Bad Credit? Secured Credit Cards With Rewards

Bad Credit? Secured Credit Cards With Rewards
Bad Credit? Secured Credit Cards With Rewards

Bad Credit? Secured Credit Cards With Rewards

If you have bad credit, secured credit cards require an upfront refundable deposit that becomes your credit limit. They offer a way to build or rebuild credit through on-time payments. But can secured cards also earn rewards?

In fact, several secured card options now provide cashback or points along with reporting to the credit bureaus. These rewards help offset some of the costs while using the card responsibly builds your credit profile.

In this guide, we’ll highlight secured credit cards that offer cashback rewards or points and compare their earning structures. We’ll also discuss other features that make these secured cards valuable for establishing or repairing credit.

How Secured Credit Cards Work

Secured credit cards require an upfront security deposit that becomes your credit limit. Key features include:

  • Deposit amount ranges from $49 up to several hundred dollars based on your creditworthiness
  • Deposit is fully refundable after closing the account in good standing
  • Payments report to the credit bureaus to build history and scores
  • Easy approval odds for those with bad credit or no prior credit history
  • Typically charge annual fees around $25-$49

Now let’s look at secured card options that provide rewards on top of credit building capabilities.

Capital One Secured Mastercard


  • 2% cash back on dining and entertainment
  • 1% cashback on all other purchases

Other Perks:

  • Credit limit matching refundable deposit up to $200
  • No minimum deposit if approved
  • No annual fee

Approval Requirements:

  • Limited or no credit history
  • FICO scores below 580
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With rewards and no fees, Capital One’s secured Mastercard helps establish credit at no cost.

Discover it® Secured Card


  • 2% back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
  • 1% back on all other purchases

Other Perks:

  • Rewards never expire
  • Cashback match at the end of your first year
  • No annual fee

Approval Requirements:

  • Little or no prior credit history
  • No/poor credit score

Discover matches all the rewards you earn in the first year to accelerate your earnings potential.

Citi Secured Mastercard


  • 2 ThankYou® Points at grocery stores and gas stations for the first $6,000 per year
  • 1 ThankYou® Point on all other purchases

Other Perks:

  • Low security deposit requirement starting at $200
  • Credit limit increase opportunities without added deposit
  • No annual fee

Approval Requirements:

  • Limited credit history (2 years or less)
  • Poor/fair credit score

Citi provides valuable opportunities to increase your limit – and credit score – without needing to add to your security deposit.

BankAmericard® Secured Credit Card


  • 1% cash back on all purchases
  • 3% back in a category you choose – gas, online shopping, dining, etc

Other Perks:

  • As little as a $49 minimum deposit
  • $0 Fraud Liability Guarantee
  • Credit score monitoring
  • No annual fee

Approval Requirements:

  • Limited or poor credit history
  • No social security number required

Qualifying for Bank of America’s BACASI program allows graduating to an unsecured card in as little as 7 months.

Navy Federal nRewards Secured Card


  • 1 point per $1 spent on all purchases
  • 5,000 bonus points when spending $5,000 within 90 days
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Other Perks:

  • Deposits of $100 to $5,000
  • No annual fee
  • Option to add authorized users

Approval Requirements:

  • Navy Federal credit union membership eligibility
  • Past credit difficulties

Members have access to other Navy Federal Visa cards later to continue earning rewards after graduating from secured status.

Tips for Using Secured Cards Responsibly

Here are some tips to manage your secured card responsibly as you build credit:

  • Only charge planned purchases that fit your budget
  • Pay your monthly bill on time and always pay at least the minimum due
  • Keep utilization low by paying off large purchases quickly
  • Set up account alerts for key activity like due dates and large charges
  • Avoid maxing out your credit limit to prevent harming your utilization
  • Monitor your credit report routinely to check improvement
  • After 6+ months, request graduation to an unsecured card

Transitioning from a Secured to Unsecured Card

With responsible use of a secured card, issuers will often graduate you to an unsecured card over time:

  • Navy Federal, Citi and others provide pathways to unsecured cards
  • You’ll receive your security deposit back when graduating
  • Ask your issuer about graduation if not notified after 6-12 months
  • Graduating shows you’ve earned back trust and improved your credit risk profile
  • Unsecured cards offer more rewards redemption options and higher earnings

Rebuilding Credit with Secured Cards

Along with diligent payments, secured cards can help rebuild credit through:

  • Adding an active account in good standing
  • Raising your total credit limit and number of open accounts
  • Establishing recent positive payment history
  • Lowering your overall credit utilization by adding available credit
  • Diversifying credit mix by adding an installment loan
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Just allow time and stick to good habits to demonstrate changed behavior. Monitor your credit reports and scores to track your progress.

Closing Thoughts on Secured Card Rewards

While rewards may be lower than unsecured cards, secured cards with cashback, points or miles help offset costs as you rebuild credit. They provide better value than old-fashioned secured cards with no rewards.

Just be sure to make all payments on time and keep utilization low. Follow issuer guidelines to graduate to unsecured status, and you’ll be earning with the big dogs in no time. But never take rewards as justification to overspend. Focus first on improving your financial health through responsible habits.

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