of debt accumulation.
  • 4. Use the card regularly: Regular activity is important. Use the card for small, manageable purchases to ensure that the card issuer reports positive activity to the credit bureaus. We recommend subscription services like Netflix, Amazon, Spotify, or anything that charges a small amount that’s easy to pay off. 
  • 5. Monitor your credit score: Regularly check your credit score to track your progress and understand the impact of your credit habits. You can do this for free with Equifax and TransUnion, or even your bank. 
  • 6. Budget wisely: Plan your expenses and stick to a budget to avoid overspending with your secured card.
  • 7. Avoid additional cards: Stick to one secured card while you're building credit. Managing multiple cards (or other users of your cards) can be challenging and may lead to high debt levels.
  • 8. Understand terms and fees: Be fully aware of all the terms, fees and interest rates associated with your card to avoid costly mistakes.
  • 9. Graduate to an unsecured card: After 12 months of responsible use, explore options to upgrade to an unsecured card—a positive step in your credit building journey.
  • 10. Don’t close the card prematurely: If there are no fees for inactivity, keep your secured card open even after you get an unsecured card because closing it can shorten your credit history and potentially lower your credit score.
  • 11. Avoid cash advances: Steer clear of cash advances due to their high fees and interest rates. They can quickly lead to expensive debt.
  • 12. Seek financial advice if needed: If you're unsure about managing credit or debt, don't hesitate to consult with a financial advisor for personalized guidance.

By following these tips, you can use your secured credit card as an effective tool to build a strong credit history and lay the foundation for a healthy financial future.

How to build credit with a secured credit card

A secured credit card can help you start building a credit history (if you don’t have one) or improve your credit score (if you have bad credit). Unlike a prepaid card, the activity on your secured credit card will be included in your credit report. A prepaid card doesn’t extend credit, so your account activity won’t be reported to credit bureaus—and therefore won’t help you build a credit history.

Ideally, your card should report to both major credit bureaus in Canada, including Equifax and TransUnion. Some cards may only report to one, or to neither, which won’t help you build your credit—so keep that in mind when researching your options.

But it’s a double-edged sword: If you miss payments, that will also be reported to the credit bureaus. And, since secured credit cards tend to come with lower limits, it’s easier to increase your credit utilization, which in turn could be bad for your credit score.

The key to building better credit is simple: Use your card responsibly. Pay your bills on time, try to pay off your balance in full or, at the very least, carry as low a balance as possible. If you’re able to maintain a positive payment history, your lender may increase your limit over time or offer to upgrade you to an unsecured card—and, in the process, give you your deposit back.

Summary: 3 best secured credit cards in Canada

Features Neo Secured Credit Card Home Trust Secured Visa Card Capital One Guaranteed Secured Mastercard
Annual fee $0/$59 $0 $59
Interest rate 19.99%-29.99% 19.99% 19.80%
Minimum deposit $50 $500 $75-$300 (they decide)
Maximum deposit $10,000 $10,000 Not specified, but $1,000 is in their conditions
Pros Cashback rewards
Low minimum deposit
Reports to credit bureau (TransUnion)
Graduation path
No annual fee option
Reports to credit bureaus
Visa benefits
Graduation path
Guaranteed approval
Reports to credit bureaus
MasterCard benefits
Security deposit refund
Cons Annual fee
Limited acceptance
High interest rate
Limited benefits
Monthly inactivity fee
Annual fee
Limited credit limit increase
No rewards
Eligibility criteria Canadian resident
Age of majority
Not in bankruptcy
Canadian resident
Age of majority
Not in bankruptcy
Canadian resident
Age of majority
Not in bankruptcy
Upgrade path Yes Yes Not specified, but Capital One offers 5 other credit cards
Read review Neo Secured Credit Card review Home Trust Secured Visa Card review Capital One Guaranteed Secured Mastercard review
Apply Get started Get started Get started

Secured credit card FAQs

  • Who should use a secured credit card?

    +

    Secured credit cards are ideal for individuals with no credit history or those looking to rebuild credit after financial setbacks like bankruptcy or late payments.

  • Do secured credit cards build credit?

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    Yes, secured credit cards can build credit. Responsible use, including timely payments, is reported to credit bureaus, positively impacting your credit score.

  • Is it possible for secured credit card applications to be declined?

    +

    Yes, applications for secured credit cards can be declined. Reasons include extremely low credit scores, unresolved bankruptcies, or insufficient income for the minimum deposit.

  • How much is a security deposit on a secured credit card?

    +

    Security deposits for secured credit cards vary, typically ranging from $50 to several hundred dollars, depending on the card issuer and the desired credit limit.

  • How do I increase my limit on a secured credit card?

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    To increase your limit on a secured credit card, you can usually add to the deposit amount, or the issuer may offer an increase after a period of responsible card use.

  • How fast will a secured credit card build my credit?

    +

    A secured credit card can start improving your credit within a few months, but significant credit building typically requires consistent, responsible use over a longer period, like a year or more.

  • What is the smartest way to use a secured credit card?

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    The smartest way to use a secured credit card is to make small, manageable purchases, pay your bill in full and on time each month, and keep your credit utilization low.

  • What not to do with a secured credit card?

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    Avoid late payments, maxing out your credit limit and using the card for cash advances. These practices can lead to high fees, interest and negatively impact your credit score.

  • Should I max out my secured credit card?

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    No, you should not max out your secured credit card. High credit utilization can hurt your credit score. Aim to use less than 30% of your available credit limit.

  • What happened to the Plastik secured credit card?

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    All Plastik Visa cards were cancelled on August 31, 2023. After this date, their usage was disabled. For information on account history, making payments, or returning security deposits, customers needed to contact Plastk directly.

  • What is the best TD secured credit card?

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    TD currently doesn't list secured credit cards on their website, but inquiring at your local branch could reveal options. Branches might offer standard unsecured TD cards as secured versions, potentially providing you with excellent choices for your credit needs.

  • What is the best RBC secured credit card?

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    RBC doesn’t currently offer a secured credit card, but you don’t need a credit card from the same people you bank with.That said, there is the RBC® Visa Classic Low Rate option for $20 per year (waived in the first year), which offers a 12.99% interest rate with no minimum income requirement, but you’ll need a credit score above 600.

  • What’s the best CIBC secured credit card?

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    CIBC does not currently offer a secured credit card. The CIBC Select Visa waives the first year $29 annual fee and charges a 13.99% interest rate. You’ll need a fair credit score (660+) and meet a minimum of $15,000 income requirements.

  • What’s the best BMO secured credit card?

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    BMO does not have a secured credit card in Canada. The BMO Preferred Rate Mastercard®* has a $29 annual fee, a low 13.99% interest rate and typically has a special balance transfer offer. You’ll need a credit score of 660 and above to qualify, but there is no minimum income requirement.

  • What’s the best Scotiabank secured credit card?

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    Scotiabank doesn't offer a secured credit card. The Scotiabank Amex card has no annual fee, but typically requires a credit score above 760 and a minimum income of $12,000. For newcomers to Canada, they do have the Scotiabank Startright program where they’ll give you up to $15,000 in credit without any credit history—call them at 1-866-800-5159.

  • What’s the best Tangerine secured credit card?

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    Tangerine doesn't have a secured credit card. The Tangerine Money-Back Card has a $0 annual fee, but a $12,000 minimum income requirement and a recommended credit score of 660+.

Tyler Wade Content strategist & writer

Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.

Disclaimer

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