5 Best Secured Credit Cards in Canada for 2022

Are you are asking “what are the best Secured credit cards in Canada?” then you have come to the right place to find answers.

If you have bad credit or not-so-flattering credit history, then no lender may want to approve you for a regular credit card.

If that is your reality, and you are ineligible for most credit cards out there, then a secured credit card may be the solution.

A secured credit card can be very useful when building your credit history or getting back on your feet after a bad credit experience. If utilized well, it could be a game-changer in your creditworthiness history.

A secured credit card is not so much different from regular credit cards, and they mostly offer perks similar to those of unsecured credit cards.

The only major difference between a secured credit card and an unsecured card is that you have to provide a security deposit (that will be your card’s limit) to open an account.

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

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 the best Secured credit cards in Canada 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% cashback on the first $5,000 you spend monthly and an average of 5% cashback 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, as with most secured credit cards, you won’t get insurance coverage.

Features

• Minimum security deposit: $50
• Annual fee: $0
• Purchase interest: 24.99%
• Income: $50

2. Plastk Secured Visa Reward Credit Cards

Plastk offers its cardholders a rewards program that is premium (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 make you eligible for unsecured credit cards, too.

Features

• Minimum security deposit: $300
• Annual fee: $120
• Purchase interest: 17.99%
• Income: $0

3. Home Trust Secured Visa Card

Home Trust’s Secured Visa card can give you the privilege of minimum payments that can be conveniently managed. It also offers an impressive level of flexibility and it is 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 around the world for different transaction types.

It is worth mentioning that Home Trust’s secured card’s 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

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 (with the exception of 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. As long as your security deposit is ready, you’re in the clear.

Features

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

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

What is a Secured Credit Card and How Does It Work?

A secured credit card is a special type of credit card only with the major distinction being you have to provide a security deposit that is equal to (or less than) your card’s limit to open an account.

Having a secured credit card means you can make use of the deposit in the event of you not being able to pay the bill for your credit card.

A secured credit card can be used when building your credit history or getting back on your feet after a bad credit experience. If utilized well, it could be a game-changer in your credit life.

Secured credit cards function just like unsecured credit cards (when the account has been validated and the security deposit has been paid).

Secured credit cards in Canada can be used to buy things online or in person. You can then pay for these purchases by making monthly minimum payments.

The issuer often reports these payments to the credit bureaus of Canada. However, it is important to check if they do report payments because not all issuers do. If they don’t report payments, their inaction could affect your credit score.

Secured credit cards in Canada are not renowned for low-interest rates and high-value reward programs, so it is better to consider secured credit cards as something to make do with until better credit products are available to you.

When your credit has been improved, you can shut down your account. You will get your deposit back when you do this, then you can apply for other credit cards with benefits that have more value.

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 holder of the card.

More benefits and rewards come with unsecured credit cards. Secured credit cards don’t come with 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 the best credit cards Canada has to offer.

Pros and Cons of Secured Credit Cards

Benefits

• 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).
• Rewards and cash backs are provided by some cards.

Downsides

• Security deposits may be as high as $500 at a minimum.
• Monthly/annual fees are charged by some cards
• 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 your account down if you pass the credit limit more than a single time.

What to Consider When Choosing a Secured Credit Card

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

Reporting to Credit Bureaus: Issuers often report payments to the credit bureaus of Canada. However, it is important to check if they do report payments because not all issuers bother to.

If they don’t report payments, their inaction could affect your credit score and affect 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 have access to 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.

Eligibility for Secured Credit Cards in Canada

When it comes to secured credit card issuers, their requirements for giving you a secured credit card are not going to stress you out. It’s relatively easy to get one. Here are the eligibility requirements you will need to fulfill:

• You will have to provide your credit score
• Minimum income requirements are often low or non-existent for a lot of issuers
• You often have to be a Canadian citizen or resident who is 18 and above for issuers to grant you secured credit cards

How to Apply for Secured Credit Cards in Canada

The process of applying for secured credit cards from financial institutions and banks in Canada is mostly the same.

Even though some alternative institutions offer guaranteed/instant approval, most institutions (especially traditional banks) still require an application process. Below is a list of steps you are likely to meet:

1. Assess the terms and conditions. Accept them.
2. Personal information like address, name, and social insurance number (SIN) should be provided.
3. You may be asked to show proof of employment.
4. Select an option for whether you want an authorized user or not.
5. Transfer your deposit through cheque or bank transfer after your account is approved.

You are advised to wait six months before applying for an alternative card (if your application was not approved). Credit card issuers may interpret multiple and successive card applications as a sign that the person applying is in a financial crisis.

Are Secured Credit Cards Safe?

Yes, secured credit cards are generally safe. These cards are issued by banks and alternative financial institutions, so there is no need to panic. As expected, banks are obligated to prioritize matters that relate to security.

What are the Top Secured Credit Cards in Canada and How Do They Compare?

For a better assessment of some of the secured credit card options available to Canadians, here is a table that sorts out their features (cards featured are Neo Financial and Plastk):

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.

FAQs on Best Secured Credit Cards in Canada

What Is the Best Secured Credit Card in Canada?

It all depends on your personal finances and how much you can pay for the security deposit. Different issuers set different minimum deposits, so assess your options and make an informed decision when choosing from the secured credit cards in Canada.

Some of the very best you can choose from include:

• Neo Financial Secured Card
• Plastk Secured Visa Reward Credit Cards
• Home Trust Secured Visa Card
• Home Trust Secured Annual Fee Visa Card
• Refresh Secured Card
• Home Trust Secured Visa Card

What Will Happen If I Close My Secured Credit Card?

In the event of you closing your secured credit card, you will get have your security deposit back on the condition that you do not have a remaining balance on the card or pending charges.

Sometimes, it takes about 60 days to get your money back. This is because the issuers usually take their time to make sure there are no pending charges still hanging about.