Best secured credit cards of May 2024

Rewards cards with cash-back bonuses and flashy perks are great — if you have good credit. But if you're one of the millions of Americans with no credit or less than stellar credit, you might not qualify and need to opt for a secured credit card instead.

Secured credit cards are designed for anyone trying to build or rebuild their credit. A secured card is nearly identical to an unsecured card: You have a credit limit, incur interest and, in some cases, earn rewards.

The biggest difference is you must make an upfront deposit to receive a line of credit. The deposit is collateral if you default on payments, but it's completely refundable if you pay off your balance and close your account or upgrade to an unsecured credit card. Deposits typically start at $200 and increase from there. If you want a higher credit limit, you'll need a bigger deposit.

To help you find the right secured credit card, CNBC Select analyzed 24 cards marketed to consumers with no or low credit. We considered several factors, including security deposit minimums, fees, rewards programs and APR. (See our methodology for more information on how we choose the best cards.)

Who's this for: The Discover it® Secured Credit Card is a well-rounded secured card that offers many benefits typically found with unsecured cards. Cardholders can earn cash back, receive a generous welcome bonus, use the card overseas without incurring added fees and more — all for no annual fee.

Standout benefits: Cardholders earn a competitive 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%. Plus, you can earn unlimited 1% cash back on all other purchases automatically. The welcome bonus is also unique: For new card members in the first year only, Discover will automatically match all the cash back you've earned at the end of your first year. So, if you earn $50 cash back at the end of the first year, Discover will give you an additional $50.

Minimum deposit: This card requires a minimum $200 security deposit, which is fairly standard for secured credit cards. It stands out from the crowd because it gives users a clear path to upgrading to an unsecured card (and getting their deposit back). At seven months from account opening, Discover will automatically review your credit card account to see if they can transition you to an unsecured line of credit and return your deposit. This takes the guesswork out of wondering when you'll qualify for an unsecured credit card.

Who's this for? If you're looking for a secured card with a low deposit, the Capital One Platinum Secured Credit Card is your best option. This card has no annual fee (see rates and fees) and minimum security deposits of starting as low as $49, $99 or $200, based on your creditworthiness.

Standout benefits: Capital One also grants cardholders access to a higher credit limit after making the first five monthly payments on time — a good incentive to maintain a timely payment history (which is essential when you're trying to raise your credit score). In addition to paying on time, make sure you pay in full since this card has a very high 29.99% variable APR. (See rates and fees)

Minimum deposit: If you qualify for the low $49 or $99 deposits, you'll still receive a $200 credit limit. This is a great feature considering many secured cards require $200 deposits to receive an equivalent line of credit.

Who's this for? If you want (and can afford) a secured card with a high credit limit, consider the Platinum Secured Mastercard® from First Tech Federal Credit Union. This card has no annual fee and offers credit limits as high as $25,000, but you'll need to make a deposit equivalent to the line of credit you want.

Standout benefits: Cardholders earn 1 point per $1 spent on all purchases made with the Platinum Secured Mastercard®. This is a nice perk since secured cards often lack rewards programs. You can redeem your points for merchandise, travel and charity, according to the First Tech Federal Credit Union.

This card also comes with many added benefits: travel assistance services, travel accident insurance, baggage delay insurance, trip cancellation and trip interruption coverage, roadside assistance, auto rental collision damage waiver and purchase protection.

Minimum deposit: The minimum deposit to open this card is $500, which is on the higher side. Also, First Tech is a credit union, so you need to be a member to open this card. Anyone can join through affiliation with select organizations or employers; a relationship with a current member; work for the state of Oregon; live or work in Lane County, Oregon; attend Cogswell Poly Technical College; or join the Community History Museum (CHM) or Financial Fitness Association (FFA).

Who's this for? If you're looking for a basic secured card with one of the lower APRs, the Citi® Secured Mastercard® is your best option from a major bank. There is a 26.99% variable APR, which is quite high, but still lower than some of the other cards on this list.

Standout benefits: This card doesn't offer rewards, but that can be good if you're building credit since you won't be tempted to overspend. Cardholders can also benefit from Citi Entertainment access, which provides early access to presales and premium seating for various entertainment events, such as concerts and sporting events. Be aware purchases made outside the U.S. incur a 3% fee, so this isn't the best option for traveling overseas.

Minimum deposit: There is a typical $200 minimum security deposit and no annual fee.

Who's this for? The DCU Visa® Platinum Secured Credit Card offers one of the lowest interest rates for a no-annual-fee secured card at 16.00% variable.

Standout benefits: While we don't recommend carrying a balance month-to-month (especially when you're trying to build or rebuild credit), it can be a good idea to choose a low-interest secured card if you have a history of carrying balances or you're looking for a safety net. It also comes with some additional perks, including travel insurance, identity theft protection and extended warranty protection.

Minimum deposit: There is a higher-than-average $500 minimum security deposit to open the card. Membership to the Digital Federal Credit Union is required, but anyone can join in one of several ways: if you're a family member of a DCU member, live in select communities, work for select employers or make a one-time contribution (as low as $10) to a participating organization.

Who's this for? If you want to build credit while earning cash back, consider the U.S. Bank Cash+® Visa® Secured Card.

Standout benefits: Your purchases with the card will earn:

• 5% cash back on your first $2,000 in combined eligible purchases each quarter in two categories you choose. Some categories include: TV, internet and streaming, home utilities, cell phone providers, fast food restaurants and movie theatres.
• 2% cash back on eligible purchases in your choice of one everyday category (like gas stations, grocery stores and restaurants)
• 1% cash back on all other eligible purchases

The cash back you earn can be redeemed in one of three ways: a statement credit to your account, direct deposit to your U.S. Bank checking, savings or money market account, or a U.S. Bank rewards card (similar to a Visa gift card).

Minimum deposit: New cardholders must put down a deposit of between $300 and $5,000 which acts as your credit line. If you spend within your credit limit and pay your bill when it's due, U.S. Bank could eventually upgrade you to the U.S. Bank Cash+® Visa Signature® Card. But unlike some other cards on this list, there's no clear timeline. Once you're upgraded, your security deposit will be returned.

Who's this for? If you're a frequent traveler, you might want to consider a secured card that offers travel-centric perks and no fees on purchases made outside the U.S., like the State Department Federal Credit Union (SDFCU) Savings Secured Visa Platinum Card.

Standout benefits: Cardholders can benefit from earning 1 Flexpoint per dollar spent on all purchases. This is a nice perk considering secured cards rarely have rewards programs. You can redeem rewards in a variety of ways: travel, event tickets, merchandise, gift cards and charity donations.

This card also comes with roadside dispatch and it has no annual fee.

Minimum deposit: You'll need to come up with at least a $250 security deposit to open this card. Since it's issued by a credit union, membership is required. Anyone can qualify in one of four ways: through the Department of State, an affiliation with select organizations, a relationship with a current member or by joining the American Consumer Council (ACC). Unlike some other credit unions on this list, there's no cost to join the ACC.

If your credit score isn't high enough to qualify for the best mortgage rates or the biggest credit card welcome offers, a secured credit card can be a great tool for getting your credit back on track.

Secured credit cards are easier to qualify for but require an upfront deposit. Secured cards also don't earn the same level of rewards as traditional cards and can have higher interest rates. For these reasons, a secured card usually isn't the best long-term solution to your credit card needs but, it's a useful tool for establishing a relationship with a bank and for managing your credit history.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every secured credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best secured credit cards.

To determine which secured cards offer the best value for a range of consumers, CNBC Select analyzed the 22 most popular secured credit cards offered by the biggest banks, financial companies and credit unions that allow anyone to join.

We compared each card on a range of features, including: annual fee, minimum security deposit, credit limit, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also took into account how easy it is to upgrade the card from secured to unsecured and how quickly you can get your security deposit back.

Because it's unusual for secured credit cards to have robust rewards programs, we did not analyze how many reward points you can earn in the first year. For cardholders who are looking to rebuild credit, it's more important to practice good credit card habits — spending within your means, paying your balance on time and in full — than trying to optimize your points balance.

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For rates and fees of the Discover it® Secured Credit Card, click here.