Secured credit cards that report to credit bureaus

Secured credit cards, at their core, operate much like their traditional counterparts, with one significant difference: they require a security deposit. This deposit, which is generally equivalent to your credit limit, acts as collateral, ensuring that the credit card issuer isn’t taking on undue risk when granting you a card.

Yet, not all secured cards are made equal. It’s vital to ensure that the card you select reports to credit bureaus. By having a card that does, you enable your payment history to be tracked, which plays a pivotal role in determining your credit score. As a result, by consistently demonstrating responsible card use, making timely payments, and maintaining low balances, you have a valuable opportunity to boost your credit score.

Benefits of using a secured credit card that reports to credit bureaus

There’s a myriad of advantages to using a secured card, especially one that reports to credit bureaus:

• Foundational Credit Building: For those with no credit history or a tarnished one, secured cards offer a pathway to constructing or repairing credit. Your responsible behavior showcases your reliability to potential lenders.
• Escalate Your Credit Score: Credit scores, the vital three-digit numbers used by lenders to evaluate your creditworthiness, can be positively influenced with a secured card. A superior score not only increases the likelihood of loan approvals but also potentially qualifies you for preferable interest rates.
• Monetary Savings: An enhanced credit score can result in substantial savings, especially on significant loans. A mere difference in interest rates, say on a car loan, could mean thousands saved across its lifespan.
• Gateway to Varied Credit Types: As your creditworthiness augments, doors to diverse credit forms, such as unsecured credit cards, personal loans, and mortgages, may swing open.

How to choose a secured credit card that reports to credit bureaus

When scouring the market for a secured credit card, keep the following criteria in mind:

• Annual Fee: While some secured cards come with an annual fee, others might not. Depending on your budget, you might prefer cards without this added cost.
• Interest Rates: Generally, secured cards bear higher interest rates than their unsecured counterparts. However, if you’re planning to pay off your balance in full each month, this may not be a critical concern.
• Security Deposit Bracket: Secured cards often ask for a deposit ranging from $200 to $2,000. It’s paramount to select one that aligns with your financial capability.
• Rewards and Perks: Some cards offer attractive rewards programs, including cash back or travel bonuses. If you’re likely to use your card frequently, these rewards could be a beneficial feature.

• Reporting to Major Bureaus: To harness the full power of a secured card in elevating your credit, ensure that it reports to all three prominent credit bureaus: Equifax, Experian, and TransUnion.

Best secured credit cards that report to credit bureaus

To aid in your search, here are some top contenders in the secured card arena that report to all three major credit bureaus:

1. Discover it® Secured Credit Card: With a reasonable $200 security deposit and no annual fee, this card is a crowd-pleaser. The added cherry on top is its cash back program, offering 2% back at gas stations and eateries on combined purchases up to $1,000 each quarter.

   

2. Capital One Platinum Secured Credit Card: Requiring a $200 deposit and free from annual fees, this card might not offer rewards but compensates with features like fraud protection and travel insurance.
3. Bank of America® Secured Credit Card: Though there’s a $39 annual fee, this card balances it out with a cash back program, granting 1% back on all purchases, making it an option worth considering.