The Best Secured Credit Cards in Canada

Do you have bad credit? 

Our list of the Best Secured Credit Cards in Canada can help you get back on track, and enjoy the convenience of having a credit card option to make online purchases with.

Credit card companies tend to look for good-to-excellent credit scores when they’re considering applications. If your credit score is less than excellent – or if it’s nonexistent – you’re not likely to get approved for the cards we usually feature on our site. That’s where secured credit cards come in.

Secured credit cards are designed for people who don’t have good credit. Because you pay a security deposit to the card company, you’re more likely to be approved, no matter what your credit score is—in fact, some companies don’t check your credit at all. A year or two with a secured credit card can help you build (or rebuild) your credit to the point where you may be approved for a typical (unsecured) credit card.

Here’s the best of what Canada has to offer for people with bad (or no) credit:

TOP 4 SECURED CREDIT CARDS COMPARED

Card

Best For

Fees

Interest Rate

Security Deposit

Learn More

Hometrust Secured Visa

Hometrust Secured Visa

Low Interest Rate

$59

14.99%

$500-$10,000

Hometrust Secured Visa

Hometrust No-Fee Secured Visa

No Fees

$0

19.99%

$500-$10,000

Plastk Secured Visa

Plastk Secured Visa

Rewards

$48 plus $6/month ($120 total)

17.99%

$300-$10,000

Capital One Guaranteed

CIBC Select Visa

Guaranteed Approval + Perks

$59

19.8%

$75 or $300 (credit limit $300-7,000)

What Exactly Are Secured Credit Cards?

Secured credit cards are designed with two goals in mind:

  • To help people with bad credit repair their credit score.
  • To help people with no credit build a credit score.

In the eyes of a credit card company, people with no credit and bad credit both constitute potential risks for lending. If you have no credit, the company has no way of knowing whether you’ll handle their loan responsibly and pay your debt. If you have bad credit, the company can see that you may not have handled your debt responsibly in the past and may be reluctant to issue a credit card for that reason. Secured credit cards take the risk out of the equation for the credit card issuer while still allowing you to build credit (or repair your credit score).

When you open a secured credit card, you send a security deposit to the card company, then they issue you a credit card. The credit limit of the card usually starts out as the same amount you sent in, but it’s not a prepaid card—it’s an actual, working Visa or Mastercard. The card company holds the security deposit for you, much like a rental company holds a damage deposit for an apartment. Secured credit cards are called that because the loan you receive is “secured”‚—that is, you have given the lender a deposit as collateral to reduce their risk.

You can use a secured credit card like you would any credit card, being sure to pay your bill monthly. The card company reports to the credit bureaus regularly, which builds your good credit. If you fail to pay your bill, the company closes your card and keeps the security deposit. However, if you keep your account in good standing by paying your bills regularly and on time, and raise your credit score enough, you will eventually be able to qualify for a more traditional (unsecured) credit card and close your secured card. When that happens, the company will return your deposit.

Secured Credit Cards vs. Prepaid Cards

People often confuse prepaid cards and secured credit cards because they both involve sending the card company a hefty cheque to use the card. But beyond that similarity (and we understand why that would feel the same) the two cards function very differently.

Here’s a comparison between secured credit cards and prepaid cards to help make the differences clear:

Prepaid Cards:

  • Are not actually credit cards
  • You load them with money and then spend it.
  • There is no loan involved, and the company does not report to credit bureaus.
  • You cannot use prepaid cards to improve your credit (notice that the correct term is “prepaid card” and not “prepaid credit card” —there’s a reason for that)

Secured credit cards:

  • You send the card company a cheque, but it’s set aside.
  • You are then issued a secured credit card, which functions just like a regular credit card, with monthly bills and fees.
  • The company reports regularly to the credit bureau.
  • When you are finished with the card, you get your deposit back.
  • You can use a secured credit card to improve your credit.

Secured Credit Cards: Pros and Cons

PROS:

  • You can often get approved for a secured credit card when you wouldn’t get approved for a standard credit card. Some cards guarantee approval, and they often don’t take your credit rating or income into account.
  • They report to credit bureaus
  • Can help you repair or build your credit

CONS:

  • You must come up with a security deposit to obtain the card, and that can be a challenge. If you have outstanding debts, you may want to pay those off first
  • Almost all secured credit cards have annual fees, and some also have monthly fees
  • Rewards are rare and perks are limited

Canadian Secured Credit Cards: Do Your Research and Know Your Priorities

Your personal financial situation will determine whether a secured credit card is right for you (and if it is, which one will be best for your needs). We recommend taking a good look at your finances before you begin looking for a card. The information in this article is a great starting point, but we can’t know exactly what will work best for your personal circumstances. The best secured credit card for you is just that—the best secured credit card for you.

Best Secured Credit Card with No Annual Fee: HomeTrust No-Fee Secured Visa

HomeTrust offers two secured credit cards, both of which are featured in this Best Secured Credit Cards list. The Home Trust No-Fee Secured Visa is worth considering because no-fee secured credit cards are rare—as you’ll see on our list, it’s more typical to pay at least $50/year for a card.

Despite charging no annual fee, the HomeTrust No-Fee Secured Credit card offers a 19.99% interest rate, which is on par with any average fixed-rate credit card on the market right now. They’ve been featured on several Best Secured Credit Card lists this year, and it’s easy to see why.

Annual Fee: $0

Security Deposit: $500-$10,000 (credit limit is the same as the security deposit)

Interest Rate: 19.99%

Perks:  90-day purchase security

The HomeTrust Secured Credit Card is a bare-bones card in terms of perks, offering 90-day purchase security only. However, they do what they do extremely well: offering cardholders with bad or no credit a reliable option that works just like a regular Visa card and doesn’t cost anything other than the security deposit.

Note: this card is not available to residents of Quebec

Best Secured Credit Card with Low Interest: HomeTrust Secured Visa

HomeTrust’s low interest secured credit card option comes with an annual fee of $59 but offers a competitive interest rate of 14.99%. If you’re likely to carry a balance on your card, you could save a significant amount of money with this option, depending on your credit limit.

For example, a cardholder with a $5,000 balance who pays $200 toward their debt every month will end up paying $1,031.77 in interest with this card, as opposed to $1521.02 on the no-fee card. Even if you factor in several years’ worth of annual fees, that’s still a savings of several hundred dollars.

Annual Fee: $59

Security Deposit: $500-$10,000 (credit limit is the same as the security deposit)

Interest Rate: 14.99%

Perks:  90-day purchase security

HomeTrust has been in business since 1977 and has a reputation for helping Canadians achieve their financial goals. In the case of their secured credit cards, this reputation is well earned. Our editorial team appreciates their commitment to offering a lower interest option for Canadians with bad or no credit.

Note: this card is not available to residents of Quebec

Best Secured Credit Card with Rewards: Plastk Secured Visa Credit Card

Most secured credit cards are designed with a single purpose in mind, which means that perks are generally minimal at best, and rewards are nearly unheard of. The Plastk Secured Credit Card stands out because it gives cardholders rewards earning potential, plus a welcome bonus, and that’s worth celebrating.

Plastk gives cardholders a welcome bonus of 5,000 points (a $20 value) if their account remains in good standing after 3 months. They also give new cardholders 0% APR for the first 3 months. Cardholders earn rewards points for all purchases at a rate of 1 point per dollar spent, with no cap on the amount they can earn. Plastk also offers a referral program that allows cardholders to earn bonus points for sharing their link.

Annual Fee: $48 plus $6/month maintenance fee ($120 total)

Security Deposit: $300-$10,000 (credit limit is the same as the security deposit)

Interest Rate: 17.99%

Welcome Bonus: 0% APR for the first 3 months, 5,000 points ($20 value) after the first 3 months

Earn rate: 1 point per dollar spent, unlimited rewards

Perks:  

  • Referral Program (earn extra rewards points)
  • 25-day grace period
  • Monthly credit score, credit education, and insights

Plastk’s fees are higher than the other cards on our list: a $48 annual fee plus a $6 maintenance fee, which puts the total fees at $120 annually. However, they do provide cardholders with the feel of a typical credit card that could be worth the cost, especially if rewards are important to you. And with unique perks like a monthly credit score and credit education, plus an interest rate that’s lower than many, it’s earned its spot on our list.

Best Secured Credit Card with Guaranteed Approval and Best Perks: Capital One Guaranteed Secured Mastercard

The Capital One Guaranteed Mastercard is on this list for two reasons:

1. It actually does have a guaranteed approval.

2. It has the most generous set of perks we found—including travel insurance

Some cards claim to guarantee approval and don’t deliver, but in the case of the Capital One Guaranteed Secured Mastercard, as long as you’re over the age of majority and you don’t have an existing Capital One account, a pending application for one, or a past account not in good standing, you’re good to go.

The Capital One Guaranteed Secured Mastercard is one of the few secured credit cards that doesn’t necessarily tie your credit limit to the amount of security funds they require. Capital One will process your application and then tell you whether you need to send $75 or $300. Your credit limit may be higher than your deposit. However, this is a double-edged sword: Capital One reserves the right to lower your credit limit at any time without telling you in advance, whereas with other cards, your credit limit is dictated by the amount of your security deposit, and is therefore predictable.

Annual Fee: $59

Security Deposit: $75-300 (credit limit is not necessarily the same as the security deposit)

Interest Rate: 19.8%

Travel Insurance:

  • 250,000 common carrier travel accident insurance
  • Car rental insurance up to 31 days
  • Up to $100/day for up to 3 days if baggage is delayed by 4 hours or more

Perks:  

  • 60-day Price Protection
  • Purchase Assurance (120 days)
  • Extended Warranty (up to 2 years)

The thing that really stands out for us, in addition to Capital One’s approval guarantee, is their set of perks. Not only does this card offer Price Protection, Purchase Assurance, and an Extended Warranty for up to 2 years (better than many unsecured credit cards out there), it also offers travel insurance.

Capital One Guaranteed Secured Mastercard cardholders and their family members receive common carrier travel accident insurance as well as car rental and baggage insurance. It’s not a huge amount of coverage compared to some more premium cards, but it’s nearly unheard of among secured credit cards.  Our team appreciates a card that offers something extra, and the Capital One Guaranteed Secured Mastercard does.

Canadian Secured Credit Cards FAQ

Canadian Secured Credit Cards Comparison: Final Verdict

If you have bad credit or no credit history, it doesn’t have to stop you from getting a credit card and building your credit. The Best Secured Credit Cards in Canada vary in interest rates, fees, and perks, but they’re all quality cards that are worth a closer look.

The editorial team particularly appreciates HomeTrust’s Annual Fee Secured Visa option, which gives cardholders a lower interest rate for a reasonable annual fee. If you’re likely to carry a balance, it could save you some serious cash. Apart from that, Plastk’s rewards program is a game-changer in the secured credit card market—but at a hefty (or heftier) price.

A secured credit card is a great way to take steps towards good credit while giving you the convenience of a Visa or Mastercard. Once your credit has improved, some credit card companies will offer you an unsecured credit card to replace your secured card. At that point, you could also shop around for a card that could work for you—our lists of The Best Free Rewards Credit Cards or The Best Low Interest Credit Cards are great places to start.

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Meg Goodmanson

Meg is a writer, editor, virtual assistant, credit card expert, and lifelong learner-of-things. A self-proclaimed nerd, Meg’s favourite thing is collecting information and presenting it in an interesting and helpful way—especially if it helps her travel for free!
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