Secured credit cards in Canada are a powerful tool if you need to repair your credit score. In the world of finance, your credit score is like a silent gatekeeper deciding your eligibility for loans, mortgages, or even your dream job. But what happens when this gatekeeper isn't on your side?

When traditional credit cards are out of reach, a secured credit card is one of the best ways to regain control of your financial future. They work just like regular cards and report to the credit bureaus. Using one responsibly, making your payments on time, and paying off the balance in full every month will start boosting your credit score quite quickly.

There's just one thing that makes a secured credit card different from a regular credit card – the security deposit. Here's what to know and how to get one of the 7 best-secured credit cards in Canada.

What is a secured credit card?

A secured credit card works a bit differently than a traditional credit card, although they function the same when you pay for something. But before you get a secured credit card, you have to provide a security deposit. Why do you have to do that?

What is a security deposit?

Think of it this way: Imagine you're signing a lease for an apartment. You typically provide a security deposit to cover any potential damage you might cause to the unit. Similarly, when you sign up for a secured credit card, you make an upfront deposit. You're providing collateral—the cash deposit—that guarantees the lender won't be left high and dry.

It's all about building trust with the lender. If you've got a history of financial hiccups or if you're just starting to build credit, this deposit acts as an insurance policy for the lender. If you stumble and can't pay back your credit, the lender can dip into this fund. Hence, it's ‘secured' because there's a safety net that protects both you and the lender in the event you can't pay.

Security deposit vs credit limit

The amount of the security deposit is usually equal to the credit limit you want on the card. However, in some cases, the deposit might be lower than your approved credit limit.

Is a secured credit card guaranteed approval?

A secured credit card in Canada is based on the same principles as a secured loan. A secured credit card can often be considered a guaranteed card because they are designed for people with bad credit or no credit, but that doesn't mean every secured credit card offers guaranteed approval for everyone. When you get a secured credit card, your collateral will be the amount of money you deposit.

The lender isn’t at risk because the money is available. This makes secured credit cards an excellent and easily accessible option for people who don’t have credit and can’t get a traditional credit card, and it’s a great way to rebuild your credit in Canada if you've had some mishaps on your credit file.

Using a secured credit card vs a regular credit card

A secured credit card functions just like a regular credit card. Once you’ve paid the security deposit, the card can be used for purchases in person, online, over the phone, and abroad. Just like with a regular card, you will receive a credit card statement that shows your total balance owing, the minimum payment amount, and when it's due.

Most credit cards, including secured credit cards, offer a 21-day interest-free grace period. If you do not pay off your purchases in full during this grace period, they will start to incur interest charges.

Payments you make are reported to the credit bureaus, TransUnion or Equifax. As long as your payments are made on time, that positive repayment history will help to (re)build your credit rating. While anyone can take advantage of secured credit cards, they are designed for Canadians with low credit scores, and they will get the most benefit from using them.

The 7 best secured credit cards to build or repair your credit score

Secured credit cards in Canada help to build payment and credit history. Every payment you make is reported to both credit bureaus, Equifax and TransUnion. By making payments on time and keeping your balance under 30% of available credit, you can start to see your credit score increase within just a few months. 

It’s important that you also pay your other bills on time and in full to really benefit and improve your credit. Once you’ve got a credit score of between 550 to 650, you may be approved for an unsecured credit card. An unsecured credit card is revolving credit and this is what you commonly get from Visa, Mastercard, or American Express.

Secured credit cards in Canada generally have an interest rate of anywhere between 12% to 24.99%. There may be annual fees from $29 and up depending on the card and the benefits it provides. However, you’re going to see some zero-annual fee options as well. Nowadays, there is a secured credit card to fit all types of needs, goals, shopping habits, and the type of rewards you want.

1. Neo Secured Mastercard

Secured Credit Card
Neo Secured Mastercard
  • Annual fee : 0$
  • Interest Rate : Up to 24.99%

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The Neo Secured Card is a great way to build your credit up and, in our opinion, is the best secured credit card in Canada. There is no credit check required to get this card, and approval is guaranteed as long as you are a Canadian resident, the age of majority in your province is residence, and submit the security funds. Neo Financial is now reporting live secured card transactions to TransUnion and all previous transactional history has been retroactively captured. This can help you build your credit.

The minimum security deposit is just $50, interest rates are between 19.99% to 24.99% depending on your credit profile, and there is no annual fee.

Neo cardholders earn at least 0.5% instant cash back, and can earn up to 15% cash back for each first purchase you make at a Neo partner merchant. Neo has partnered with over 10,000 businesses across the country, which means cardholders end up earning an average of 5% cash back, making it one of the best cash back credit cards on the market.

Examples of participating stores include Earl’s Restaurants, Harry Rosen, and If your monthly average cash back is less than 0.5% across all your purchases, Neo will top you up. Their credit limit ranges from $2,500 to $10,000.

2. KOHO Mastercard® Prepaid Credit Card

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KOHO Mastercard® Prepaid Credit Card
  • KOHO is a full-service app and reloadable prepaid credit card with no hidden fees.
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If you open an account with KOHO, you get a free prepaid credit card that you can load funds and enjoy no-fee spending everywhere that Mastercard is accepted. While a prepaid card doesn’t technically help you build credit like a secured credit card does, KOHO is currently the only prepaid card on the market that offers a credit-building service for users.

If you subscribe to KOHO's Credit Building program, they'll open a tradeline on your credit file and report your monthly subscription payment. Every on-time payment can help boost your score over time. The fee is $10 a month if you have the KOHO free Easy plan. Otherwise, it's just $7 per month with the Essential or Extra account package.

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The Credit Building program helps you to increase your credit score and improve your finances. By signing up, you'll receive a $20 bonus plus you’ll be earning cash back when you spend with your KOHO Prepaid Mastercard. Depending on your account, you can get up to 2% cash back on your eligible purchases and earn up to 2% interest on your deposits.

You get a prepaid card and an app that automates savings and helps with budgeting. There are no other fees, just $10 per month for credit building. There is no credit check required to open an account with KOHO, get a prepaid card, or sign up for Credit Building – which makes the KOHO Prepaid Mastercard one of the best cards in Canada for bad credit.  

3. Plastk

Plastk Secured Visa

Annual fee: $48

Monthly maintenance fee: $6

Interest rate: 17,99 %

Offer: 0% APR for 3 months + 5,000 BONUS REWARD POINTS
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The Plastk Secured Visa Credit Rewards Card has some great perks including a below average interest rate of just 17.99%. There’s an annual fee of $48 as well as a $6 monthly maintenance fee, adding up to a total annual cost of $120 in fees However, Plastk was the first secured credit card to offer a rewards program and the perks help to make up for the fees. 

This card also offers a longer 25-day grace period with no interest as long as you pay off your purchases in that time frame. Plus, you earn points on purchases everywhere that Visa is accepted, and you can redeem them for cash back, travel, merchandise, and more. Every 250 points is worth $1, and there are no minimum purchase requirements.

Right now, you get a 0% interest rate on purchases for the first 3 months after signing up to get a Plastk Secured Credit Card. Once approved, you'll get 5,000 bonus points that you can redeem after 3 months ($20 value). You can get a credit limit from $400 to $10,000.

4. Home Trust Visa

Interest rate: 14.90% or 19.99%
Annual fee: $0 – $59
Security deposit: $500
Authorized users: Yes

*Not available in Quebec

The Home Trust Secured Visa comes in two different options to suit your needs and goals. The free no annual fee option comes with a 19.99% purchase interest rate. If you think you might need to carry a balance, then you can get the low-interest card that costs $59 per year with a 14.90% interest rate.

The minimum security deposit required for the Homestrust secured card is $500. You can add another authorized user as well. They offer high credit limits of up to $10,000 – if you can afford to submit that much to secure the card. Unfortunately, the Home Trust Secured Visa isn’t available to residents of Quebec or anyone currently in bankruptcy.

5. ATB Alberta Secured Mastercard

Interest rate: 19.99% on purchases, 22.99% cash advance
Annual fee: $49
Additional card fee: $25
Security deposit: $500

*Only available to residents of Alberta

The ATB Alberta Secured Mastercard is exclusively for Alberta residents only. The annual fee is $49 per year plus $25 per additional card if you wish to add an authorized user. The interest rates are standard at 19.99% for purchases and 22.99% for cash advances. If you default, the purchase rate increases to 24.90% and the cash advance rate increases to 26.90%.

The minimum security deposit to get the ATB Secured Mastercard is $500. With the card, you can get up to 25% off on eligible car rentals through Avis and Budget. Unfortunately, you won't qualify for this card if you have declared bankruptcy in the last 5 years.

6. Capital One Secured Mastercard

Interest rate: 19.80% on purchases, 21.90% on cash advances
Annual fee: $59
Security deposit: $75

The Capital One Secured Mastercard comes with an annual fee of $59 with an interest rate of 19.8%. It’s one of the lowest minimum required deposits starting at $75 and goes up to $300. It’s a good choice for those who want a secured credit card but don’t have a huge amount of cash for a deposit. If you have $75, approval is guaranteed.

7. Vancity Enviro Secured Card

enViro Classic Visa Card with Low Interest Rate Plus Vancity Rewards

Interest rate: 11.25% or 19.50%
Annual fee: $0 – $395
Security deposit: $500

*Only available to residents of British Columbia

The Vancity Enviro Secured Card is from the Vancity Credit Union in British Columbia, and it has great perks like an insurance for travel, lost baggage, and price protection. There’s a rewards system as well, depending on the card you choose. The My Visa Rewards Plus program includes purchase redemptions, travel, and charity donations. Any of the credit cards offered by Vancity can be applied for as a secured card. The interest rate is either 11.25% or 19.50% depending on the specific card, and the annual fee ranges from $0 for a basic no-rewards card, up to $395 for a premium rewards card. The minimum deposit to get this unsecured credit card is $500.

Secured credit cards vs unsecured credit cards: what's the difference?

Extending credit to people is an incredibly risky business for lenders. So they use credit scores as a type of report card to see how likely you are to pay the money back as agreed or default and cause them to take a loss. If you have bad credit or no credit, secured credit cards allow lenders to extend credit to people who are more likely to cause a loss than people with good credit because they come with a safety net that unsecured credit cards don't.

A secured credit card is like a prepaid agreement. You deposit money upfront, which typically becomes your credit limit. It's designed to reduce the risk for both you and the lender because the deposit helps to cover potential missed payments.

Unsecured credit cards do not require a security deposit because the lender trusts that the borrower will pay back their debts as agreed. The credit limit is set by the lender based on your credit history and income. These are traditional credit cards and offer more flexibility, but require careful management to avoid debt and defaulting on your payment obligations. Your choice between the two depends on your current financial situation and credit score.

When to consider a secured credit card

One crucial decision you might face is whether or not you need a secured credit card. This type of credit card is not for everyone, but in certain situations, it can be a lifeboat guiding you toward the shore of better credit health. Here's when to consider getting one:

You Have a Bad Credit Score

Every credit card issuer has a different minimum credit score requirement for a regular credit card, but it generally ranges from 650-660. If your credit score falls below 660, a secured credit card is probably your best option. Using it responsibly can help improve your credit score over time.

You're Trying to Build a Credit History From Scratch

If you're new to the world of credit, say a recent graduate or new to the country, and don't yet have a credit history, a secured credit card can be a good starting point to establish your creditworthiness. No credit history is often worse than a bad one, so a secured credit card can help you access credit and start things off on the right foot.

You Need to Rebuild Your Credit After Something Bad Happened

Even people with excellent credit can experience financial missteps or life-changing events that negatively impact their credit. If you want to repair your credit score, a secured credit card can be a powerful tool to help you do that.

You've Been Denied an Unsecured Credit Card

If you've been denied an unsecured credit card due to a low credit score, lack of credit history, or you're carrying too much debt (even if you've never missed a payment!), a secured credit card can offer a viable alternative.

How to use a secured credit card to improve your credit score

Using a secured credit card to improve your credit score involves a set of disciplined financial habits. Here are some key steps:

Make Consistent, On-Time Payments

This is the most critical step. Your payment history has the biggest impact on your credit score. Late or missed payments will lower it, so ensure you always pay at least the minimum amount due on time.

Pay in Full

While making minimum payments is crucial, paying your balance in full each month is even better. This not only saves you from paying interest but also demonstrates that you can handle credit responsibly.

Keep Your Utilization Low

Credit utilization is the percentage of your credit limit that you're using. Aim to keep your utilization below 30%. For example, if your secured card has a $500 limit, try not to carry a balance of more than $150. This shows lenders that you don't rely on your full credit limit.

Don't Close the Account

Length of credit history also affects your credit score. Keeping your secured credit card open, even when you've moved on to a traditional unsecured card, can have a positive impact on your credit history.

Monitor Your Credit Report

Regularly review your credit report to ensure all the information is accurate. Dispute any errors you find with the credit bureau. An app like Borrowell is free, easy to use, and allows you to check your credit score as often as you want without impacting it.

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Graduate to an Unsecured Card

After demonstrating responsible use of your secured card for a certain period, consider asking your lender if you can transition to an unsecured card. This can give you access to higher credit limits and possibly better rewards.

How much money you'll need for the security deposit

The minimum amount you need for a security deposit on a secured credit card in Canada varies from one credit card issuer to the next and also depends and the credit limit you want. At the time of writing, the Neo Secured Mastercard has the lowest minimum deposit of just $50, followed by the Capital One Secured Mastercard at $75. If you want a higher credit limit, you'll need to provide a higher security deposit to match it.

Some card issuers let you secure the card with up to $10,000. Luckily, the security deposit is refundable, provided you've paid off your balance in full if and when you decide to close the account or upgrade to an unsecured credit card. Always check the specific terms and conditions of any secured credit card you're considering to understand the deposit requirements.

How to get a secured credit card in Canada

Luckily, secured credit cards in Canada are fairly simple to get with the same process as getting a regular credit card – with the added step of submitting security funds. At the very least, you need to be a permanent Canadian resident and be at least the age of majority in your province or territory of residence. Here's what to expect:

Assess Your Needs

First, determine why you need a secured credit card. Are you trying to build credit for the first time, or are you repairing a low credit score? The reason for needing one in the first place can help you identify the right card for you.

Research and Compare

Look into various secured credit card options available from different financial institutions, starting with the best ones on this very list. Compare annual fees, interest rates, minimum deposit requirements, and credit limits.

For example, if you know you are disciplined enough to pay the balance off in full every month, then interest rates are irrelevant and you might want a secured credit card with great rewards instead, like the Neo Secured Card that offers excellent cash back. On the other hand, if you are likely to carry a balance, a credit card with a low-interest rate makes more sense.

Some banks or credit unions might also offer benefits like credit education tools or the possibility to graduate to an unsecured card after a period of responsible use – like the ATB Alberta Secured Mastercard.


Once you've chosen a card, you can usually apply online, over the phone, or in person at a local branch. You'll need to provide personal information such as your name, address, social insurance number, employment information, and income details.

Submit Your Security Deposit

If approved, you'll need to provide a security deposit. The amount can vary but it's typically $50 to $500. or more if you want a higher credit limit. This deposit is refundable and usually sets your credit limit. The credit card issuer will give you instructs on how and where to send your security deposit, but not always. Capital One is known for giving a credit limit higher than the security deposit.

Secured Credit Card vs Prepaid Credit Card

When navigating the world of credit in Canada, you might come across both secured and prepaid credit cards – including on this very list! While they might seem similar at first glance, these two types of cards serve very different purposes.

A secured credit card is a type of credit card designed for people looking to build or repair their credit history. To get a secured credit card, you have to provide a refundable security deposit, which usually determines your credit limit. You can then borrow up to that limit, make purchases, and are required to make monthly payments, just like with a traditional credit card. Your payment history is reported to Canadian credit bureaus, thereby helping you establish a credit history or improve your credit score.

On the other hand, prepaid credit cards, Visa debit cards, and Mastercard debit cards do not help you build credit. Instead, they are usually attached to a bank account and only allow you to spend the money you already have. You load the card with your own money upfront and then use the card to make purchases online, in-store, and abroad like a regular credit card.

There are no interest charges or monthly payments because you are not borrowing money from a creditor — you're just spending the money you've already loaded onto the card. For this reason, prepaid cards do not report to the credit bureaus, so they have no impact on your credit score.

If your goal is to build or improve your credit history, one of these best secured credit cards in Canada are the way to go. If you're looking for a convenient tool for budgeting or digital transactions without involving credit, a prepaid card might be a better choice.

Frequently asked questions about secured credit cards

How does a secured credit card work?

A secured credit card works the same as a regular credit card, but requires a refundable security deposit upon account opening. This deposit typically determines your credit limit. You can then use the card for purchases, make monthly payments, book hotels, travel abroad, etc. You could potentially accrue interest if you carry a balance. Your payment history and balance owing are reported to the Canadian credit bureaus, helping you build or repair your credit history.

What's the best secured credit card to build credit?

The best secured credit card depends on your individual needs and circumstances. However, the Neo Secured Card is easy to qualify for, has the lowest minimum security deposit, and offers the best cash back program.

Does Tangerine have a secured credit card?

No, Tangerine does not currently offer a secured credit card. They offer unsecured Tangerine credit cards with cash back rewards. However, Tangerine does provide a Visa debit card linked to your chequing account. It is accepted everywhere that Visa and Interac are accepted and the funds a debited directly from your account. You can use it like a credit card to shop online, abroad, book flights, hotels, and more. It's always a good idea to check directly with Tangerine or visit their website for the most current information about their credit card offerings.

What is considered a low-interest rate for a credit card?

Most secured credit cards range from 19.99% to 24.99% APR. If you can find a card that’s less than this, it’s considered a low-interest rate. If you can manage to find a card that offers interest rates in the single digits, this is a great rate but you probably won't earn any rewards. As you build your credit, you’ll be more likely to be approved for traditional cards with better perks.

Why does a low interest rate matter for a secured credit card?

If you tend to carry a balance, the lower the rate makes it easier to pay down your debt because you're not charged as much interest. Therefore, more of your payment goes towards the principal and less to interest charges. Your card issuer charges interest rates on outstanding balances as per your agreement when you received the card. The higher the interest rate, the more interest you’ll have to pay.

How long will it take to build credit with a secured credit card?

It will probably take about three months before your credit starts to gain momentum and show improvement. However, this varies greatly depending on your credit profile at the time you got the card, your individual financial situation, and exactly how you use the card. But this estimate is based on you making regular payments as you use your secured credit card and keeping your balance as low as possible. You also want to be diligent about paying other bills.

Do banks offer secured credit cards?

Yes, there are many Canadian banks that will offer secured credit cards. Ask your bank if they offer a secured credit card. Make sure to look through their terms and conditions as you might get better rates with other secured credit cards. The interest rate is important and you also want to be sure your secured credit card can transition to an unsecured card once your credit has improved.

How do secured credit cards help build credit?

When you get a secured credit card, the issuer reports your payment history and credit utilization to the credit bureaus. When you pay on time and keep a low balance, you can then improve your credit score.

When do you get the deposit back that is put down to get a secured credit card?

Secured credit cards require you to put down a deposit. You’ll be refunded when the account balance is paid and you close the account. You may also get your deposit back when your secured credit card is converted to an unsecured credit card.

How much can you increase your credit score by using a secured credit card?

The goal when you take on a secured credit card is to increase your credit score. The score will rise depending on your credit beforehand and overall financial well-being. If you use the card and always pay it on time, you can expect to see up to a 200-point increase over a 12-month period, given all your all financial obligations are met and in good standing.

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