If you want to repair your credit score, a secured credit card is one of your best options. As there are interest rates involved, it may seem safer to use cash. However, this hurts your credit score because you need credit transactions to build up a credit score and history. If you can make sure you can afford whatever you’re charging to your secured credit card and make payments on time, there is no risk and you’ll see an increase in your credit score quite quickly.

A secured credit card works a bit differently than a traditional credit card although they function the same when you pay for something. Before you get a secured credit card, you have to put down a deposit. This deposit is sometimes equal to the amount of credit you want on the card. However, in some cases, the deposit is a percentage of the credit limit. The whole purpose of the deposit in order to secure a credit card is to protect the lender in case you don’t pay back credit used. 

A secured credit card is based on the same principles as a secured loan. A secured credit card can often be called a guaranteed card. When you get a secured credit card, your collateral will be the amount of money you deposit. The lender isn’t at risk because the money is available. For some that simply don’t have credit and can’t get a traditional credit card, it’s a great way to rebuild your credit in Canada. 

How to recognize a secured credit card

The secured credit card functions just like a regular credit card. Once you’ve paid the agreed deposit amount, the card can be used for purchases in person or online. The balance will be due with a 21-day grace period and if the full amount isn’t paid, interest will be applied. 

Payments you make are reported to the credit bureaus, Transunion or Equifax, which is what helps to rebuild or build your credit rating. While anyone can take advantage of secured credit cards, it’s Canadians with low credit scores that will benefit the most from obtaining them. 

Building or rebuilding credit

Secured credit cards in Canada help to build payment and credit history. Every payment you make is reported to both credit bureaus, Equifax and TransUnion. By making payments on time and keeping your balance under 30% of available credit, you can start to see your credit score increase within just a few months. 

It’s important that you also pay your other bills on time and in full to really benefit and improve your credit. Once you’ve got a credit score of between 550 to 650, you may be approved for an unsecured credit card. An unsecured credit card is revolving credit and this is what you commonly get from Visa, Mastercard, or American Express.

Secured credit cards generally have an interest rate of 12% to 19.99%. There may be annual fees from $29 and up to $400 depending on the card and the benefits it provides. However, you’re going to see some zero annual fee options as well.

1. Refresh

Interest rate: 17.99%

Annual fee: $12.95

Monthly fee: $3


The Refresh Secured Credit Card offers an interest rate of 17.99% on purchases. There’s no credit check needed to get approved. There is a $3 monthly maintenance fee as well as an annual fee of $12.95. While you spend, you build credit and there’s a guaranteed approval when you deposit. The security deposit needs to be at least $200. 

You’ll be asked to provide personal information, provide government issues photo ID and banking details, and then choose the credit pack that suits your lifestyle best. Main benefits for you is that when you pay on time, your payment is reported to the credit bureaus. They offer helpful videos as well with financial advice to help their customers. Credit limit is anywhere from $200 – $10,000.

2. Neo

Neo secured credit card

Interest rate: 19.99% to 24.99%

Annual fee: None

Welcome Offer: $25 for signing up

The Neo Card and Rewards is a great way to build your credit up. There interest rates are between 19.99% to 24.99%. You won’t pay annual fees and in fact when you apply for a secured credit card, you get in on an exclusive offer of $25 for signing up. 

They also have a 5% instant partner cashback incentive that you can take advantage of right away. When you use your Neo Card while shopping at Neo partners, you can an average of 5% instant cash back. There is often a 15% cashback reward when you purchase for the first time at a participating store. 

Examples of participating stores include Earl’s Restaurants, Harry Rosen, and Well.ca. Neo guarantee at least 1% cash back every month even if your instant partner cash back is less than 1% across all your purchases. Their credit limit ranges from $2,500 to $10,000.

3. KOHO Mastercard® Prepaid card (formerly KOHO prepaid Visa)

koho visa

Monthly credit builder fee: $7

Welcome Offer: $20 for signing up

Cash back: 0.5% to 2%

KOHO offers a prepaid card where you can load funds and enjoy no-fee spending. While a prepaid card doesn’t technically help you build credit like a secured credit card does, KOHO educates you on how to use a credit limit responsibly while helping you earn cash back. If you register for credit building by KOHO, you pay a $7 monthly fee. The credit builder helps you to increase your credit score and improve your finances.  By signing up, you receive a $20 bonus plus you’ll be earning loyalty and rewards as you spend. A KOHO Mastercard® card offers 0.50% to 2% cash back on all your purchases. 

You get a prepaid card and an app that automates savings and helps with budgeting. There are no other fees, just $7 per month. There is no interest involved with the service provided as you’re prepaying money into your KOHO line of credit account. 

4. Plastk

Interest rate: 17.99%

Annual fee: $48

Monthly fee: $6

Cash back: 2,500 points = $10

Welcome Offer: 5,000 points ($20 value)

The Plastk Secured Visa Credit Rewards Card has some great perks including the lowest interest rate in the market at 17.99%. There’s an annual fee of $48 as well as a $6 monthly maintenance fee. However, the perks involved with this rewards card seems to make up for fees. 

When you first sign up, there’s a 25 day grace period with no interest. You get cash back as your points add up while spending. For every $1 you spend, you earn 250 points with no minimum purchase requirements. You can transfer your points through the app, which is available for iSO and Android. You can use your points for merchandise through big brands, hotel and travel, or give your points to available charities.

Right now, you get a 0% interest rate on purchases for the first 3 month for signing up to get a Plastk Secured Credit Card. Once approved, you get 5,000 points that you can redeem after 3 months ($20 value). You can get a credit limit from $400 to $10,000.

5. Home Trust

Interest rate: 14.50% to 19.99%

Annual fee: Optional $59

Authorized users: Yes

Not available in Quebec

The Home Trust Secured No Annual Fee Visa offers a no annual fee secured credit card with an interest rate of 19.99%. There’s an option to pay a $59 annual fee and get a lower interest rate of 14.90%. The minimum deposit required to get the Homestrust secured card is $500. You can add another authorized user as well. They offer high credit limits up to $10,000. The Home Trusted Secured Visa card was voted to be the Best Credit Card for Building Credit for 2021 and 2022. The Home Trust Secured Visa isn’t available to residents of Quebec.

6. ATB Alberta Secured Mastercard

Interest rate: 19.99% on purchases/22.99% cash advance

Annual fee: $49

Additional card fee: $25

Only available in Alberta

The ATB Alberta Secured Mastercard is exclusively for Alberta only. Annual fees are $49 per year plus $25 for additional cards, and has a 19.99% interest rate. If you miss payments, this increases to 24.90%. Interest is 22.99% on cash advances with a 26.90% interest rate if you default. The minimum deposit to get the ATB Secured Credit Card is $500. With the card, you can get up to 25% off on car rentals.

7. Capital One Secured Mastercard

Interest rate: 19.8%

Annual fee: $59

The Capital One Secured Mastercard comes with an annual fee of $59 with an interest rate of 19.8%. It’s one of the lowest minimum required deposit starting at $75 and up to $300. It’s a good choice for those who want a secured credit card but don’t have a huge amount of cash for a deposit. If you have $75, approval is guaranteed.

8. Vancity Enviro Secured Card

Interest rate: 19.5%

Insurance: Yes

My Visa Rewards Plus: Yes


Frequently asked questions about secure credit cards

The Vancity Enviro Secured Card is from the Vancity Credit Union, and it has great perks like insurance for travel, lost baggage, and price protection. There’s a rewards system as well, the My Visa Rewards Plus that includes purchase redemptions, travel, and charity donations. It comes with a 19.5% interest rate but has no annual fee involved. The minimum deposit to get this unsecured credit card is $500.

What is considered a low-interest rate for a credit card?

Most secured credit cards range from 19.99% to 23.99% APR. If you can find a card that’s less than this, it’s considered a low-interest rate. If you can manage to find a card that offers interest rates in the single digits, this is a great rate. As you build your credit, you’ll be more likely to be approved for these cards.

Why does a low interest rate matter for a secured credit card?

The lower the rate is, the easier you’ll have to pay off the monthly credit balance of cash advance. Your card issuer charges interest rates on outstanding balances as per your agreement when you received the card. The higher the interest rate, the more interest you’ll have to pay.

How long will it take to build credit with a secured credit card?

t will probably take about three months before your credit starts to gain momentum and show improvement. This is based on you making regular payments as you use your secured credit card. You also want to be diligent about paying other bills.

Do banks offer secured credit cards?

Yes, there are many Canadian banks that will offer secured credit cards. As you bank if they offer a secured credit card. Make sure to look through their terms and conditions as you might get better rates with other secured credit cards. The interest rate is important and you also want to be sure your secured credit card can transition to an unsecured card once your credit has improved.

How do secured credit cards help build credit?

When you get a secured credit card, the issuer is going to report your payment history and credit utilization to the credit bureaus. When you pay on time and keep a low balance, you can then improve your credit score.

When do you get the deposit back that is put down to get a secured credit card?

Secured credit cards require you to put down a deposit. You’ll be refunded when the account balance is paid and you close the account. You may also get your deposit back when your secured credit card is converted to an unsecured credit card.

How much can you increase your credit score by using a secured credit card?

The goal when you take on a secured credit card is to increase your credit score. The score will rise depending on your credit beforehand and overall financial well-being. If you use the card and always pay it on time, you can expect to see a 200 point increase over a 12 month period.

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