6 Best Secured Credit Cards in Canada for 2022

Secured credit cards are great for everyone looking to build or rebuild their credit and get back on track towards financial stability. They require you to put down a security deposit to secure the lender against missed bill payments.

So if you have a bad or not-so-flattering credit history, or no credit at all, and are ineligible for traditional credit cards in Canada. you should consider secured credit cards.

Credit card issuers view Canadians with low credit scores as risky borrowers. So, using a secured credit card gives you the advantage of using your deposit when you can’t pay your credit card bills.

Generally, secured credit cards act as stepping-stones to other credit products. They do not offer the best rewards programs or low-interest rates. But it is important that you apply for one of the best secured credit cards in Canada.  You need cards that can serve as game-changers to your creditworthiness.

This article discusses the 6 best secured credit cards in Canada, their key features, pros and cons, and their minimum security deposits.

Stick with us on this page as we discuss in-depth the best secured credit cards in Canada, including the Neo Secured Credit Card and the Plastk Secured Credit Card.

Overview of The Best Secured Credit Cards Canada

Best Secured Credit Cards in Canada

There are a variety of secured credits you can enjoy in Canada. The following are some of the very best secured credit cards for Canadians.

1. Neo Financial Secured Card

The Neo Financial Card is one of Canada’s best Secured credit cards, with a remarkably low minimum security deposit of $50. It is also easy to get approved when you apply for one.

With Neo Financial’s Secured Card, you get 1% cash back on the first $5,000 you spend monthly and an average of 15% cash back when making purchases from retail partners. You get bonus rewards when doing transactions with the following retail partners:

• Loblaws (1%)
• Canadian Tire (2%)
• SportCheck (3%)
• Dollarama (3%)
• Shoppers Drug Mart (1%)
• Walmart (1%)
• Amazon (2%)

It is also worth mentioning that you won’t get insurance coverage as with most secured credit cards.

Features

• Minimum security deposit: $50
• Annual fee: $0
• Purchase interest: 24.99%
• Income: $50
• Welcome Bonus: $25
• Rewards: Up to 15% cash back

Why we like Neo Financial Secured Card

• No annual fee
• Welcome bonus of $25
• You can earn up to 5% cash back when purchasing with select Neo partners.
• A shallow minimum deposit of $50 makes the card accessible to Canadians of all budgets.

Why we don’t like Neo Financial Secured Card

• The purchase interest rate goes as high as 24.99%
• Only reports to TransUnion

2. Plastk Secured Visa Reward Credit Cards

Plastk offers its cardholders a premium rewards program (which is a pretty big deal). When you make a purchase, you earn points that can be redeemed at later dates.

With Plastk, your payments are guaranteed to be reported to credit bureaus (which is important if you want your credit score to improve over time). Consequently, a sufficiently higher credit score will also make you eligible for unsecured credit cards.

Features

• Minimum security deposit: $300
• Annual fee: $120
• Purchase interest: 17.99%
• Income: $0
• Rewards: 2,500 points ($10)
• Welcome bonus: 5000 points ($20)

Why we like Plastk Secured Visa Reward Credit Cards

• You can earn rewards on purchases
• 50000 points for signup bonus (cash value of $20)
• 0% interest for the first three months
• Monthly credit score updates reported to Equifax
• 17.99% purchase interest rate

Why we don’t like Plastk Secured Visa Reward Credit Cards

• The interest rate can go up to 29.99% after two missed payments
• Hidden charges to watch out for
• Only reports to Equifax

3. Home Trust No-Fee Secured Visa Card

Home Trust’s No-Fee Secured Visa card can give you the privilege of minimum payments that can be conveniently managed. It also offers an impressive level of flexibility, making it very easy to acquire one.

On top of this, the fact that it is a Visa card makes it a great option, as it is accepted by many merchants worldwide for different transaction types.

It is worth mentioning that Home Trust’s No-fee Secured Visa Card minimum deposit is one of the highest among secure credit cards in Canada, so keep this in mind when making your choice.

Features

• Minimum security deposit: $500
• Annual fee: $0
• Purchase interest: 19.99%
• Income: $0

Why we like Home Trust No-Fee Secured Visa Card

• No annual fee
• Reports to both Equifax and Transunion
• Low foreign exchange fees of 2%

Why we don’t like Home Trust No-Fee Secured Visa Card

• An interest rate of 19.99%
• No rewards or cash back and no perks

4. Home Trust Secured Annual Fee Visa Card

The Home Trust Secured Annual Fee Visa Card is no different from the Home Trust secured card discussed above (except for an annual fee that has to be paid by the cardholder).

It also affords users flexibility and the ability to sign up (and get approved) with no hassle or stress. You’re in the clear as long as your security deposit is ready.

Features

• Minimum security deposit: $500
• Annual fee: $59
• Purchase interest: 14.90%
• Income: $0

Why we like Home Trust Secured Annual Fee Visa Card

• Low-interest rates
• Reports to both Equifax and TransUnion

Why we don’t like Home Trust Secured Annual Fee Visa Card

• No rewards on purchases and no cash backs
• You will need to budget for annual fees

5. Refresh Secured Card

The Refresh Secured Credit Card is definitely a great alternative for people who are trying to get their credit back on track. Eligibility is not a problem as long as the prospective cardholder is willing and able to pay the security deposit.

It is not much different from the regular credit card you are used to (with the exception of the necessity of a security deposit and fewer reward programs/benefits compared to unsecured cards).

Features

• Minimum security deposit: $200
• Purchase interest: 17.99%
• Income: $0
• Annual fee: $49

Why we like Refresh Secured Card

• A low purchase interest rate of 17.99%
• Low minimum deposit of $200
• An interest-free grace period of 21 days
• You enjoy free credit reports, financial educational courses, and weekly updates

Why we don’t like Refresh Secured Card

• It cannot be upgraded to an unsecured credit card
• Bogged down with extra fees ($5 for ATM withdrawals)

6. Capital One Guaranteed Secured Mastercard

The Capital One Guaranteed Secured Mastercard is one of the best secured credit cards in Canada that comes with a suite of benefits and premium perks.

The Capital One Guaranteed Secured Mastercard comes with an annual fee of $59 and an interest rate of 19.80%. It has a comparatively low minimum required deposit of $75 to $300.

It is an excellent option for Canadians who don’t have a huge amount of cash to deposit but want a secured credit card. Your approval is guaranteed if you have a minimum deposit of $75.

Features

• Annual fee: $59
• Purchase rate: 19.80%
• Minimum security deposit: $75 – $300
• Income: $0

Why we like Capital One Guaranteed Secured Mastercard

• A low minimum deposit of $75 is affordable to most Canadians
• Lots of insurance benefits, price protection, extended warranty, and travel benefits

Why we don’t like Capital One Guaranteed Secured Mastercard

• No rewards on purchases
• The maximum security funds deposit of $2,500 is low compared to what other credit cards offer

How We Reviewed the Best Secured Credit Cards in Canada

There are many secured credit cards in Canada today. Many do not offer exciting benefits or special perks that make them stand out.

While these benefits and perks might not be criteria for building credit, it is also nice to have features that help you save money and earn more while building your credit score.

We have selected these six best secured credit cards based on how they help you save money through low-interest fees, APRs, and deposit requirements and how they offer you rewards.

How Does Secured Credit Card Work in Canada?

A secured credit card is an excellent tool for building your credit history or rebuilding your credit after a bad setback.

A secured credit card requires a cash security deposit to use. The cash deposit becomes your credit card’s limit.

Some secured credit card providers require a higher cash deposit for a lower credit limit.

Secured credit cards perform the same functions as regular, unsecured credit cards. Once approved and you have provided the required cash security deposit, you can use the secured credit card for online and in-person purchases.

You have to pay your balance and make the minimum monthly payment. Your credit will rise when you make your payments on time and use your card responsibly.

The secured credit card providers usually report your payment to Canada’s credit bureaus (Equifax and TransUnion). Not all issuers will report your payments. If you want to boost your credit score, ensure you apply for secured credit cards with an issuer that will report your payments.

Unsecured vs. Secured Credit Cards

Unsecured credit card credit limits give access to money borrowed to be paid back at later dates. As for secured credit cards, the credit limit is determined by the security deposit provided by the card holder.

More benefits and rewards come with unsecured credit cards. Secured credit cards don’t have as many perks as unsecured credit cards. At the end of the day, your credit situation and your financial circumstances should determine which one of them you go for.

But if you have a bad credit history, we recommend secured credit cards because issuers are generally reluctant to offer bad credit individuals an unsecured credit card.

For more information on credit, you can check out our article on Canada’s best credit cards.

Benefits and Downsides of Secured Credit Cards in Canada

Pros

• You get an opportunity to build credit and better your credit score.
• The security deposit is what determines the cardholder’s credit limit. This often helps to limit overspending.
• It is easy to get (whether you have good credit or not).
• Some cards provide rewards and cash backs.

Cons

• Security deposits may be as high as $500 at a minimum.
• Some cards charge monthly/annual fees
• High-interest rates and fees
• Security deposits cannot be gotten until the account is close
• The terms and conditions are often very stern. For example, some secure credit cards will shut down your account if you pass the credit limit more than once.

What to Consider When Choosing a Secured Credit Card

Endeavor to factor in the following when making a decision on which secured credit cards in Canada you want to choose:

• Reporting to Credit Bureaus: Issuers often report payments to the credit bureaus of Canada. However, checking if they report payments is important because not all issuers bother to. If they don’t report payments, their inaction could affect your credit score and the score’s improvement.
• Affordable Deposit: Your budget (how much you can afford to spend) could be a big factor. Don’t forget that you can’t access the security deposit until the account is closed. So, don’t deposit money you can’t afford to as your credit limit determinant.
• Low (or No Fees): We recommend that you do your research on fees before taking the final step of picking a secured credit card for yourself. Certain cards charge annual fees, while some charge monthly fees. It all depends on what suits you and your situation.
• Upgrade Potential: Some secured credit card issuers also provide unsecured credit card alternatives. If you feel the need to upgrade to a different credit card after your credit score has been boosted, these issuers will let you make the upgrade. This saves you the hassle of switching issuers.

You can read our article for more on how to navigate credit card debt.

How to Make the Most of Secured Credit Cards in Canada

The ultimate goal of getting and using a secured credit card is to help you build or rebuild your credit.

With a low credit score, lenders see you as a risk, and qualifying for even simple things like credit cards can be extremely difficult.

However, you can apply for secured credit cards in Canada and put down an upfront security deposit that equals or exceeds your credit card limit.

If you use your secured credit card responsibly and pay the minimum payment on time, you can rebuild your credit, as lenders will see that you are responsibly using your credit.

If you want to build credit with a secured credit card, you should pay your monthly bill on time, avoid interest by paying the balance in full, keep your balance very low, and have a low credit utilization ratio.

Also, try to use your secured credit card actively. By doing all these, you stand a chance of getting approved for an unsecured credit card in the future.

Final Thoughts on Best Secured Credit Cards in Canada

A secured credit card is supported by deposits of cash made by a cardholder. The concept of the card is to lower the risk of borrowers with bad credit not paying the issuer. With these cards, borrowers with unfavorable credit histories can boost their credit.

These cards mostly come with relatively higher amounts of interest and fees (compared to unsecured credit cards). But the upside is that it is one of the best ways to revive your credit when it is at its lowest. So, these cards are highly recommended if you have a security deposit to spare.