The Top Secured Credit Cards In Canada

The Top Secured Credit Cards In Canada

Written by Veronica Ott
Fact-checked by Caitlin Wood
Last Updated September 10, 2021

Like other financial products, traditional unsecured credit cards require that you meet certain criteria, including having a healthy credit score. After all, the creditor is letting you spend money that’s not really yours, and a good credit score will give them some peace of mind knowing that you’re good for the money and will make your payments as they come due.

But what if you have bad credit? Or what if you have no credit at all? What can you do to build your credit while still being able to use a credit card?

That’s where secured credit cards come into the picture. Unlike unsecured credit cards that allow you to spend up to a certain credit limit of money that’s not yours, secured credit cards require you to make a security deposit before you start spending. So in essence, you’re spending your own money. 

It sounds a bit like a debit card, but a secured credit card can do a lot more for you; namely, help you to build credit. With every timely payment that you make, you can slowly and steadily build credit, since most secured credit cards report your activity to the credit bureaus. Over time, responsible payment activity you can give your credit score the boost it needs to finally be eligible to upgrade yourself to an unsecured credit card. 

If you have bad credit or no credit, you may want to consider getting yourself a secured credit card, and we’ve rounded up the best ones for Canadians.

How Does A Secured Credit Card Work?

A secured credit card requires a cash deposit to use. Secured credit cards are also referred to as guaranteed credit cards. 

Typically, the cash deposit becomes the credit card’s limit. Although it depends on the credit card provider, some will require a higher cash deposit for a lower credit limit. Secured credit cards are designed for higher-risk borrowers which is why a deposit is required. In the event that the credit card user defaults, the credit card issuer will keep the deposit to repay the owed balance. 

Other than the fact that security is required, a secured credit card is the exact same as a regular credit card. You will be able to make purchases in-store, online, through payment processing services, and use it to pay bills.

Do you know the difference between a secured credit card and a prepaid credit card? Find out here.

Advantages And Disadvantages

All financial products have corresponding pros and cons. Before getting a secured credit card, it’s important to understand all of the advantages and disadvantages so you know what you’re getting yourself into. Below is a list of all the advantages and disadvantages of secured credit cards. 

Advantages

  • Build or Rebuild Credit. If you have no credit history or poor credit, a secured credit card is one of the easiest ways to build or rebuild credit. So long as you make payments on time and in full, you will be amazed at how quickly your credit improves.
  • Introduction to Credit Use. If you’re new to credit entirely, a secured credit card is a great introduction to what it’s all about. It can help you prepare for larger credit commitments in the future.
  • Little to No Requirements. To qualify for a secured credit card, you need to be the age of majority in your province or territory and have the funds available for the deposit – that’s all.
  • Versatile Purchase Options. You might be thinking, why go through the hassle of getting a secured credit card if I already have the cash available for use? Cash is a limiting payment option these days. With a secured credit card, you can make purchases online, in-store, through payment processing services, and more.

Disadvantages

  • High Interest and More Fees. Most secured credit card users are perceived to be a higher risk in the eyes of lenders. For this reason, interest rates tend to be higher and more fees are applicable. 
  • Doesn’t Fix Bad Financial Habits. If you’re getting a secured credit card to rebuild credit, the card itself won’t fix your bad habits. You still need to work on your spending habits which can be tough.
  • Can’t Access Deposited Funds. Once the cash deposit has been given to the credit card issuer, you won’t be able to access the funds until the end of the card’s term. Be sure that you don’t require the cash for anything else since it will be tied up for quite some time.

Check out these 8 secured credit card myths, click here.

When Should You Use A Secured Credit Card?

If you’ve never heard of a secured credit card, you might be wondering what instances where using one would be favourable. Secured credit cards actually have many uses and purposes compared to what you might initially think. A list of common secured credit card uses follows below. 

  • Build credit history if none exists
  • Rebuild credit if credit is currently poor
  • Alternative to regular credit cards if having trouble obtaining one
  • Use to make an anonymous or one-time purchase
  • Recently moved to Canada

Secured vs. Prepaid

The major key difference between a prepaid credit card and a secured credit card is where the money comes from. 

Purchases

  • When you make purchases using a secured credit card, you are borrowing money from your credit card provider, which you repay at a later date. 
  • When you make a purchase using a prepaid credit card, you are using your own money. Prepaid cards are loaded with your own money that you can later use to make purchases.  

Credit Score

  • When you make a purchase using a secured credit card, the payments are reported to the credit bureaus, which can help build your credit. 
  • When you make a purchase using your prepaid credit card, it is not recorded to the credit bureaus because you are not borrowing money that must be repaid. It is simply a tool that allows you to manage your spending and make purchases.

The Top Secured Credit Cards In Canada

You’ve made it this far along which must mean you’re interested in getting a Canadian secured credit card. Not all secured credit cards were made equal, below are the top five secured credit cards in Canada along with what you can expect when applying and using the card.

Learn how to increase your credit score without increasing your debt, click here

Refresh Financial Secured Visa

Refresh Financial Secured Visa

  • Annual Fee: $12.95
  • Interest Rate: 17.99%
  • Minimum credit limit: $200 
  • Maximum credit limit: $10,000
  • Maintenance fee: $3/month

Build your credit with money that you already have with the help of the Refresh Financial Secured Visa. Approval is guaranteed without a credit check, as long as you’re able to deposit a minimum amount that will serve as your credit limit. If you would like to contribute more than the $200 minimum you can do so up to $10,000.

Refresh Financial Secured Visa has a low annual fee and a lower than industry standard interest rate. This can bring individuals with poor credit or no credit peace of mind when applying. It also offers free online financial education courses to their card users with the goal of improving its customer’s financial literacy. Lastly, Refresh takes your specific financial situation into consideration based on your credit score, location, income, budget, and financial goals.  

Learn More

Plastk Secured Visa Credit Card

  • Annual Fee: $48 (plus a monthly fee of $6)
  • Interest Rate: 17.99%
  • Minimum Deposit: $300

The Plastk Secured Visa Credit Card is the only secured credit card that offers a premium rewards program. As a cardholder, every purchase you make will earn you points that that you can redeem at a later date. Every dollar you spend on your Plastk card will earn you at least 1 point. Points can be redeemed for, merchandise, gift cards, travel, exclusive event, and charities.

In addition, to a great rewards program, the Plastk secured credit card can help those looking to improve their credit. All payments are reported to the largest credit bureau in Canada — Equifax, which can help you improve your credit. Because of this, the Plastk secured card is a great option for consumers who are having trouble gaining access to a traditional credit card and students or new Canadians looking to build credit.

Learn More
Home Trust Secured No-Fee Visa

Home Trust Secured Visa Card

  • Annual Fee: $0 or $59
  • Annual interest rate: 19.99% APR with no annual fee, 14.9% with an annual fee
  • Minimum credit limit: $500
  • Maximum credit limit: $10,000
  • Insures eligible items for 90 days after purchase if damaged or stolen
  • Credit check required

The Home Trust Secured No-Fee Visa allows consumers to build credit without being charged any annual fees. Approval isn’t guaranteed, though approval rates are pretty high at about 95%. Shop and pay online with your secured card much like you would with a conventional credit card. Set your own deposit limit (minimum of $500) and only pay interest if you carry a balance. 

If you are prepared to pay your balance in full every month, this is an ideal card for you. There is no annual fee if you agree to a higher interest rate. Although, the interest rate will not impact you so long as you make payments on time and in full. If you don’t intend to make full, timely payments every month, you’re a revolving credit card user, then the annual fee with lower interest is the best option with this card. The paid version of this credit card has an annual fee of $59 (or $5 paid monthly). The fee is offset by a lower APR of 14.99% versus the no-fee card’s APR of 19.99%.

Vancity enviro Secured Visa Card
  • Annual Fee: $0 – $395
  • Interest Rate: 11.25% or 19.50%
  • Minimum Deposit: $500

The Vancity secured credit card is a great option for residents of British Columbia who have struggled with financial issues in the past but are now back on track and ready to rebuild their credit. This secured credit card works slightly different than other secured cards. To start you will need to open a Vancity TFSA or high-interest savings account and invest at least $500. Your investment will act as your security and you’ll be issued a credit card with a limit equal to your investment. Another benefit is that you’ll be able to earn interest on the security amount because it’s been invested. 

TD Cash Secured Credit Card

TD Secured Credit Card

  • Annual Fee: $29
  • Annual interest rate: 22.99% APR
  • Minimum credit limit: $500
  • Earn 1% cash back on eligible purchases
  • No limits with accounts in good standing
  • Redeem rewards for cash back and gift cards

The TD Cash Secured Credit Card is great for building or repairing your credit while also giving you the benefit of earning cash back on all your expenditures. You can use it like any other card to make purchases both in-person and online and earn rewards. If you use the card wisely, not only will you be improving your credit score, but you‘ll also have the ability to upgrade to an unsecured card.

The TD secured credit card requires a deposit upfront which then becomes the credit limit. There is an annual fee and high interest, but there are other unique benefits to using this card. So long as you manage the card successfully by making payments on time and in full for seven continuous months, you will become eligible for an unsecured credit card with TD. This card will definitely help you along the path to improved credit and personal finances.

Capital One Guaranteed Secured Mastercard

Capital One Guaranteed Secured Mastercard

  • Minimum Deposit: $75
  • Credit limit: $300
  • Guaranteed approval
  • Annual interest rate: 19.8% APR
  • Annual fee: $59
  • Increase credit limit up to $2,500
  • Emergency card replacement if your card is lost or stolen
  • Emergency cash advance
  • 24/7 telephone access 

The Capital One Guaranteed Secured MasterCard is a great option for Canadians who are just starting to build their credit or are in the process of repairing it. Approval is guaranteed, and the card is supported by Mastercard, so you can use it anywhere that MasterCard is accepted (which is just about everywhere). You’ll also be protected against credit card fraud thanks to the card’s built-in liability protection. The Capital One Guaranteed credit card also has one of the lowest minimum deposits on the market making it easier to commit to. However, the low minimum deposit is offset by the annual fee and high-interest rate. The annual fee is unavoidable, unfortunately, but as long as you always pay off your full balance every month, you can dodge any interest charges.

Learn More

Need help choosing the right credit card for your needs? Check out this article

No-Fee Scotiabank Value Visa

No-Fee Scotiabank Value Visa

  • Annual fee: $0
  • Annual interest rate: 16.99%
  • Minimum credit limit: $500 
  • 25% discount as participating Budget or Avis locations
  • Optional protection in the event of job loss, strike, disability, illness, or death

Start building your credit without having to pay any annual fees with the No-Fee Scotiabank Value Visa. Right now, you can snag an introductory interest rate of only 3.99% on balance transfers for the first 6 months after getting the card (then pay 16.99% after that). The card also offers as much as 25% discounts when you pay for a car rental using your card at eligible Budget or Avis car rental locations.

Secured Credit Cards Overview

Annual FeeInterest RatesMin. Deposit
Refresh Financial Secured Visa$12.9517.99%$200
Plastk Secured Visa Credit Card$48 (+$6 monthly fee)17.99%$300
Home Trust Secured Visa Card0$ or $59– 19.99% (no annual fee)
– 14.9% (with annual fee)
$500
Vancity enviro Secured Visa Card$0 – $395– 11.25%– 19.50 %$500
TD Secured Credit Card$2919.9%$500
Capital One Guaranteed Secured Mastercard$5919.8%$75
No-Fee Scotiabank Value Visa$016.99%$500

How To Pick The Right Secured Credit Card

There are a number of secured credit cards out there, so how do you choose which one is best for you? Here are a few things to consider when picking a secured credit card.

  • They report to credit bureaus to help you build credit
  • You can afford the secured deposit minimum 
  • There is an option to increase your credit limit down the line
  • There are unsecured credit card options you can upgrade to when the time is right
  • Annual fees are low
  • Annual interest rate is competitive
  • Rewards or points can be earned on expenditures

How To Get The Most Value From A Secured Credit Card

Secured credit cards are powerful tools to help both establish and improve credit, but only when used responsibly. To make the most out of your secured credit card, consider the following:

  • Only use the card for a handful of small purchases every month.
  • Make your payments in full every month before the due date. This will help you build your credit score and avoid paying interest.
  • Keep tabs on your credit score every so often. If it has increased quite a bit, ask your creditor about an upgrade to an unsecured credit card.

Secured Credit Card FAQs

Can my secured credit card application be rejected? 

It may come up as a surprise, but you can get denied for a secured credit card. Despite, providing a deposit to your lender for security, certain factors can cause your lender to deny your application for a secured credit card. Bankruptcies, multiple missed payments, accounts in collections, etc. can cause your application to be denied by some lenders. If you are unsure as to why your lender has rejected you, you have the legal right to ask for an explanation. It is important to ask, as it can provide you with direction on what you should be trying to improve. 

Can a secured credit card affect my credit score?

Getting a credit card when you have really bad credit can be extremely difficult. That’s where a secured credit card comes in. It is a powerful tool that is designed to help borrowers with poor credit to rebuild their credit. Every payment you make is reported to the credit bureaus, which in time helps you build your credit enough to get an unsecured credit card. It can take as little as a year before you can reap the benefits of an unsecured credit card such as the low-interest rate, lower fees, and reward points

How can a secured credit card help me?

If you have low or no credit and are unable to get approved for a traditional unsecured credit card, then you may have to resort to a secured credit card. A secured credit card gives you the chance to either build your credit score from the ground up if you’re just starting out, or it can help you repair a bad credit score after a history of poor financial behaviour. If you use it responsibly, not only can you build up a good credit score, but you’ll open up more opportunities to secure other financial products, including mortgages and personal loans. 

Secure A Better Financial Future

Regardless of your financial situation, secured credit cards can help you build or rebuild credit and are a great introduction to credit in general. Of course, there are annual fees and interest rates to consider along with establishing and improving financial habits. Secured credit cards are simply an excellent tool to secure a better financial future.


Rating of 5/5 based on 7 votes.

Veronica is a writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veronica is not writing, she enjoys film, reading, travelling, going to the gym, and listening to music.

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