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Best Secured Credit Cards in Canada

Best secured credit cards in Canada 2024

Tyler Wade
Author: Cory Santos

By Tyler Wade & Cory Santos

Fact Checked: Amy Tokic

🗓️

Updated: November 21, 2024

Partners on this page provide us earnings.

Secured cards help you establish a strong payment history and help you advance to more lucrative cards down the line.

Secured credit cards can be a major boon for people trying to establish a credit history or repair a bad credit score. Used responsibly, they’re an ideal way to hone good credit card habits, curb mindless spending and develop an appreciation for managing your personal finances.

We've compiled a list of the best secured credit cards available in Canada to guide you on your journey to financial independence. Plus, we'll help you assess crucial factors like interest rates, security deposits and additional advantages. Discover the card that aligns perfectly with your journey towards a stronger credit future and learn everything you need to know to make an informed decision. And don't forget to check out our Best Credit Cards Canada list when you're done.so you'll know what your next step might be once your credit health improves.

  • Why you can trust Money.ca's best secured credit cards in Canada list

    +

    Money.ca rates all credit cards on a numeric scale of 1 to 5 stars, with 1 being the lowest and 5 the highest rating, respectively. Money.ca’s proprietary scoring formulas break down the confusing language, complex points, rewards and earn rates to give you the real data that caters to your needs first, not ours.

    Our partnerships have no impact on our ratings, which are solely determined by the merits of each card. To learn more about how we researched and ranked these cards, read our full credit card review methodology.

Best overall

Best secured credit card in Canada

Neo Secured Mastercard

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2.7

Poor

Suggested credit score

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Pros

  • Low minimum security deposit

  • Cash back rewards on purchases

  • No hard credit check

Cons

  • High APR range

  • $5 monthly fee

  • Best cash back offer requires high balance

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • Low minimum security deposit

  • Cash back rewards on purchases

  • No hard credit check

Cons

  • High APR range

  • $5 monthly fee

  • Best cash back offer requires high balance

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Earn up to 4% on gas and groceries

Up to 4%

Earn up to 1% on everything else

up to 1%

Earn up to $680 in annual cashback

$680

Variable APR

19.99% - 29.99%

Cash Advance APR

22.99% - 31.99%

Annual Fee

$59

The Neo Secured Mastercard is a great option for those looking to establish a credit history for the first time.  The card features a low minimum security deposit requirement, no credit check needed when applying and earns cash back rewards on select purchases, though just how much you'll earn depends on your Neo deposit account balance (not your credit card statement balance, don't worry):

  • Earn up to 4% on gas and groceries when you have $10,000 in your account.
  • Earn 3% cash back on gas and groceries when you have at least $5,000 in your account
  • Earn 2% on gas and groceries when you have no money in your account.
  • Earn up to 1% on everything else when you have $10,000 in your account.
  • Earn 0.5% cash back on everything else when you have $3,000 in your account.

It's worth noting that cash back is capped after $6,000 per year on groceries, $10,000 per year on gas and $30,000 per year on everything else.

Disclosures

Neo Credit and Neo Secured Credit cards are issued by Neo Financial™ pursuant to license by Mastercard International Incorporated.

Best travel

Best for travel

Home Trust Secured Visa*

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2.3

Good

Suggested credit score

No annual fee

Apply now

Pros

  • Reports to credit bureaus every month, helping to quickly build your credit rating.

  • Requires a $500 minimum deposit, with the credit limit scaling on a 1:1 basis all the way up to $10,000.

  • High approval rate

  • Monthly credit reporting to major credit agencies every month, expediting the credit repair or improvement process

  • Low foreign transaction fee

  • Cardholders get a 21-day no-interest grace period

  • Low monthly minimum payment options; pay either the greater of $10 or 3% of the monthly balance.

Cons

  • Standard interest rate although, if you opt for the annual fee version of the card, it comes down

  • No rewards or perks

  • Charges a monthly inactivity fee of $12 if the card is not used for a period of 12 months.

  • Despite a high approval rate, there are still chances of being denied based on deal-breaking factors

  • No welcome bonus offer as it is designed for credit building

Eligibility

Recommended Credit Score

Good

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • Reports to credit bureaus every month, helping to quickly build your credit rating.

  • Requires a $500 minimum deposit, with the credit limit scaling on a 1:1 basis all the way up to $10,000.

  • High approval rate

  • Monthly credit reporting to major credit agencies every month, expediting the credit repair or improvement process

  • Low foreign transaction fee

  • Cardholders get a 21-day no-interest grace period

  • Low monthly minimum payment options; pay either the greater of $10 or 3% of the monthly balance.

Cons

  • Standard interest rate although, if you opt for the annual fee version of the card, it comes down

  • No rewards or perks

  • Charges a monthly inactivity fee of $12 if the card is not used for a period of 12 months.

  • Despite a high approval rate, there are still chances of being denied based on deal-breaking factors

  • No welcome bonus offer as it is designed for credit building

Eligibility

Recommended Credit Score

Good

Required Annual Personal Income

$0

Required Annual Household Income

$0

Purchase APR

19.99%

Balance Transfer Rate

19.99%

Cash Advance APR

19.99%

Annual Fee

$0

Foreign Transaction Fee

2.5%

No annual fee is enough of a reason to love the Home Trust Secured Visa but there's plenty of other great features to love about this card. For starters, the card reports to credit bureaus every month, helping to quickly build your credit rating. Next it requires a reasonable $500 minimum deposit, with the credit limit scaling on a 1:1 basis all the way up to $10,000.

We like the Home Trust card because of its low foreign transaction fee of 2.5%. That's not exceptional but it's significantly lower than the 3% you'll find with many secured cards. Heck, some secured cards aren't useable outside of the country. Finally, we love the low monthly minimum payment options with the card, where you can pay either the greater of $10 or 3% of the monthly balance.

Best sure thing

Best guaranteed approval

Capital One Guaranteed Secured Mastercard®

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2.6

Poor

Suggested credit score

to receive the latest news, tips and offers by email

Apply now

Pros

  • Guaranteed approval for those with weak credit

  • Helps build or repair credit history with responsible use

  • Low annual fee

  • Purchase and travel benefits for available for those who qualify for the unsecured card version

Cons

  • High interest rate

  • Limited extra features for secured cards

  • Security funds are required for the secured version

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Pros

  • Guaranteed approval for those with weak credit

  • Helps build or repair credit history with responsible use

  • Low annual fee

  • Purchase and travel benefits for available for those who qualify for the unsecured card version

Cons

  • High interest rate

  • Limited extra features for secured cards

  • Security funds are required for the secured version

Eligibility

Recommended Credit Score

Poor

Required Annual Personal Income

$0

Required Annual Household Income

$0

Purchase APR

21.9%

Balance Transfer Rate

21.9%

Cash Advance APR

21.9%

Annual Fee

$59

The Capital One Guaranteed Secured Mastercard is a great secured card option because, well, it's a sure thing. Simply meet the eligibility requirements, make the security deposit and you're all set! Even better, that security deposit is exceptionally low -you'll need just $75.

Best rewards

Best for rewards

Secured Tims® Mastercard

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4.0

$20 Tims gift card

Welcome offer

Good

Suggested credit score

Eligible new cardholders can receive a $20 Tims Gift Card from October 16, 2024 to November 30, 2024.

Apply now

Pros

  • No annual fee: There’s no fee for using the card. Many secured credit cards feature an annual fee of $20 or higher

  • Build credit: Build credit with on-time payments and low credit use

  • No credit check: There is no hard inquiry when applying for the card

Cons

  • Low base earn rate: 0.25x points per $1 spent is a very low base rate

  • Limited insurance: The card provides only basic insurance protections

Eligibility

Recommended Credit Score

Good

Pros

  • No annual fee: There’s no fee for using the card. Many secured credit cards feature an annual fee of $20 or higher

  • Build credit: Build credit with on-time payments and low credit use

  • No credit check: There is no hard inquiry when applying for the card

Cons

  • Low base earn rate: 0.25x points per $1 spent is a very low base rate

  • Limited insurance: The card provides only basic insurance protections

Eligibility

Recommended Credit Score

Good

Variable APR

20.99% - 26.99%

Cash Advance APR

22.99% - 27.99%

Annual Fee

$0

The Tims Secured Mastercard is another secured card option from Neo Financial. The card requires a very reasonable $50 security deposit but requires no annual fee. Even better, it's the only card on our list that offers a welcome bonus for new accounts: a $20 Tims gift card!

The Tims Secured Card also earns solid rewards on purchases:

  • Earn 12 points per $1 at Tim Hortons restaurants when you scan for Tims Rewards
  • Earn 2 points per $1 spent on groceries, gas, and transit
  • Earn 1 point per $4 spent on all other purchases

Disclosures

Conditions Apply

The Tims® Mastercard is issued by Neo Financial™ pursuant to license by Mastercard International Incorporated.

What is a secured card?

What is a secured credit card?

Secured credit cards are an excellent choice for anyone with no credit history or those looking to rebuild their credit after facing financial difficulties like bankruptcy or foreclosure. While they function similarly to regular credit cards, there is one key difference - the requirement of a security deposit.

When applying for a secured credit card, you must provide a cash deposit that serves as collateral for your credit limit. This deposit reduces the risk for the card issuer, as it can be used to cover any unpaid balances in the event of default on credit card payments. The amount of your security deposit typically determines your credit limit. For instance, if you deposit $500, your credit limit will also be $500.

It's important to note that the deposit is refundable as long as you maintain a good payment history and eventually close the account. Secured credit cards offer individuals an opportunity to establish or rebuild their credit while providing the convenience and benefits of a regular credit card.

How to choose

13 factors to consider when choosing a secured credit card in Canada

  • Deposit requirement: Look for a card with a deposit that fits your budget. Some cards require as little as $50, while others may ask for several hundred dollars. The deposit will typically be your max credit limit.
  • Interest rates: Compare the interest rates for purchases and cash advances. Lower rates are preferable, especially if you might carry a balance.
  • Annual fees: Some secured cards charge annual fees. Decide if a fee is worth it for you, considering any additional benefits the card may offer (lower interest rate, rewards, etc).
  • Credit bureau reporting: Ensure the card reports to major credit bureaus in Canada, like Equifax and TransUnion—crucial for building your credit history. If the card only reports to one, it may affect your overall credit building because some lenders will look at one bureau and not the other. 
  • Additional benefits: Look for cards offering perks like cash back, insurance coverage, or low foreign transaction fees. These extras can add value to your card. Ask yourself what will benefit you the most. 
  • Eligibility requirements: Check if there are specific eligibility criteria, such as income requirements, citizenship, or restrictions related to bankruptcy history.
  • Brand recognition: Opt for cards from recognized brands like VISA, Mastercard, or American Express for wider acceptance and reliability.
  • Minimum and maximum security deposit requirements: Understand the minimum and maximum limits for the security deposit. This flexibility should align with your credit building goals. 
  • Graduation path to an unsecured card: Ask if the card offers a transition to an unsecured card with responsible usage. It’s a significant milestone in credit building. 
  • Foreign transaction (FX) fees: Worth considering if you plan to use the card abroad or for international purchases.
  • Application process: Some cards may offer instant approval, while others might take longer. Don’t apply to multiple cards at the same time as this could hurt your chances of acceptance (and your credit score). 
  • User reviews: Check user reviews, especially on platforms like Reddit, to gauge real-world experiences.
  • Opportunities to increase your credit limit: Find out if there are options to increase your credit limit over time, which is helpful for your credit utilization ratio and ultimately your credit score. 
How to apply

How to apply for a secured credit card in 8 steps

Applying for a secured credit card in Canada typically involves the following steps:

  1. 1.

    Research and compare: Start by researching different secured credit cards. We’ve listed the best ones above, many banks don’t currently offer secured cards (see more below). Compare their features, fees, interest rates and benefits. Use online resources, user reviews and sites such as money.ca to gather information.

  2. 2.

    Check eligibility: Ensure you meet the eligibility criteria for the card you're interested in. This usually includes being the age of majority in your province, having a Canadian address and sometimes specific income or employment requirements.

  3. 3.

    Gather necessary documents: You’ll need proof of identity (like a driver's license or passport), proof of address (like a utility bill) and financial information (like bank statements or pay stubs).

  4. 4.

    Fill out the application: Apply online (just click on the apply buttons above), or by phone, or in-person at a bank branch, depending on the issuer's process. Fill in all required information accurately to avoid delays.

  5. 5.

    Submit deposit: If approved, you'll need to provide the security deposit, which sets your credit limit. This can usually be done via a bank transfer or a cheque.

  6. 6.

    Wait for approval: After submitting your application and deposit, there will be a processing period. The time frame varies by issuer but is generally quick.

  7. 7.

    Activate your card: Once you’re approved and you receive your card by mail, follow the issuer’s instructions to activate it. This might involve calling a number or activating it online.

  8. 8.

    Start using the card: Begin using your card for purchases and make sure to pay your bills on time to start building your credit. You can use it for monthly subscriptions like streaming services and online purchases, too. 

Remember, each credit card issuer may have slightly different processes and requirements, so it's important to read the specific instructions provided by the issuer of the card you choose.

How to use

12 tips when using a secured credit card in Canada

  • Pay on time: Always pay your credit card bill on time. Late payments can negatively impact your credit score (yes, even if it is your money).
  • Keep your balance low: Maintain a low balance relative to your credit limit. Aim for a credit utilization ratio under 30% to positively affect your credit score. For example, if your limit is $1,000, try not to carry more than $300 (30%). 
  • Pay in full when possible: Try to pay off your entire balance each month to avoid interest charges and reduce the risk of debt accumulation.
  • Use the card regularly: Regular activity is important. Use the card for small, manageable purchases to ensure that the card issuer reports positive activity to the credit bureaus. We recommend subscription services like Netflix, Amazon, Spotify, or anything that charges a small amount that’s easy to pay off. 
  • Monitor your credit score: Regularly check your credit score to track your progress and understand the impact of your credit habits. You can do this for free with Equifax and TransUnion, or even your bank. 
  • Budget wisely: Plan your expenses and stick to a budget to avoid overspending with your secured card.
  • Avoid additional cards: Stick to one secured card while you're building credit. Managing multiple cards (or other users of your cards) can be challenging and may lead to high debt levels.
  • Understand terms and fees: Be fully aware of all the terms, fees and interest rates associated with your card to avoid costly mistakes.
  • Graduate to an unsecured card: After 12 months of responsible use, explore options to upgrade to an unsecured card—a positive step in your credit building journey.
  • Don’t close the card prematurely: If there are no fees for inactivity, keep your secured card open even after you get an unsecured card because closing it can shorten your credit history and potentially lower your credit score.
  • Avoid cash advances: Steer clear of cash advances due to their high fees and interest rates. They can quickly lead to expensive debt.
  • Seek financial advice if needed: If you're unsure about managing credit or debt, don't hesitate to consult with a financial advisor for personalized guidance.

By following these tips, you can use your secured credit card as an effective tool to build a strong credit history and lay the foundation for a healthy financial future.

How to build credit

How to build credit with a secured credit card

A secured credit card can help you start building a credit history (if you don’t have one) or improve your credit score (if you have bad credit). Unlike a prepaid card, the activity on your secured credit card will be included in your credit report. A prepaid card doesn’t extend credit, so your account activity won’t be reported to credit bureaus—and therefore won’t help you build a credit history.

Ideally, your card should report to both major credit bureaus in Canada, including Equifax and TransUnion. Some cards may only report to one, or to neither, which won’t help you build your credit—so keep that in mind when researching your options.

But it’s a double-edged sword: If you miss payments, that will also be reported to the credit bureaus. And, since secured credit cards tend to come with lower limits, it’s easier to increase your credit utilization, which in turn could be bad for your credit score.

The key to building better credit is simple: Use your card responsibly. Pay your bills on time, try to pay off your balance in full or, at the very least, carry as low a balance as possible. If you’re able to maintain a positive payment history, your lender may increase your limit over time or offer to upgrade you to an unsecured card—and, in the process, give you your deposit back.

How to upgrade

How to move from a secured card to an unsecured credit card

In general, you can start thinking about moving from a secured to an unsecured card once you’ve been using your card responsibly (i.e. making all the monthly payments on time and maintaining a credit utilization of 30% or below) for 12 to 18 months.

If your bank offers an upgrade path

If your secured card offers a pathway to an unsecured credit card, you should expect to automatically switch over once you meet the minimum requirements as spelled out in your cardmember agreement. Typically, these requirements include keeping your balance low and making your payments on time for a set period, usually around 9 to 18 months. 

Contact your card provider if you aren’t sure if your current secured credit card offers an upgrade path, or if you haven’t heard from them regarding upgrading to an unsecured card. You can find the contact number on your credit card statements or by logging in to your online account.

If your bank doesn't offer an upgrade path

If you can’t upgrade your secured card, don’t worry. You can still upgrade from your secured card to a new unsecured offer, although you will need to close the account and open a new one, which will impact your credit score in the short-term.

  1. 1.

    Contact your card issuer: The easiest way to transition to an unsecured card is to contact your current secured card provider to see if they offer unsecured cards. If they don’t, you can cancel your card.

  2. 2.

    Get your deposit refunded: If you cancel your secured card the bank will refund your deposit. It could take up to three months because the issuer wants to make sure there are no outstanding charges.

  3. 3.

    Find a new card: If you want to go with a different provider, look around to find the best credit card for your needs. If you’re new to unsecured cards, try to stay with no fees and few bells and whistles because those cards tend to be the easiest to get approved for.

  4. 4.

    Apply: Remember that applying for a credit card will likely result in a credit check, which may impact your credit score. The key is to apply wisely and be aware of requirements like minimum income and credit score, so you don’t apply needlessly.

Summary

Summary: 3 best secured credit cards in Canada

Features Secured Neo Mastercard Home Trust Secured Visa Card Capital One Guaranteed Secured Mastercard
Annual fee $5/month $0 $59
Interest rate 19.99%-29.99% (For Quebec 19.99%-24.99%) 19.99% 21.9%
Minimum deposit $59 $500 $75
Pros Cashback rewards
Low minimum deposit
Reports to credit bureau (TransUnion)
Graduation path
No annual fee option
Reports to credit bureaus
Visa benefits
Graduation path
Guaranteed approval
Reports to credit bureaus
MasterCard benefits
Security deposit refund
Cons Annual fee
Limited acceptance
High interest rate
Limited benefits
Monthly inactivity fee
Annual fee
Limited credit limit increase
No rewards
Eligibility criteria Canadian resident
Age of majority
Not in bankruptcy
Canadian resident
Age of majority
Not in bankruptcy
Canadian resident
Age of majority
Not in bankruptcy
Upgrade path Yes Yes Not specified, but Capital One offers 5 other credit cards
Read review Secured Neo Mastercard review Home Trust Secured Visa Card review Capital One Guaranteed Secured Mastercard review
Apply Get started Get started Get started
FAQs

Secured credit card FAQs

  • Who should use a secured credit card?

    +

    Secured credit cards are ideal for individuals with no credit history or those looking to rebuild credit after financial setbacks like bankruptcy or late payments.

  • Do secured credit cards build credit?

    +

    Yes, secured credit cards can build credit. Responsible use, including timely payments, is reported to credit bureaus, positively impacting your credit score.

  • Is it possible for secured credit card applications to be declined?

    +

    Yes, applications for secured credit cards can be declined. Reasons include extremely low credit scores, unresolved bankruptcies, or insufficient income for the minimum deposit.

  • How much is a security deposit on a secured credit card?

    +

    Security deposits for secured credit cards vary, typically ranging from $50 to several hundred dollars, depending on the card issuer and the desired credit limit.

  • How do I increase my limit on a secured credit card?

    +

    To increase your limit on a secured credit card, you can usually add to the deposit amount, or the issuer may offer an increase after a period of responsible card use.

  • How fast will a secured credit card build my credit?

    +

    A secured credit card can start improving your credit within a few months, but significant credit building typically requires consistent, responsible use over a longer period, like a year or more.

  • What is the smartest way to use a secured credit card?

    +

    The smartest way to use a secured credit card is to make small, manageable purchases, pay your bill in full and on time each month, and keep your credit utilization low.

  • What not to do with a secured credit card?

    +

    Avoid late payments, maxing out your credit limit and using the card for cash advances. These practices can lead to high fees, interest and negatively impact your credit score.

  • Should I max out my secured credit card?

    +

    No, you should not max out your secured credit card. High credit utilization can hurt your credit score. Aim to use less than 30% of your available credit limit.

  • What happened to the Plastik secured credit card?

    +

    All Plastik Visa cards were cancelled on August 31, 2023. After this date, their usage was disabled. For information on account history, making payments, or returning security deposits, customers needed to contact Plastk directly.

  • What is the best TD secured credit card?

    +

    TD currently doesn't list secured credit cards on their website, but inquiring at your local branch could reveal options. Branches might offer standard unsecured TD cards as secured versions, potentially providing you with excellent choices for your credit needs.

  • What is the best RBC secured credit card?

    +

    RBC doesn’t currently offer a secured credit card, but you don’t need a credit card from the same people you bank with.That said, there is the RBC® Visa‡ Classic Low Rate option for $20 per year (waived in the first year), which offers a 12.99% interest rate with no minimum income requirement, but you’ll need a credit score above 600.

  • What’s the best CIBC secured credit card?

    +

    CIBC does not currently offer a secured credit card.

  • What’s the best BMO secured credit card?

    +

    BMO does not have a secured credit card in Canada.

  • What’s the best Scotiabank secured credit card?

    +

    Scotiabank doesn't offer a secured credit card.

  • What’s the best Tangerine secured credit card?

    +

    Tangerine doesn't have a secured credit card.

Tyler Wade Content strategist & writer

Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.

Cory Santos Finance editor

Cory Santos is a finance writer, editor and credit card expert with nearly a decade of experience in personal finance. Cory joined Wise Publishing from BestCards, with bylines in numerous print and digital publications across North America, including the Miami Herald, St. Louis Post-Dispatch, Debt.ca, AOL, MSN and Medium as well as financial podcasts like KOFE Talk.

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