Best Secured Credit Cards in Canada For 2020

Life with no credit card is challenging. It’s more than a plastic card that pays for gas, groceries and your Tim Hortons coffee. A credit card is a gateway to a myriad of financial services like a mortgage or loan to help you afford big expenses – a house, apartment, car – at a low interest-rate.

But there’s a catch. To be eligible for a good credit card with low interest rates and an attractive pack of insurance benefits and rewards, you must already have a stellar credit score. But for people who have never owned a credit card before, or those with poor credit scores, qualifying for a top quality credit card is almost impossible. This is where secured credit cards can help.

A secured credit card is a type of credit card that requires you to place a refundable security deposit as collateral. It gives lenders the confidence that you will be able to pay them back. The amount you place as the deposit becomes your credit limit. Just like a traditional, non-secured credit card, you do have to make monthly payments to avoid penalty. If you want to cancel your card to upgrade to a non secured one, you will get your security deposit back provided you pay your balance in full. 

With a secured credit card, you get to establish a pattern of healthy borrowing habits, which progressively boosts your credit score overtime as the provider reports your payments to credit bureaus.

Now that you know the basics, let’s look at the top secured credit cards available in Canada today. 

Best Secured Credit Card with No Annual Fee

The Home Trust Secured No-Fee Visa card is a great option for those considering to re-establish their credit from ground up. 

One of the best features of this secured credit card is it has no annual fee, one of the few secured cards on the market that you can use for free. Annual fees can be jarring on the wallet, especially if your main concern is paying off your debt and improving your credit health. You can immediately start using this credit card if you have enough funds to meet the minimum required deposit of $500. This card comes with a purchase interest rate of 19.99%, but it also gives you a non-interest grace period of 21 full days after the due date. 

When it comes to monthly payments, there are two options – you can pay the balance in full, or pay 3% of the new balance shown in your monthly account statement or $10 (whichever is greater). 

The HomeTrust Secured No-Fee Visa requires a $500 minimum deposit and allows up to $10,000 deposit, with the credit limit escalating in a one to one ratio from $500 to $10,000. This means a $500 deposit will give you a $500 credit limit. If you cancel your credit card, your security deposit will be reimbursed in full as long as you clear any outstanding bills.

Best Secured Credit with Lowest-Security Deposit Requirement

Staying true to its name, the Capital One Guaranteed Secured Mastercard approves almost every applicant provided they meet a few eligibility requirements and can place a security deposit. The size of the security fund you are approved for will depend on your current credit score and a few other criteria. But, you can qualify for a deposit as low as $75 and as high as $300. You can receive a credit limit up to $2500 as long as you proportionally increase your deposit.

This card is fantastic for users who want a credit card instantly but don’t have a lot of funds to make their security deposit. Also, here’s the good news for those with a damaged credit history– if you consistently pay your bills, Capital One will quickly report your positive performance to the major credit bureaus which will ensure that your credit score improves fast as well. 

Capital One’s Guaranteed Secured Mastercard comes with an annual interest rate of 19.8%. To avoid paying interest, please pay your balance in full. As a perk, this card comes with a Zero Liability feature which covers you against unauthorized or fraudulent purchases.

Best Secured Credit Card with Low Interest

The Home Trust Secured Visa is similar to its No-Fee version in most aspects, except it gives the users a lower interest rate of 14.90%, making it perfect for people who are prone to carry a balance month-to-month. 

This card has an annual fee of $59.00 which can be paid in lump-sum, or you can choose to opt for a monthly payment of $5 per month. Do note that this will make your annual fee $60 in total. Also, there is a grace period of 21 days after the due date to pay off your balance without being charged interest. 

The minimum and maximum credit limit for the Home Trust Secured Visa is $500 to $10,000. To increase your credit limit, just send additional funds to Home Trust as a security deposit. 

Everyone over the age of majority in their residential province (except Québec) can qualify for this card, except those who are currently in bankruptcy. If you have had a past bankruptcy but are cleared now, you will still qualify. 

Best Secured Credit Card to withdraw cash

This isn’t your traditional secured credit card, but it offers the same features and is targeted towards those with a poor credit score. The BMO Prepaid Travel Mastercard is a bank-issued secured credit card that lets you load the card with your own money. The amount you deposit establishes your credit limit.

The annual fee for this card is $6.95, and it has no interest rate for purchases. The minimum credit limit is $100, and the maximum limit is $10,000. You can withdraw cash or make purchases in any stores that accept a Mastercard. It also comes with a zero liability policy which is a security feature to protect you against fraud. 

There are other features you can add on to make your credit card comprehensive. Credit Alert is one of them. With this feature you will receive an updated credit score every three months. The Canadian Credit Bureaus will also monitor for suspicious changes. The two other add-ons available– InfoProtector 360™ which protects you, your documents and devices from being accessed by third-parties; BMO Roadside Assistance which provides free battery boosts, lockout and towing services, and flat-tire change throughout Canada and Continental U.S.

Methodology: How We Choose The Cards In This List

The credit cards mentioned above are chosen upon assessing and comparing its features such as annual fee, security deposit, eligibility requirements, interest rates and more against every available secured credit card option available in Canada today.

View the best overall credit cards in Canada.