When it comes to considering secured credit cards in Canada, you have quite an array of options to choose from. They come with different interest rates, annual fees, rewards, benefits, and minimum deposits. Here are some factors to consider regarding guaranteed credit cards, and a side-by-side comparison of Canada’s top ten!
What is a Secured Credit Card?
A secured, or guaranteed, credit card works on the same principle as a secured loan. With a secured loan, the lender has some tangible guarantee (like a home or car) that can be taken as collateral if the borrower should default on the loan. That’s why mortgage companies and lenders are willing to loan out large sums of money to people—because they know they’ll get either the money (and interest) in payment, or else they’ll get the property that was put up to secure the loan.
In the case of a secured credit card, the collateral is a sum of money you deposit when you are issued the card. The lender can be confident that you’re not a risk, because they already have your money in hand.
What Are Secured Credit Cards Good For?
So why even get a secured card? If you have the cash-in-hand sufficient for a deposit, you could just use your cash, right? Well, maybe not. You can’t use cash to purchase merchandise online, to make reservations, or even to pay some bills. Where a check or credit card is required, you’ll be out of luck if you don’t have a bank account or a card.
If your poor credit prevents you from qualifying for a regular credit card, or if you don’t yet have a credit history in Canada, you can still enjoy the convenience of paying for goods and services that require credit cards. You can also use that card to build (or rebuild) that credit score so you qualify for bigger things in the future.
Rebuilding Your Credit with a Secured Credit Card
If you’re looking to repair your credit rating, a secured credit card is one of the best tools at your disposal. You might think it’s wiser to “play it safe” and use cash, but that actually hurts your credit score. You actually need credit transactions in order to build up your score, so it’s important to use your secured card with intentional care.
Make sure that you make all your payments on time. That’s the number one thing you can do to repair your credit. A late payment of even a few days will undo a lot of your work toward credit repair. After a period of time making punctual payments, however, you will see your credit score improving visibly.
Top Canadian secured credit cards
Refresh Secured Card
* Annual fee: $12.95
* Interest: 17.99%
* Maintenance fee: $3/month
* Credit limit: $200 – $10,000
This Secured Card from Refresh is easy to get and is a great option for people with less than perfect credit. It’s important to mention that no credit check is required to get approved. Clients are asked to provide personal information, email, choose a credit pack that matches their needs, and provide government issued ID and banking details. They also have to provide security deposit of at least $200. The main benefit for users is that timely payments are reported to the credit bureaus and this ultimately helps rebuilding your credit. There are also helpful videos offering financial advice.
Neo Secured Card
* Annual fee: $0
* Interest rates: 19.99%-24.99%
* Rewards: 1% minimum cashback, average 5% cashback at partners
This card is a great option for those who may have a lower credit score or are looking to begin their credit history. Neo guarantees immediate approval with no hard credit checks. The card requires a low security deposit of $50 with no monthly or annual fees, regardless of your current score or history. This means that you can start building your credit score quickly and with ease, even if you don’t want to spend a lot. Neo offers an average of 5% unlimited cashback2 at their thousands of partners. You can also get up to 15% cashback2 on your first purchase across participating partners, along with 1% cashback with all other purchases.
Peoples’ Trust Secured Credit Card
* Annual fee: $70
* Interest: 12.99% on purchases, 24.5% on cash advances
* Minimum required deposit: $500
The relatively low interest rate on this card makes it attractive to people who might be carrying a balance on the card. Applicants need to have a bank account and a verified income in order to apply for this card. This card charges a fee of $5 for cash advances, and a $5 fee if you overreach your credit limit. *Please note that this card is no longer available.
Home Trust Secured No Annual Fee Visa
* No annual fee
* Interest: 19.99%
* Minimum required deposit: $500
This card is ideal for people who expect to pay their balance in full every month. The interest rate is higher, compensating for the lack of annual fee, but this won’t affect you if you’re going to be paying your balance in full every month. The Home Trust card enables you to add another authorized user, and its credit limit may be as much as $10,000.
Home Trust Secured Low Interest Visa
* Annual fee $59
* Interest: 14.9%
* Minimum required deposit: $500
Of the two Home Trust cards, this version is preferable for people who might be carrying a balance from month to month, because the interest applied to that balance will be lower with this card. Applicants need to have a bank account in order to apply for this card.
Capital One Guaranteed Secured MasterCard
* Annual fee: $59
* Interest: 19.8%
* Minimum required deposit: $75
This easy to get credit card has one of the lowest minimum deposits, so it’s a good choice if you don’t have the $500 required by many of the other card companies. Its uses are less advantageous, since it has both an annual fee and a high interest rate, but it’s an option that’s open to you if you can’t afford the bigger deposit to get started.
Vancity Enviro Secured Visa
* No annual fee
* Interest: 19.5%
* Minimum required deposit: $500
Vancity offers a variety of extra perks, including insurance for travel accidents, price protection, and insurance for lost baggage. The card also has a system of reward-points for spending, called My Visa Reward Plus. The rewards include options like travel, redeeming for purchases, and charity donations.
The Vancity line of Classic credit cards includes several combinations of annual fee and interest rates, allowing you to choose the best solution for your situation. The options range from no annual fee and higher interest of 19.5% (for people who don’t plan to carry a balance) to a card with a $50 annual fee with lower interest of 11.25%.
Secured Credit Cards Offered by the Big 5 Canadian Banks
Secured cards are offered by all of the “Big Five” Canadian banks, and with relatively similar features. You will find that it’s difficult to uncover information on these cards online, and almost all of them require you to apply in person at the branch office.
You can inquire about details at the branch nearest you—and that’s not a bad thing. Although we’re accustomed these days to be able to do almost anything online, there’s something to be said for a face-to-face conversation with an expert who can talk to you about the pros and cons and details of the card for which you’re applying. So take the information below if it helps you to decide on which bank you’d like to visit, but know that any of these five banks will likely require you to apply in person.
Royal Bank of Canada (RBC) Secured Credit Card
* Annual fee $20
* Interest 11.99 on purchases & cash advances
* Minimum required deposit: $500
This low interest card with its modest annual fee is well suited for people who expect to be carrying a balance from month to month. Its optional extra features include travel insurance, roadside assistance, credit monitoring, and automatic payment options.
The RBC secured credit card charges fees of $3.50 for a cash advance ($5 if you’re out of the country) and an overlimit fee of $29 per statement period if your balance goes above your credit limit.
Bank of Montreal (BMO) Prepaid Credit Card
* Annual fee: $6.95
* No interest
The Bank of Montreal uses a prepaid model as its secured card option, meaning you can choose what amount you’d like to load to the card. It gives you more flexibility upfront (you don’t have the $500 minimum many other cards require) but doesn’t allow you to spend more money than you have on the card, or to take cash advances. The card itself operates much like a debit card, but without the associated checking account.
Toronto-Dominion (TD) Secured Credit Card
* Annual fee: $29
* Interest: 19.9%
* Minimum required deposit: $500
To apply for a Toronto-Dominion card, stop in at a TD branch office for an application. Your credit limit will be equal to whatever amount you are approved for, and deposit up front. If you maintain your TD secured credit card successfully for seven consecutive months, you can be eligible for an unsecured card as the next step toward repairing your credit.
Canadian Imperial Bank of Commerce (CIBC) Secured Credit Card
* Annual fee: $29
* Interest: 19.9%
* Minimum required deposit: $500
Like the TD card, you will need to apply in person for a CIBC secured credit card, by stopping in at a TD branch office for an application. Your credit limit will be equal to whatever amount you are approved for, and you make the deposit up front.
CIBC will give you a card for a specific term, usually two years. At the end of the two years they’ll refund your deposit—and by that time you will probably qualify for an unsecured card if you’ve used your secured card wisely.
Scotiabank Secured Credit Card
* No annual fee, no balance transfer fee
* Interest: 16.99%
* Minimum required deposit: $500
The no-fee Value Visa card is a great option if you’re looking to transfer balances from other credit cards. There’s no fee for balance transfer, and the introductory APR is a low 3.99 percent for the first six months. (That rate goes up to 16.99 percent after the introductory period, so try to pay off your balance before you hit the six-month mark.)
In Conclusion
Secured credit cards are the best way to improve your credit score, or to establish one if you are new to Canada and don’t have a financial history in this country. With your secured credit card you will enjoy all the benefits of credit card membership, like making purchases online and over the phone, or accessing cash from ATMs.
Your life will feel easier and your daily transactions will be smoother once you have a secured credit card at your disposal. Enjoy all the advantages of having a card, like being able to make reservations or purchase items online. And build your credit score as you go, by making sure to handle your card finances wisely.
Your secured credit card can serve as a stepping-stone to bigger things, like unsecured cards, car loans, or even a mortgage. Used wisely, the secured credit card is a gateway to your future. Let your credit score soar!
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2 See Merchant web site
I would like to try the Royal bank secured credit card but when I called they told me they don’t do it, could you help me please
I had also tried RBC, and they told me it was for newly arriving immigrants to Canada.
This RBC card may have been offered at one time. But not anymore to ANYONE.
What about Canadians?
Rbc does no issue a secured card….I just left there, either does CIBC
If you are in the Vancouver or Victoria area then Vancity does if you open a chequing account..I have $2,000 secured card…I love Vancity
I checked this RBC secured card out at my RBC bank. It does not exist. Credit Avenue should remove this card from their list. Sorry.
Dont apply at the banks secure credit cards, even as a secure card, they dont approve you,if, you dont meet their expectations of a good credit score.
So I am confused. It shows that the BANK OF MONTREAL (BMO) PREPAID CREDIT CARD, is one of the top ten, but yet I am certain it does nothing in regards to either improving or simply giving you a credit score if you don’t have any credit history. I’ve had this card for a year and a half now and my credit score is still non-existent even though I have continuously used it.
I am wondering what is the best no hassle, quick, simple and easy, secured credit card with NO ANNUAL FEE, would be to apply for to build a credit score?
Hi… get the Home Trust Secured Visa. I have one, and it’s the best.
is it guarantee approve if I apply under consumer proposal
I would love to know the answer as well
I have a same situation
Yes. You can apply and be approved in a Consumer proposal. You cannot if you’re in Bankruptcy.
You give them the money 500 bucks and up and the card lends you your money back when u pay on time more then the minimum balance etc your credit will go up you dont get credit limit from the company your limit is set by what you give them first before getting a card
Unfortunately, this card is not available for Quebec residents and it sucks. There are so many things related to financial stuff that is available throughout Canada but not in Quebec, it’s insane: banks, credit cards, referral programs, bonuses, special offers, points programs, promotions, perks, etc. Be happy you’re not living in the same province as I and appreciate the benefits. I wish I could easily move out of here.
In actuality, Quebec is doing this to protect you. Their consumer protection laws make Quebec residence ineligable for many contests, products, etc but that is because they are ones that can cause financial hardship if mismanaged. In Quebec there are higher monthly minimum payment rates so that the interest does not consume those who would otherwise carry a large balance. Any credit cards that do not align with the laws in the consumer protectin act cannot be made available to Quebec residence.
I have heard some really poor reviews about them..please explain ur experience with them
I did an online application and they are asking weird questions like politically exposed person and said my employment information is incorrect. There’s no way to directly reach the representative in-charge of credit card applications .
Try RBC’s no fee cashback MC: https://www.rbcroyalbank.com/credit-cards/cash-back/rbc-cashback-mastercard.html
It gives 2% back on groceries and 0.5%-1% back on everything else, plus 3c off fuel at Petro Canada.
As explained above, I think you do need to apply for the secured version in branch. That’s what I did anyway. They start you off with a credit limit equal to whatever you deposit in a non-redeemable GIC.
Capital one would be the best secure credit card to improve your credit score. The deposit is from 75$-300$. After 7 months of full , ontime payment you can ask for an increase
Prepay credit cards do not get reported to Equifax or Transunion. They are used more for the perks that some prepaid cards offer. But that is as far as it goes. Look for credit cards that say secure and next time to be sure, I would try calling these credit card companies and ask “who do you report to?” they will usually tell you to whom and how often’
Hi, I had Home Trust in year 2001 until 2004 . They do report to Equifax Canada, after my credit score went up and the banks send me pre approved credit cards. So they do send your ratting to Equifax Canada.
Prepaid cards of any Bank do not report credit worthiness, because it is prepaid. It is not the same as secured. I have had both . Prepaid a complete waste of time if you wish to improve or build credit. I got a Secured card from Refresh Financial and within a year knocked up my credit score by 200 points. Truth. They are worth it. $300 buck deposit that is it
peoples trust credit card is no longer available should remove from your site
Thanks Rachel,
I’ll update the article later today.
Needed to add Refresh Financial
big banks no longer offer secured credit cards. I stopped at branch of CIBC, RBC, BMO, Scotia, National Bank, TD. All confirmed. RBC only offer secured card to New Immigrants.
TD, Scotia, National bank offer Secured Card as long as collections paid off, no bankruptcy, no proposal.
Apply for National Bank CC online, once you receive declined letter on the mail take it to local national bank branch ask to set up secured card.
TD and Scotia need to apply at branch and ask to provide security deposit once approved. This usually takes two to four weeks.
BMO prepaid cards. No credit check, nothing get reported to credit bureaus. Useless if you are planing on building credit. Rental car companies don’t accept this card.
CIBC and RBC don’t offer cards to Canadians. Only new comers.
I hope it helps.
Get the Refresh Financial Card. I rented a car with this one no problem but you will
need to have at least a $500 limit cause they need a $200 deposit plus the cost of the
car rental when you pick it up. This was at Enterprise Rent A car.
Actually both TD and HSBC both offer a secured card at a Dollar deposit to Dollar credit limit.
Scotia offers it at a 120% deposit rate. A $600 minimum gets you $500 line of credit. I also have been told National will do them also.
Home Trust is still going, Van City still offers the secured credit card. Scotia, a month ago deleted their secured credit card program and that pissed off a lot of customers who were involved in the program (that’s according to the lady at Scotia who talked to me about). Makes me wonder if this secured credit card program will be abolished by all banks, then what?
Just got off the phone with CIBC and as of January 2019, they no longer offer a secured credit card.
I have tried to National bank, and I still don’t understand even with a safe deposit, and provided all my story of consumer proposal, and they refused after 2 days of investigation. Wow why ? My advice, don’t go in any banks. I use to have Peoples trust and it was perfect. So bad they don’t take new clients.
Same thing happened to me when I had applied with NBC. Not a good option to try unless you are ok to waste time and energy.
Capital one is the best and the easiest one. My score is going up with that for sure!
Had used for car rentals, hotel bookings, online shopping etc. Also, Some online merchants or subscriptions do not accept prepaid visa or master cards And this card works for that too!
It works Just like a regular MasterCard credit card – it’s just you and capital one Who knows about the secured funds.
Also, once your score goes up with this- better chances of getting other kind of cards I guess!
Refresh financial is not here only because they require a minimum of $1000 deposit. Their customer service is the worse of the worse. The man I spoke with didnt seem like he wanted to help me at all. I felt I was being judged.
NO, they require $200.00 or $500.00 and $1000.00 increments.
I know I just did this today, and they are backed up so takes 2 weeks roughly to get a card, and each year points go up 40-80 points in credit bureaus, and the no payout loan, I took the 1250.00 option, payments 46 and change three, years pull out anytime you want minus 19.99 percent which is around 400 they take, but your score goes up 100-130 a year with this, as it’s reported monthly as a Loan Payment, and in the end, you take your 900 for yourself or pay off a debt or extend credit on secured visa, or by then have banks offering you cards, I don’t believe they extend credit on your cards as you go along well which capitol one does, and Banks with 600 plus credit do, but you won’t need that after one year of a loan aka savings and paid secured card which you can add 200 to start and keep adding more to your limit if you like, it’s really how you look at it and card rates are lowest in Canada.
This above is regarding refresh financial^^^
Refresh Financial should be added to this list!
When diagnosed with cancer in 2016 I had to do a proposal to creditors and my credit score was the worse from then on. The proposal has been paid in full now and i need to get my credit score up once again. The bank I deal with is the Royal bank and the person there said to me they do not do secured credit cards and now after reading here today see that the big banks say they do but this is not so as I read the comments. When you need the banks to help you it seems they are not there for you. If I did not have to deal with them I would not. And it is these banks that are making so much money!!!
I wish I did not apply with “Refresh Financial” for a secured credit card program. I didn’t get the credit card offered but instead the “Credit Rebuilding” program.
It helped marginally and it was impossible to reach anyone for help or questions.
I am glad I decided to get credit card with Capital One. After a 3 to 4 years I was able to apply for a car load with a major bank.
Plus a financial adviser helped me budget my money wisely until I could on my own.
Hello
For those of you in proposal or who have finished proposal did it take you 5 years from proposal date or 6 years to have it dropped from your beaureau. How soon can you start rebuilding credit if in proposal
It is 6 years after start of proposal to have taken off your proposal or 3 years after you have finished your payments on the proposal. Whichever is earliest.
Capital One is always guaranteed!! Fast. No hassles. Very simple. I went to TD bank and they said they need a credit score of 600 with everything paid off. Home trust is good also.
Capital One MasterCard is always guaranteed. I haven’t seen them reject anyone. Fast and easy. Home Trust is a good card too! TD will give a secured card with 600 credit score and basically no debt. Everything paid off
I see you’ve added Refresh card!
i know one car used to exist and might still exist NBC national bank in ontario and quebec
i had to put down $450 secured to get a CC worth $150 to fix my Credit and after one year i had access to my $450