Best Secured Credit Cards in Canada for 2021

 

Secured Credit Cards 

If you’re trying to build or rebuild credit and don’t think you’ll qualify for a regular credit card yet, you can learn more about secured credit cards below. Secured credit cards work differently than regular credit cards. They have unique pros and cons and additional considerations.

 

 

Details
Annual Fee: $12.95
Purchases Interest Rate: 17.99%
Cash Advance Interest Rate: 17.99%
Recommended Credit Score
Poor or No Credit (0-669)
Why we like it?
  • Great credit card to establish and rebuild your credit
  • Low security deposit
  • Interest free grace period
  • Lower interest rate
  • Free education to boost your financial skills
Apply Now Full Review
Why we like it

Refresh Financial offers consumers the simplest way to establish and rebuild their credit with their Secured Visa card. This card is a great fit for consumers with little or no credit, poor credit scores or bankruptcy history because there are no credit checks and minimum income requirements. All you need is a security deposit and you're approved.

  • Great credit card to establish and re-build your credit
  • Lower Interest Rate -The competitive rates will ensure you keep your payments manageable.
  • Free education to boost your financial education - The Refresh (f.i.t.) Financial Intelligence Training helps you increase your financial savvy so that you can be a better money manager.
Credit Card snapshot

Refresh Financial's Secured Visa Card helps you establish and rebuild your credit and improve your credit score.

Anyone with little or no credit, bankruptcy and consumer proposals can apply.

All you need is a security deposit to get approved. As you use your card and make monthly payments on time, they are reported to the credit bureaus and this builds your credit score.


Details
Annual Fee: $59
Purchases Interest Rate: 14.9%
Cash Advance Interest Rate: 19.8%
Recommended Credit Score
Poor or No Credit (0-669)
Why we like it?
  • Easy application
  • No annual fee
  • Flexible credit limit
  • Low minimum payments
  • Monthly reporting
Apply Now Full Review
Why we like it

The Home Trust Secured Visa is designed for individuals who need to rebuild or reestablish their credit. It offers easy approval for anyone and gives you a flexible credit limit, ranging from $500 to $10,000, depending on your security deposit. Of course, it also comes with other benefits such as a 21-day no-interest grace period and no annual fee.

Why We Like It:

  • Easy application – Start rebuilding your credit score immediately. Almost everyone is approved for this secured credit card.
  • No annual fee – You pay absolutely nothing to get and use this credit card.
  • Flexible credit limit – From a minimum deposit of $500, you can get a credit limit scaling at 1:1 all the way up to $10,000. The security deposit will also be reimbursed in full (minus the outstanding balance) should the credit card be cancelled in the future.
  • Low minimum payments – If you want to pay the minimum, you can pay whichever is higher: $10 or 3% of the monthly balance.
  • Monthly reporting – Home Trust reports your progress to major credit agencies each month – jumpstarting your credit repair.
Credit Card snapshot

Home Trust Secured Visa Card Review

The best way to get the credit you deserve.The application process is very simple and almost everybody is approved!

Build or re-build your credit, even if you’ve had credit difficulties in the past,
or have never had a credit card before! An excellent opportunity to establish your credit rating.

Virtually everyone is approved.

Get all the benefits of Visa* while re-building your credit:

  • Make purchases over the phone or online
  • Plan and book a vacation
  • Access cash anytime, anywhere from over 1 million ATMs around the world displaying the Visa or Plus logo
  • Shop at over 24 million locations worldwide

The Home Trust Secured Visa Card is not available to residents of Quebec.
Details
Annual Fee: $0
Purchases Interest Rate: 19.99%
Cash Advance Interest Rate: 19.99%
Recommended Credit Score
Poor or No Credit (0-669)
Why we like it?
  • Easy application
  • No annual fee
  • Flexible credit limit
  • Low minimum payments
  • Monthly reporting
Apply Now Full Review
Why we like it

The Home Trust Secured Visa is designed for individuals who need to rebuild or reestablish their credit. It offers easy approval for anyone and gives you a flexible credit limit, ranging from $500 to $10,000, depending on your security deposit. Of course, it also comes with other benefits such as a 21-day no-interest grace period and no annual fee.

Why We Like It:

  • Easy application – Start rebuilding your credit score immediately. Almost everyone is approved for this secured credit card.
  • No annual fee – You pay absolutely nothing to get and use this credit card.
  • Flexible credit limit – From a minimum deposit of $500, you can get a credit limit scaling at 1:1 all the way up to $10,000. The security deposit will also be reimbursed in full (minus the outstanding balance) should the credit card be cancelled in the future.
  • Low minimum payments – If you want to pay the minimum, you can pay whichever is higher: $10 or 3% of the monthly balance.
  • Monthly reporting – Home Trust reports your progress to major credit agencies each month – jumpstarting your credit repair.
Credit Card snapshot

No Fee Home Trust Secured Visa Card Review

The best way to get the credit you deserve.The application process is very simple and almost everybody is approved!

Build or re-build your credit, even if you’ve had credit difficulties in the past,
or have never had a credit card before! An excellent opportunity to establish your credit rating.


Get all the benefits of Visa* while re-building your credit:

  • Make purchases over the phone or online
  • Plan and book a vacation
  • Access cash anytime, anywhere from over 1 million ATMs around the world displaying the Visa or Plus logo
  • Shop at over 24 million locations worldwide

The Home Trust Secured Visa Card is a credit card that requires a security
deposit for eligibility. Your credit limit is then set at the amount of the
deposit. You can put down as little as $500, or as much as $10,000

The Home Trust Secured Visa Card is not available to residents of Quebec.

What Are Secured Credit Cards?

 

Secured credit cards are credit cards that require a cash deposit to use them. To obtain a secured credit card, you’ll have to deposit a particular amount of money with the credit card issuer. The deposit is typically one to two times the amount of the credit card limit.

 

For example, if you wanted a secured credit card with a $1,000 limit, you would need to make a deposit of $1,000 to $2,000. The deposit is security to the credit card issuer in the event that you do not repay your credit card debt.

 

Who Uses Secured Credit Cards?

 

Secured credit cards are frequently used by individuals who have no credit history or are in the process of repairing their existing credit. Other people who might use a secured credit card are new immigrants to Canada, people who want to conceal a particular purchase or individuals who aren’t old enough to apply for regular credit cards yet. Regardless of who is using a secured credit card, the primary use of them is to show lenders that you can responsibly manage debt.

 

Advantages and Disadvantages of Secured Credit Cards

 

As with all financial products, secured credit cards have their own set of pros and cons. Let’s explore them in depth below.

 

Advantages

 

  • Build or repair credit: If you have poor or no credit history, a secured credit card can help you build or repair your credit. This is a necessary step for individuals with big financial goals, such as to purchase a car or home.
  • Opportunity to obtain a regular credit card: Some secured credit card issuers offer their customers a regular credit card after a certain period of responsible credit management. If your goal is to get a regular credit card, this is a great way to segway.
  • Approval not an issue: Unlike with regular credit cards, there are no approval requirements aside from having a security deposit available.

 

Disadvantages

 

  • Higher interest rates: Secured credit cards have higher interest rates than regular credit cards. Typically, the rate is higher than 20%.
  • Security deposit unaccessible: Once you’ve paid the security deposit, you cannot access the funds unless you hand in the secured card.
  • Setup fees: Some lenders require a setup fee when you first obtain the card. The fee is usually a small percentage of the credit limit, but nonetheless, it's another cost to consider.

 

What Happens to the Security Deposit?

 

More often than not, your security deposit earns interest while you use the secured credit card. So long as you always pay your secured credit card on time and in full, the total security deposit plus earned interest will be returned to you when you hand in the secured card. If you don’t pay your secured credit card on time and in full every month, you’re risking losing your entire deposit.

 

How Long Until I Can Apply for an Unsecured Credit Card?

 

A good rule of thumb is 12 to 18 months, but it really depends on the credit card provider and your credit situation. While you wait, do your best to pay on time and in full every month. You should also take the time to work on your financial habits to ensure that you’re ready for more financial responsibility when you do obtain an unsecured credit card.

 

Is a Secured Credit Card Right for Me?

 

Unfortunately, no one can tell you what’s right for you, you’ll have to figure that out on your own! However, secured credit cards are ideal for those building or rebuilding credit. If you can get approved for a regular credit card, that is a better option which can also help you build or rebuild credit. If not, then a secured credit card is probably best for you. Before making a final choice, assess your finances and determine which credit card type makes the most sense for your circumstances. 

Author Bio

User
Mohamed Konate

Mohamed Konate is a personal finance expert, blogger, and marketing consultant based out of Toronto. He is a former financial services professional who worked for many years at major Canadian financial institutions where he managed the marketing strategy around various financial products ranging from credit cards to lines of credit. Mohamed is passionate about personal finance and holds a Bachelor in Business Administration from the University of Quebec (Montreal) and a Master in International Business from the University of Sherbrooke (Quebec).He is also the author of the Canadian Credit Card Guidebook.