can't get approved for a credit card and looking to build credit? Use a secured credit card to build credit and increase your credit score.
Personal Finance

Can’t Get Approved for a Credit Card? Try a Secured Credit Card (updated 2019)

If you can’t get an approved for a credit card, it is likely due to the fact that your credit score is either non-existent or very low.  The quickest way to increase your credit score, even if you do not currently have a credit card is by becoming an authorized user.  If you don’t have a close friend or family member with a strong credit profile and not willing to add you as an authorized user, you’re still in luck, there are other methods to build your credit score.

This post is for educational purposes only, please speak with a financial advisor for any financial advice! Read my full disclosure policy.

Start Building Your Credit Score with a Secured Credit Card

Alternatively, to become an authorized user, arguably the quickest way to increase your credit score, you can apply for a secured credit card.  Now a secured credit card will not increase your credit score as quickly as becoming an authorized user, but if your goal is to build credit and you cannot get approved for a normal credit card then this is your best option.

What is a secured credit card?

A secured credit card is a credit card that it is secured by your bank account.  For example, say you have $2,000 in your savings account which you can deposit that into your secured credit-card bank account.  Your secured credit card’s limit is now $2,000.  The credit card limit can match the total amount you deposit (depending on the credit card issuer) which will ensure you don’t spend more than you can afford.

This is a great financial tool when learning how to manage your money and finances and good practice when you move up to real credit cards with bank lended credit limits.

In the post, Use a Credit Card Instead of Your Debit Card, I focus on the practice of pretending your credit cards are your debit cards and not spend more than you can afford.

What is the difference between a normal credit card and a secured credit card?

It’s relatively simple, but a secured credit card does not have all of the bells and whistles as typical cash back or travel rewards credit card, but the important goal here is to build credit not earn cash back or points.

A credit card gives you an available line of credit that the bank controls and is not secured by any money in a checking or savings account.  A secured credit card’s credit limit is dependent on how much money you have and willing to secure with the secured credit card company.

Where do you find secure credit cards?

The same locations you find credit cards, most banks offer secure credit cards to individuals looking to build their credit.

This post contains some affiliate links for your convenience (which means if you make a purchase after clicking a link I will earn a small commission but it won’t cost you a penny more)! Read my full disclosure policy

Here’s a great list of secured credit cards available to you, via credit karma.


Building credit and increasing your credit score is essential to saving thousands of dollars over a period of time. In recent posts, Building Credit, and Expedite Your Loan or Mortgage, I discuss how critical a 1% difference on a loan interest rate is and how it can cost you hundreds of dollars.

  • With a secure credit-card, you can start building credit immediately, which will greatly pay off when it’s time to apply for a mortgage and you have a strong credit score.

This is recommended for folks who are not able to obtain a credit card but want to start building credit.  Also, if you fear the idea of having credit limit, or simply want to learn how to better manage/leverage your money, a secured credit card can work for you.

Make sure you read our posts on Credit Card Best Practices and Building Credit posts to help build your credit as quickly as possible.  Remember, the sooner you start building credit, the better you are in the long run when applying for loans, mortgages, and the more money you will save.

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