How Long Does It Take to Get a Secured Card Approval?

The application process for secured and unsecured credit cards is similar. You will need to fill out the online application, and the card issuer will then evaluate your income and possibly other factors to determine your ability to repay any debt you incur on the card. The lender might request income documentation to verify your claims, and may or may not do a credit check.

Once you submit your application, you could receive a decision in minutes. If approved, you will find out your credit limit and the security deposit required to open the account. To make sure the process goes smoothly, it’s best to have the funds for the deposit on hand. Cardholders typically receive their new secured card within seven to 10 business days, and can begin using the card right away.

There are instances where an approval decision cannot be made using the automated system. If this happens, expect written correspondence in the next seven to 10 days notifying you of the credit card issuer’s decision. If you are not approved, the lender will send you a letter noting why and explaining your rights.


Pros Explained

Secured credit cards can be a good option for building or rebuilding your credit. Five benefits stand out for consumers with blemished credit or no credit at all.

  • You can often get approved for a secured credit card when you can’t get approved for a traditional credit card. Paying the security deposit shifts the credit risk away from the credit card issuer.
  • They typically report to credit bureaus. Unlike a prepaid credit card which functions more like a debit card, a secured credit card will send your account history to the credit bureaus to be included in your credit report.
  • A secured credit card can help you establish or re-establish your credit. Since payments are included in your credit report, paying on time and managing your balance will help improve your credit score. After raising your credit score, you may be able to qualify for a regular credit card.
  • Your security deposit is used only if you default on your payment. Unless your defaulted balance is more than your deposit, you won’t get sent to collections for defaulting on your payments. Though the card issuer will keep your deposit, you don’t have to worry about debt collectors hounding you for missed payments on the card. The late payments still will hurt your credit score, however.
  • You can earn rewards on purchases with some cards, such as Discover and Navy Federal’s secured cards.

How Can I Get a Secured Credit Card?

The process for obtaining a secured credit card varies, so you’ll want to contact your financial institution to ask about their process. To obtain a secured credit card through Navy Federal, the process is simple. First, open a qualifying Navy Federal savings account if you haven’t done so already. Then, make a deposit of at least $200 into your savings account. Finally, submit your application for a secured credit card. Once approved, you’ll be issued a card with a credit limit equal to your deposit.

More good news—with Navy Federal’s nRewards® Secured credit card, you’ll enjoy a low interest rate and no annual, balance transfer or foreign transaction fees. You’ll even earn interest on your initial security deposit. Plus, Navy Federal’s secured credit card goes the extra mile: for every dollar you spend using the card, you’ll earn one rewards point that you can redeem later for cash back, gift cards or merchandise. Most importantly, Navy Federal reports all major activity to the credit bureaus, allowing you to build your credit history.

Best Secured Credit Cards

Considering a secured credit card to help improve your score? The following are good options. They all report to the three major credit bureaus (Experian, TransUnion and Equifax) to help begin boosting your scores:

  • Capital One Platinum Secured Credit Card: Capital One will review your credit to determine whether you may put down a refundable security deposit starting at $49 to get a $200 initial credit line. If you want a higher credit line, you can deposit more that the minimum, up to your maximum approved line of $1,000. If you make all your payments on time, Capital One may offer you a higher credit limit starting at six months and possibly allow you to earn your deposit back as a statement credit. This card has no annual fee but a variable APR of 26.99%, which is on the higher side.
  • First Progress Platinum Prestige Mastercard® Secured Credit Card: There’s no minimum credit score requirement for this card, making it suitable for those with little to no credit history. You can apply with no negative impact on your credit score, it only takes a few minutes to get a decision, and you could get approved for a credit line of $200 to $2,000 if you’re able to make a required refundable deposit of equal amount. There’s an annual fee of $49, and the ongoing APR is a variable 10.24%.
  • Merrick Bank Double Your Line® Secured Visa® Card: With this product, your credit line will depend on the initial refundable deposit, which can be any amount from $200 to $3,000. You can add additional deposits at any time to increase your credit line up to $3,000. Once you’ve had the card for nine months, Merrick Bank will review your account activity to determine if you’re eligible for a credit line increase without an additional deposit. There is no minimum credit score for this card. The card features a variable APR of 17.45% and an annual fee of $36.

How Does a Secured Credit Card Work?

Once you have a secured credit card, you can use it like any traditional credit card. Keep in mind that because a secured credit card is a way to improve and build stronger credit history, you’ll want to pay your monthly bill on or before the due date. Even though you made a deposit to open the card, you’re still required to make your monthly payments.

Then, once you’ve established a history of good credit (which can happen after as few as 6 months of on-time payments), you can upgrade your account, and the hold would be released on your deposit—provided your balance is fully paid and the account is in good standing. Alternatively, some secured card providers will give you the option to transfer to another non-secured card. This option has the benefit of increasing your average account age, which could help your credit score.

If you have Navy Federal’s nRewards® Secured credit card, after just 3 months, you could be eligible for an upgrade. If you qualify, we’ll provide you with additional credit to allow for spending beyond your deposit.

Then, at 6 months, we’ll review your account monthly to see if you’re eligible to have your hold removed and be upgraded to a cashRewards unsecured card.

Do secured credit cards build credit?

They can. Secured credit cards are aimed at people with limited or poor credit history and can be a good way to improve your credit score. By making regular, reliable payments on a secured credit card, you can improve your credit score and access less expensive forms of credit.

Tips for Getting the Most Out of a Secured Credit Card 

A secured credit card can be an excellent way to build or rebuild your credit history and increase your credit score. You’ll create the most positive change by keeping a few tips in mind.

Pay on time

If you’re using a secured card to try to improve your credit, it’s very important to pay your bill on time, every time. Otherwise, in addition to late fees and penalties, you risk having late payments added to your credit report, which defeats the purpose of the secured card.

Watch your spending

Don’t forget about your utilization rate. FICO considers a good credit utilization rate to be less than 30%, so try to keep your card balance below 30% of your spending limit. To calculate this number, you can multiply your card limit by 0.3. Secured credit cards tend to have very low credit limits, so you shouldn’t plan to use your secured credit card for more than minor purchases. In some cases, you may have the option to increase your credit limit by paying a larger security deposit, but be careful not to take on more debt than you can handle.

Make payments in full

Contrary to popular belief, you don’t need to carry a revolving balance to boost your credit score. You can keep your credit utilization rate low and avoid hefty interest charges by paying your balance in full each month.

Track your progress

Monitor your credit reports regularly to ensure that your payments are reported correctly and that older negative items are removed on time. It’s also a good idea to periodically review all the information in your report to ensure that there are no inaccuracies. Ordinarily, you’re entitled to a free credit report once every 12 months from each of the three major credit bureaus: TransUnion, Equifax, and Experian. Due to the COVID-19 pandemic, you can access free reports from all three credit reporting agencies once each week through April 2022.

Prepare for the next step

After you’ve used your secured credit card responsibly for a while, the card issuer may automatically upgrade your account to a traditional, unsecured credit line. In this case, your credit limit typically increases, and the card issuer usually refunds your security deposit to you. Some card issuers, though, won’t refund your security deposit unless you close your account. Closing your oldest credit card account could hurt your credit score, so it may be smarter to keep the account open, even if you decide to apply for a separate, traditional credit card. 

What are the top-rated secured credit cards?

The Discover it Secured card, the Secured Mastercard from Capital One, and the Secured Visa from Merrick Bank are highly rated secured credit cards. Discover it Secured offers cashback rewards. The Secured Mastercard from Capital One has a low deposit requirement. The Secured Visa from Merrick Bank has a relatively low APR.

How do I close a secured credit card?

You can generally close a secured credit card at any time, as long as you are up to date with your payments and there is no balance outstanding on the card. To do this, contact your card issuer.

When you close a secured credit card, you should get your deposit back, less any fees that your card issuer imposes. Alternatively, your card issuer may offer to convert your secured credit card to a standard card if you regularly meet your payments.

Potential Benefits of Secured Credit Cards

There are plenty of advantages to using secured cards: A secured card can give you experience using a credit card, help you improve your credit profile and help you work toward a card with better rewards or a higher credit limit. 

It may help to think of a secured card like on-the-job training you can use to move on to bigger and better opportunities. 

Use a Secured Card to Build Credit

If you’re looking to build or rebuild your credit, you can use a secured card to help yourself build a successful track record. That means doing things like paying at least the minimum payment on time each month and using your card responsibly.

Keep in mind that missed or late payments could harm your credit. And so could exceeding your credit limit.

Another fact to consider: Some issuers may not report the status of secured cards. If better credit is your goal, look for a secured card that reports to at least one of the three major credit bureaus: Experian®, Equifax® and TransUnion®.

Secured Cards Can Help You Graduate to Traditional, Unsecured Cards

There’s no single right time to move from a secured card to an unsecured card. When and why you decide to apply for a traditional credit card will depend on your situation and goals. 

But some credit card companies may allow you to move seamlessly from a secured card to a traditional card without closing your original line of credit. The process may even involve returning your deposit.

Check with your credit card company to understand what’s possible and how your account will be treated if you transition to a traditional card. And be sure to understand how closing your secured card account could affect your credit.

Building Credit for the First Time Using a Secured Credit Card: Six Months to Your First Credit Score  

If you’ve never used credit before, you might not have a credit report at all, or you might have a credit report that doesn’t contain much information. In either case, the first step to attaining a credit score is opening a credit account. When you’re new to credit — for example, if you’ve never taken out a loan or had a credit card — it can be challenging to know how to begin. Because secured credit cards are typically available to people with poor or nonexistent credit, they can be a good starting point for establishing a positive credit history.

When you’re approved for a secured credit card, the account will typically appear on your credit report within a month. If you don’t already have a credit report, opening the secured credit card account will trigger the creation of a credit file for you.

Your First Credit Score

FICO is the most widely used credit scoring model. It pulls information from your credit report to generate your credit score, but you won’t get your first score from FICO until you’ve had an open account for at least six months. In other words, after two or three months of using your secured credit card, you’ll probably have a credit report, but not a FICO score. Although FICO dominates the credit scoring scene, there are other credit scoring models, such as VantageScore, that use different models to generate credit scores.

After six months or so, depending on the credit scoring model, you’ll be able to see your first credit score. Whether this score will be high or low depends on how consistently you’ve been using and paying off your secured credit card. It also depends on any other items on your credit report. For example, if you have other accounts that are past due or have been transferred to collections, your score will be lower than if you had only positive accounts. 

Improving Your First Score

Your credit score is based on several different factors. Your payment history is the most important component in calculating your score, so regularly paying your secured credit card bill is important. That said, even if your secured card activity has been exemplary, don’t expect your first credit score to be 850 (the highest possible score). 

Besides payment history and credit utilization, other things factor into your credit score, such as:

  • The length of your credit file: Six months of on-time payments on a secured card is good, but 24 months of on-time payments is better. Paying on time with multiple accounts for 24 months is even better.

  • The average age of your credit accounts: Keeping an open account in good standing for a long time leads to a higher credit score.

  • The diversity of your credit portfolio: Demonstrating that you have experience with different types of accounts, such as auto loans and credit cards, increases your score.

Unfortunately for credit beginners, there is no shortcut to excellent credit. If you continue to use credit wisely, make your payments on time, and avoid maxing out your spending limits, you’ll continue to see your credit score improve.

How to transition from secured to unsecured card

While a secured card is a great way to build credit, it's not an ideal long-term option since you have to deposit money to receive a credit limit. Eventually, you'll need an unsecured card that provides a bigger credit limit without a deposit.

The transition from secured card to unsecured card varies by card issuer. Some card issuers may perform periodic account reviews to evaluate whether you can be switched to an unsecured card. For the Discover it® Secured Credit Card, starting at seven months from account opening, Discover will automatically review your credit card account to see if they can transition you to an unsecured line of credit and return your deposit.

If your card issuer doesn't offer an automatic upgrade process, you can simply call the number on the back of your card and ask to be transitioned to an unsecured card. They may transition you to a similar card that doesn't require a security deposit. Be aware that a credit check may be performed.

Some card issuers may not offer a transition process, so that means you'll have to apply for an unsecured card and close your secured card account. Experts generally don't recommend closing credit cards, but secured cards are a bit different since you're required to put up collateral.

Before you close a secured card, make sure you apply for a new card and are approved. If you close your card before opening a new one, it may be more difficult to be approved.

Never had a credit card before? Here's the best starter card for your wallet

Information about the Capital One Platinum Secured Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

For rates and fees of the Discover it® Secured Credit Card, click here.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


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