The best secured credit cards in Canada for 2025

Best overall secured credit card

Ratehub.ca’s take

The Secured Neo Mastercard is the first secured card on the market to offer cash back rewards. The card offers 5% cash back on purchases made with participating Neo partners, 1% - 4% cash back on gas and grocery, and up to 1% everywhere else (up to $680 cash back annually).  

Its minimum security deposit of only $50 makes it quite possibly the most accessible card on this list. You can also consider the Secured Neo World Mastercard, which offers higher spending caps and a higher cash back rate starting from 2% for gas, grocery, and recurring payments.

The only visible drawback here is the purchase interest rate. While its low end sits comfortably at a standard 19.99%, it can reach as high as 29.99% depending on your credit application and province, so read the fine print on your contract and make sure you’re getting a rate you can live with.

Best premium secured credit card

Ratehub.ca’s take

Canada has long had a dearth of secured credit cards, but the Secured Neo World Elite Mastercard promises to change all that. The card offers a jaw-dropping 5% cash back on groceries, 4% cash back on recurring purchases, 3% cash back on gas, and up to 1% everywhere else. The card is available with a $200 security deposit and a matching credit limit (up to a maximum of $10,000), making this an excellent credit card for newcomers and freelance/self-employed individuals. While there is a spending cap for each cash back category, it's much higher than the caps on similar cash back cards. 

If you have an additional $5,000-$10,000 to deposit in a Neo Everyday account, you'll get a boosted cash back rate: up to 7% for groceries, 5% for recurring purchases, and 4% for gas. However, your security deposit does not count towards the boosted cash back rate — so any extra cash you have beyond that might be better leveraged in a GIC or a high-interest savings account.

Best no fee secured credit card

Ratehub.ca’s take

The Home Trust Secured Visa Card is a no-frills card, perfect for those looking to build their credit without an annual fee, and a minimum deposit of just $500. Home Trust sends regular reports to both major credit bureaus (Equifax and TransUnion) to help you build or rebuild your credit score. The card’s interest rate of 19.99% is standard (although there are other secured cards who offer lower rates). 

If you’re willing to pay a $59 annual fee, you can get a below-average rate of 14.90%. While it may not feature any of the perks or rewards of other cards, if used responsibly it will help you build your credit and graduate to an unsecured credit card in the future. 

Also consider

Ratehub.ca’s take

While it’s not a secured credit card, the KOHO Essential account offers an interest on your balance along with a prepaid credit card that gives you cash back on everyday purchases. You can also subscribe to KOHO’s credit building feature for $10 a month: this allows you to set up a secure line of credit by depositing $30-$500 as collateral. KOHO will report your credit history to Equifax.

While the account’s interest rates and cash back rewards are outstanding, the additional fee for the credit building service (amounting to $120 annually) makes it less attractive than a standalone secured credit card.

How does a secured credit card work?

A secured credit card requires you to provide a cash deposit as collateral. The card’s credit limit typically corresponds to the amount you deposit. For example, if you deposit $500, you’ll have a $500 credit limit.

Once you’ve made your security deposit and completed activation, a secured credit card works just like any other - you can use it to make any in-store or online purchases you wish. And, just like a regular credit card, you’ll get a bill every month that you’ll be expected to pay on time. Whether you pay off the full balance or make the minimum payment is your decision, but it’s important to remember that a secured card’s main purpose is to help you build your credit, so try to ensure your payments are always on time.

The provider of the card should then report your payments to credit bureaus such as Equifax and TransUnion which, if you’re using the card responsibly, will slowly improve your credit score as you continue to use the card. On that note, it’s important to ensure that your issuer does report to credit bureaus, as some don’t.

What happens to the security deposit on a secured credit card?

While you cannot access the security deposit while you have the secured credit card, your deposit can be placed in a guaranteed investment certificate (GIC) to collect interest, which will later be returned to you, when your credit improves and you qualify for an unsecured credit card. The size of your security deposit is largely up to you, but providers will have minimum and maximum amounts they'll allow. Minimum security deposits can range from $50 to $500, whereas the maximum deposit on most secured cards is usually around $10,000.

In most cases, to get your deposit back, you must simply close the account and it will be returned to you within 60 days (providing you don't have any outstanding balances or pending fees).

When is a secured credit card a good idea?

The great thing about secured credit cards is that nearly anyone is eligible to get one. Because these cards are geared towards young people with no credit history, newcomers to Canada, or those trying to rebuild their credit rating after a bad financial period.

When you want to repair your credit score

A secured credit card is a great choice if you have a poor credit score and want to improve it. This is because you set your spending limit ahead of time with a secured card, meaning you avoid overspending and potentially damaging your credit score by driving up your utilization ratio or amassing such a large balance that you miss payments. Some secured credit cards also offer credit building services, so they report your on-time payments to credit bureaus which helps improve your score over time. 

When you’re new to Canada

As a newcomer to Canada, you won’t be eligible for credit cards that have a high credit score requirement when you first arrive. At the same time, the cards you’re eligible for may have a low credit limit that may make it difficult to make larger purchases, especially if you have a family. A secured credit card helps you establish your credit more easily since your credit limit can be as high as the collateral you provide. 

Also read: How your credit card impacts your credit score

How fast will a secured credit card build your credit?

The answer to this question largely depends on what your credit situation is when you first get the card.

Those with no credit history (for whom this is their first card) will have the easiest time. Providing the card is used responsibly and all bills are paid in full and on time, they can see their credit score grow in as quickly as six months. In some cases, with no bad credit score to repair, they may be able to apply for unsecured cards even earlier.

If you're coming to a secured card with bad credit (especially as the result of bankruptcy or a similar financial setback), you'll most likely have to wait a bit longer. The typical timeline here is more like 12-18 months of consistently positive credit reporting to Canada's credit bureaus. While that may sound daunting at the beginning, with patience and healthy financial habits, you'll get there before you know it.

What to consider when choosing a secured credit card

Credit bureau reporting

Most people want a secured credit card for the same reason: to build or rebuild their credit and eventually graduate to an unsecured credit card. Knowing this, it’s incredibly important to ensure that the card’s provider reports to at least one Canadian credit bureau (but ideally both - Equifax and TransUnion). Your credit score can’t improve if these organizations aren’t seeing and recording your regular payments, so make this your top priority.

Minimum security deposit

Secured credit cards match your credit limit to the amount you’ve put down as a security deposit, but if their minimum deposit (some can be as high as $500) is more than you can afford, you may want to look at other, less-prohibitive secured cards. After all, that money will be tied up until you close the account, so ensure that it’s an amount you can afford to live without for an indefinite amount of time.

Annual and monthly fees

Because you’re using this card to help you get into a better financial situation, high annual and monthly fees aren’t your friends. Ideally, seek out a secured card with either no fees or very low ones. A card like this may not offer rewards or ultra-low interest rates, but if you’re serious about using it to improve your credit, neither of these features will be a factor. 

How to get a secured credit card

Secured credit cards are incredibly easy to be approved for and often don’t require a minimum personal income or hard credit check. That being said, there are a few basic requirements:

• You must be the age of majority in your home province or territory 
• You must be a resident of Canada
• You must be able to pay the minimum security deposit for activation (usually a minimum of $50)

Depending on your financial institution, you may not see secured credit cards visibly offered on their website. Many larger banks do offer these cards, but you may have to call them or visit a branch in person to apply. Alternatively, smaller financial institutions will typically make their secured credit cards available to apply for online. In this case, the process is quite easy.

• Select the card you wish to apply for
• Read and accept the card’s terms and conditions
• Submit your personal information (name, address, social insurance number, employment, etc.)
• Wait to hear if you’re approved. If so, you’ll need to deliver your security deposit by cheque or bank transfer to activate the card.

If you’re not approved, don’t jump the gun and apply for another card again immediately. Each credit card application involves a hard credit check, and too many at once will hurt your credit score and further reduce your likelihood of being approved for future cards. With this in mind, wait a period of six months before applying again.

Secured credit cards: pros and cons

Pros

• They’re a great way to build or rebuild your credit
• Your credit limit is matched to the amount of your security deposit, eliminating the risk of overspending and winding up in debt
• Nearly anyone can be approved for one, even those with bad or nonexistent credit history
• You can sometimes earn small rewards as you spend

Cons

• Annual or monthly fees can counteract your efforts to get financially stable
• High purchase interest rates can become a problem if bills aren’t paid on time
• Minimum security deposits can be prohibitive (sometimes as high as $500 up front) and you won’t be able to get it back until your account is closed

Tips for using a secured credit card

Have your deposit ready

You can’t begin using your secured credit card until you deliver your security deposit to the provider, and there’s usually a specific window of time to do that. If the deadline passes you by, you’ll lose your card before you even get a chance to use it. 

That’s why it’s important to have your security deposit together and ready to send before you even apply. If the card you want requires a higher-level minimum deposit ($400 or $500) that you don’t immediately have on-hand, either take the time to save up before applying or consider looking at more accessible cards.

Use the card responsibly

While it may be exciting to have a brand new credit card, it’s important to remember the end goal: improving or building your credit. Because you won’t be able to effectively do that if you spend recklessly or go over your credit limit, using your card responsibly is important.

Use the card for a few small purchases per month. Not only will this keep your account active, it will ensure you’ll be able to pay off your monthly bill in full. Do this enough times, and you’ll slowly see your credit score improve.

Pay bills on time and in full

Providers of secured credit cards report your payments to the credit bureaus who assign you a score, so make sure your payments are never missed and on time.

And, while you can certainly choose to pay the minimum every month (after all, it’s your own money), you’ll be running the risk of accumulating interest the more you do this. If your card has a standard interest rate of 19.99% or thereabouts, this will slowly begin to ruin any progress you’ll be making with your credit, so it’s worth it to pay your bills in full whenever you can. 

Monitor your credit score

Because you most likely own a secured credit card to help build your credit score, it’s worth keeping a regular eye on your progress. Sign up with Equifax or TransUnion and request your credit report monthly to see how you’re doing. Not only can you get the thrill and encouragement of seeing your score rise, you can also quickly identify and diagnose any issues that are preventing it from improving.

Alternatives to secured credit cards

One alternative to a secured credit card is a secured personal loan. A secured loan allows you to put up an asset as collateral instead of cash. Some financial institutions offer credit building loans, and will report your payment history to the credit bureaus to help improve your credit score.

If you’re interested in paying off existing credit card debt, a balance transfer credit card is the perfect solution. These cards come with lower-than-average promotional interest rates (sometimes even no interest at all) and allow you to transfer over your current balance to pay it off with them. If you’ve got a solid repayment plan in place, you can take care of your debt during the promotional window (usually six to 10 months) without the extra stress of additional interest creeping in. 

Finally, you can also choose to use a prepaid credit card. However, prepaid cards do not report your payments to Canada's credit bureaus. While you may be able to use a prepaid credit card like any other unsecured card, you’ll never be able to use it to improve your credit score.

How to improve your credit score

If your credit score is too low to qualify for an unsecured credit card, here are the ways you can improve your credit score:

• Apply for a secured credit card and never miss a payment
• Pay down the balances on any revolving credit agreements (such as your credit card) to less than 30% of the credit limit
• Make all of your payments for services like cell phones and electricity bills
• Keep old credit accounts open to make your credit history longer
• Do not apply for several credit cards from many different lenders at the same time – this is called a hard inquiry and can decrease your credit score

Ultimately, improving your credit score comes down to demonstrating that you are trustworthy with credit, which means paying off your existing credit tools every month. If you do this, eventually your credit score will improve enough that you will qualify for an unsecured credit card

What is a bad credit score?

Your credit score is a number used by lenders to determine your trustworthiness as a borrower. It’s a number between 300-900, and the higher the score, the better. Many factors go into determining your credit score, such as the age of your oldest credit account, your payment history, the types and size of credit you have, and whether your credit products are often close to their limits. A “bad” or poor credit score is anywhere between 300-579. But you will usually still qualify for most secured credit cards with a low score.

Most credit card providers require a credit score of at least 600 to qualify for an unsecured credit card, but if your credit score is below that threshold, don’t worry, you can improve it.