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Top 7 Secured Credit Cards in Canada for Jan 2023

A poor or bad credit score makes it unlikely that you will easily qualify for a regular credit card.

While you may want to avoid credit cards if you tend to misuse them and overspend, paradoxically, a credit card or other credit facility is required to help you rebuild your credit rating.

Borrowers with bad credit are not without options. There are secured and unsecured credit cards you can qualify for depending on your financial history, credit score, and ability to put down a deposit that serves as collateral.

This post covers the best secured credit cards you can apply for in Canada, including the Neo Secured Card, Plastk Secured Credit Card, and Home Trust Secured Visa.

Best Secured Credit Cards in Canada

These are the top secured and guaranteed approval credit cards available to Canadians.

1. Neo Financial Secured Mastercard

  • Annual fee: $0
  • Cash back rewards: Up to 5% cash back
  • Interest rate: 19.99% – 24.99% on purchases; 21.99% – 26.99% on cash advances
  • Security deposit: starts at $50
  • Credit limit: Dependent on your security deposit

The Neo Secured Card is the best secured credit card in Canada.

It doubles up as a cash back credit card, offering up to 5% unlimited real cash back when you shop at thousands of stores across Canada.

If you are looking for a no-fee secured card, this is it.

Even better, approval for this card is guaranteed, and you only need $50 to get started on your way to growing your credit score.

Neo Financial customers can access a free app and a virtual card they can add to their favourite payment wallets.

And you can redeem cash back earnings towards your statement balance at any time. Learn more about what it offers in this review.

Neo Secured Mastercard

Rewards: Get an average of 5% cash back at 7,000+ locations.

Welcome offer: 15% welcome bonus cash back on your first purchases; $25 cash bonus.

Interest rates: 19.99% – 24.99% for purchases.

Annual fee: $0

2. Home Trust Secured No-Fee Visa

  • Annual fee: $0
  • Interest rate: 19.99% purchases and cash advances
  • Security deposit: $500 – $10,000
  • Credit limit: $500 – $10,000

The Home Trust Secured No-Fee Visa is a no-fee secured credit card with an approval rate above 95%.

If you are looking for a credit card that can help you repair or rebuild your credit, this card works, and approval is almost guaranteed unless you are currently in bankruptcy.

Home Trust Secured Visa

Rewards: Earn points you can redeem for cash.

Interest rates: 14.90% on purchases; 19.80% on cash advances.

Annual fee: $59.

Credit limit: $500 to $10,000.

Credit score required: Poor or bad credit score.

3. Plastk Secured Visa* Credit Card

  • Annual fee: $48 plus a $6 monthly maintenance fee
  • Interest rate: 17.99% on purchases; 21.99% on cash advances
  • Security deposit: $300 – $10,000
  • Credit limit: $300 – $10,000

The Plastk Secured Visa* Credit Card is designed with credit building in mind and offers some other unique perks, including:

  • Free access to your credit score every month
  • Rewards points on everyday purchases
  • Welcome bonus of 6,250 points ($25 value)
  • 0% APR on purchases for the first 3 months

The card also comes with a versatile mobile app that’s available on iPhone and Android devices.

To qualify, you must have reached the age of the majority in your province or territory, and be able to provide a security deposit.

There’s also a Plastk Secured Credit Card that’s designed for students to help them build their credit scores.

Get more details about the card in this review.

Plastk Secured Credit Card

Rewards: Earn points you can redeem for cash.

Welcome offer: 5,000 bonus points ($20 value) and 0% APR for 3 months.

Interest rates: 17.99% on purchases; 21.99% on cash advances.

Annual fee: $48, plus a $6 monthly maintenance fee.

Credit limit: $300 to $10,000.

Credit score required: Poor or bad credit score.

4. KOHO Prepaid Mastercard

  • Annual fee: $0 ($10/month for Credit Building)
  • Interest rate: 0%
  • Security deposit: N/A
  • Credit limit: N/A

The KOHO Prepaid Mastercard is a reloadable prepaid card you can use to build your credit history if you subscribe to its credit-building add-on.

This card does not require a security deposit, so you can add any funds you want. The main thing is to ensure you pay the monthly fee for credit building which is up to $10, depending on your KOHO account type.

This monthly fee is reported to a credit bureau and can help improve your credit score. This KOHO Card also offers up to 10% cash back on purchases.

KOHO Prepaid Mastercard

Rewards: Earn 1% cash back on groceries and bill payments; Up to 5% cashback at select partners; Earn interest on your balance*.

Welcome offer: Get a $20 bonus when you load and make your first purchase (use promo code CASHBACK during sign-up).

Interest rate fee: 0%

Annual fee: $0

5. Home Trust Secured Visa

  • Annual fee: $59
  • Interest rate: 14.90% purchases, 19.80% cash advances
  • Security deposit: $500 – $10,000
  • Credit limit: $500 – $10,000

The Home Trust Secured Visa annual fee card is different from its no-fee counterpart in that it offers a lower interest rate of 14.90% on purchases.

You can be approved for a credit limit as high as $10,000, and approval rates exceed 95%.

Home Trust Secured Visa

6. Capital One Guaranteed Secured Mastercard

  • Annual fee: $59
  • Interest rate: 19.80% purchase AIR
  • Security deposit: $75 – $300
  • Credit limit: $300 – $2,500

The Capital One Guaranteed Secured Mastercard is one of the easiest secured credit cards to qualify for in Canada as long as you:

  • Are at least the age of the majority in your province or territory of residence
  • Have not applied for a Capital One account more than once in the last 30 days
  • Don’t have an existing Capital One application
  • Can provide the required security deposit

This card allows you to increase your credit limit to $2,500 if you can provide the collateral.

capital one secured credit card

7. Scotiabank Value Visa

  • Annual fee: $29
  • Interest rate: 12.99% purchases (0% promo rate for balance transfers for 6 months)
  • Credit limit: Minimum of $500

If you have a fair or better credit score or are a newcomer to Canada, the Scotiabank Value Visa is worth checking out.

It offers a lower interest rate of 12.99% on purchases and cash advances, and you can also take advantage of the promotional 0.99% balance transfer rate for 6 months.

This card also offers up to a 25% discount when you use it to pay for car rentals at participating Avis or Budget locations.

Learn more about the card in our review.

Scotiabank Value Visa Card

Rewards: Save up to 25% off car rental rates at AVIS and Budget car rental locations.

Welcome offer: 0% balance transfer for 6 months; the annual fee is waived in the first year.

Interest rates: 12.99% on purchases and cash advances.

Annual fee: $29

Methodology:
Savvy New Canadians rates the best credit cards based on their annual fees, interest rates, welcome bonuses, rewards, top features, categories, insurance coverage, and other perks. We carefully evaluate each credit card and place more weight on the value of the long-term rewards it offers. Only credit cards we would personally use are recommended. Visit the credit card issuer’s website using the links to confirm each product’s terms and conditions before applying.

Best Secured Credit Cards in Canada Summary

Credit cardAnnual feeInterest rateSecurity depositCredit limit
Neo Financial Secured Mastercard$019.99% – 24.99% on purchases; 21.99% – 26.99% on cash advances$50 or moreDependent on security deposit
Home Trust Secured No-Fee Visa$019.99% on purchases and cash advances$500 – $10,000Dependent on security deposit
Plastk Secured Visa* Credit Card$48 + $6 monthly maintenance fee17.99% on purchases; 21.99% on cash advances$300 – $10,000Dependent on security deposit
KOHO Prepaid MastercardUp to $10/month0%N/AN/A
Scotiabank Value Visa$2912.99% on purchasesN/AMinimum of $500
Home Trust Secured Visa$5914.90% on purchases; 19.80% on cash advances$500 – $10,000Dependent on security deposit
Capital One Guaranteed Secured Mastercard$5919.80% on purchases; 21.90% on cash advances$75 – $300$300 – $2,500

What is a Secured Credit Card?

A secured credit card is different from a traditional credit card in that you are required to provide a security deposit (or collateral) to protect the lender if you default on your payments.

This refundable deposit is held in a savings account and is typically equal to your credit limit.

Secured credit cards are not only suitable for people who are trying to repair their credit scores. In some cases, individuals without a credit history (e.g. newcomers to Canada and foreign students) may also use them to build or establish a credit rating.

My first credit card in Canada as a student was a secured credit card from RBC. If you are a permanent resident, you can usually qualify for a regular credit card.

A poor credit score is 650 and below. If you do not know what your credit score is, you can find out here for free.

How Do Secured Credit Cards Work?

Other than the fact that you will need to put down a deposit, a secured credit card is very similar to a standard credit card.

The card issuer reports your credit activity to the credit bureaus, which will raise your credit score if you pay your balance in full and on time each month.

Usually, your security deposit will match your credit limit. The minimum security deposit is typically around $300 to $500, but some credit cards, like the Neo Financial Secured Mastercard, allow you to deposit anything over $50. 

Most secured credit cards do not offer rewards or extra perks, as the main aspect of the card is to build your credit.

Some credit card companies allow you to switch to an unsecured credit card if you consistently pay off your balance on time each month. 

Others do not have this feature, so you’ll have to apply for another credit card, then close the secured card. Upon closing, your security deposit is returned to you. 

The other credit card types you can take a look at if you are trying to pay off your credit card debt or consolidate it are:

Unsecured credit cards: You won’t have to put down a deposit; however, your credit score has to be at least in the fair to good category. An example is the Scotiabank Value Visa.

Balance transfer credit cards: These cards allow you to consolidate your credit card debt on one card at a lower interest rate. Here are the top balance transfer cards in Canada.

Low-Interest rate credit cards: These cards offer a lower purchase and/or balance transfer AIR and are great for saving on interest fees.

Prepaid credit cards: These cards do not impact your credit score; however, they provide many of the conveniences that come with regular credit cards and are widely accepted for payments and other transactions. Read more about them here.

Secured vs Unsecured Credit Cards 

Secured credit cards are easy to apply for, even if your credit score is not great. They require a security deposit, typically between $200 to $500. This deposit is typically your credit limit, and it is a form of collateral in case you cannot pay off your credit card balance. 

Like unsecured credit cards, secured cards build your credit by reporting your monthly payments to the credit bureaus. To raise your credit score the fastest, you should keep your balance below 30% of your total credit limit and pay it off in full each month. 

When you close your secured credit card, the security deposit is returned to you. Depending on the bank, you may have the option to upgrade to an unsecured credit card. 

Unsecured credit cards have more features and benefits than secured credit cards.

You need a good to excellent credit score (at least 660) to qualify for most unsecured credit cards. Sometimes, your personal or household income will need to reach a certain threshold to qualify. 

How To Apply For a Secured Credit Card

Almost everyone is eligible for a secured credit card, no matter their annual income or credit score. These credit cards are meant for those new to the country, students, or those looking to increase their credit scores. 

Generally, you will need to be a Canadian resident, the age of majority in your province or territory, and provide a security deposit to activate the credit card (typically around $200 to $500). 

Banks That Offer Secured Credit Cards

Here’s an overview of the banks and online financial institutions in Canada that offer secured credit cards:

BankCredit card
Neo FinancialNeo Financial Secured Mastercard
PlastkPlastk Secured Visa* Credit Card
Home TrustHome Trust Secured No-Fee Visa, Home Trust Secured Visa
Capital OneCapital One Guaranteed Secured Mastercard
Refresh FinancialRefresh Financial Secured Credit Card

Advantages of Secured Credit Cards

Secured credit cards are easy to apply for, and they are one of the best ways to improve your credit score quickly. Most financial institutions will accept your application, no matter your credit history or annual income. 

In most cases, the security deposit for a secured credit card is your credit limit, which means you’ll be less likely to overspend. 

It is rare, but some secured cards, like the Neo Financial Secured Mastercard, offer cash back or other rewards. 

Disadvantages of Secured Credit Cards

Secured credit cards require a security deposit, typically from $200 to $500. If you don’t have that money right away, you cannot open a secured card. 

Most times, your credit limit is your security deposit. This is different from an unsecured credit card in that you cannot spend more than you have already deposited. 

You need to ensure that you can pay off your balance in full each month. If you don’t, your credit score will not improve as quickly. There may be no point in getting a secured credit card if you tend to carry a balance. 

Lastly, secured credit cards do not offer many benefits or perks that unsecured credit cards do. You generally cannot collect points, cash back, or other rewards.

Conclusion

A secured credit card only serves its purpose of helping you establish, rebuild or repair your credit rating if you use it responsibly.

Plan to pay your balance fully and on time within the grace period. After your credit score has improved, you can easily apply for a standard credit card and withdraw the deposit you give to the bank.

If what you are looking for is a bad credit personal loan, click here for options.

You can also apply for a prepaid credit card with a credit-building service. The best prepaid card in this category is the KOHO Prepaid Mastercard.

Best Secured Credit Cards in Canada FAQs

Do secured credit cards build credit?

Yes, a secured credit card can help increase your credit score like a regular credit card. The credit card company reports your credit history to the credit bureaus, and if you are making payments on time and using your card responsibly, a secured card can be great for building and rebuilding credit.

What is the best secured credit card in Canada?

The top secured credit card in Canada is the Neo Financial Secured Credit Card. This secured credit card has no annual fees, and users earn cash back when they make purchases.

What banks offer secured credit cards in Canada?

Secured credit cards are not commonly offered or advertised by Canada’s largest banks. That said, you may qualify for one if you apply for a credit card and do not have a sufficient credit history. You can learn about the secured credit cards offered by RBC, BMO, TD, and CIBC.

Can I put $1,000 on a secured credit card?

Yes, you can deposit $500, $1,000, or more as security funds for your secured credit card. Your security deposits determine your credit limit.

How quickly will a secured card build credit?

Typically, it takes 2 months or longer after you start using a secured credit card to start increasing your credit score. This is provided you do not max out the card and pay your balance in full each month. 

Do secured cards hurt your credit?

Secured credit cards should not hurt your credit. Ensure you pay your balance in full when you’re supposed to, and your credit should be improved, not hurt. Also, some issuers do not perform a hard credit check when you apply for a secured card.

How long does it take to build credit from 600 to 700?

There are several different things to take into account when trying to increase your credit score from 600 to 700. Are you building your credit score for the first time? Do you have negative items on your credit report? It depends, but it usually takes around 3 months for your credit score to bounce back after you close a credit account or have missed a payment.

Best Credit Offers in January 2023

Earn up to 5% cash back at over 10,000 retail locations ($25 Bonus)

Get a $25 bonus when you are approved for the Card.

No annual account fees.

Earn up to 5% unlimited cash back at 10,000+ participating stores.

Guaranteed instant approval credit card.

Get up to 5% cashback and grow your savings ($20 bonus)

Best free prepaid reloadable Mastercard plus a $20 welcome bonus.

Free budgeting app with automatic savings features.

Increase your credit score with optional credit building add-on.

Earn up to 2.00% interest on your entire balance.*

Get one of the no-fee cash back credit cards in Canada ($150 bonus)

Earn 2% unlimited cash back in up to 3 spending categories.

Get a $150 welcome bonus after spending $1,000 in the first two months.

1.95% low-rate balance transfer, airport lounge access, and insurance benefits.

No annual fees to use the card and cashback is paid out monthly.

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Author

Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

3 thoughts on “Top 7 Secured Credit Cards in Canada for Jan 2023”

  1. Gravatar for jamesca

    I would also encourage others to speak with their credit union. My local credit union, Vancity, offers all of their Visa cards in secured versions. If you’re a BC resident, I highly recommend looking into their no-fee Enviro Visa Classic. It provides 0.5% cashback, extended warranty and lets you keep the deposit in an interest-bearing GIC or savings account.

  2. Gravatar for Tina

    The Scotiabank Value Visa Secured Card was discontinued over a year ago.

    • Gravatar for Enoch Omololu

      @Tina: I believe you are referring to the “Scotiabank No-Fee Value Visa Card”.

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