Credit building
If you're new to credit, your credit card options might be limited. However, a secured credit card is an excellent option to help you build your credit from the ground up.
Secured credit cards are designed for individuals new to credit or with limited credit history, like students, recent graduates, immigrants, or those rebuilding credit. This often means they don’t require a traditional credit check or a specific credit score for approval, which makes them easier to get. If you don’t meet the criteria for a traditional credit card, a secured card can also help you rent a car, book a hotel, or make any other transactions that require a credit card. Plus, using your secured card regularly can help you build and improve your credit over time.
A secured credit card is a type of credit card that requires a refundable cash security deposit, which directly sets the card's credit limit. Unlike traditional credit cards, where the limit depends on creditworthiness and income, a secured card's credit limit is usually the same amount as the cash security deposit. For instance, a $100 deposit will give you a $100 credit limit.
If a secured credit card sounds like the right choice for you, follow these five steps to apply:
Because secured credit cards require an upfront cash security deposit, assessing your finances before applying is crucial. If you need help deciding how much to put down, starting with a smaller deposit, like a couple hundred dollars, is always a good approach. As you build confidence, you can add more to your deposit to increase your credit limit over time.
After determining your budget, research various secured cards to pinpoint which features matter most to you. When selecting the right card, compare deposit requirements, fees, interest rates (APRs), rewards, and potential upgrade paths. To get started, you can contrast card features like those highlighted on our homepage.
Once you’ve narrowed down your options, it’s time to choose a card. We recommend selecting a card that doesn’t require a credit check. A credit check can decrease your likelihood of approval. It could even have a potential impact on your credit score if checked during the application process. Ensure the card company reports your credit activity to all three major credit bureaus (Equifax, Experian, and TransUnion). If you're an immigrant, verify your eligibility to apply.
If you’re considering opening a secured credit card with OpenSky, all three of our options feature an 89% approval rate1 and do not require a credit check. See which one best suits your needs.
Many card issuers allow applicants to apply online in minutes. When filling out your application, have this information on hand:
Keep in mind that, in addition to the cash security deposit, additional fees, such as application, processing, or annual fees, may be required to open your account. You can pay these with a debit card, so make sure you have enough funds to cover the total amount owed.
Once you’re approved and your card is activated, using it responsibly can help you build a strong credit history and boost your credit score. Here are the actions you can take to set yourself up for success.
1. Make small purchases every month
Using your secured card regularly and paying off the balance on time is critical to building your credit. To establish your credit history, start with small purchases, such as paying for a monthly streaming service subscription.
2. Keep your credit utilization low
Your credit utilization ratio is the percentage of available credit you currently use. Aim to use 30% of your available credit limit at most. This shows lenders that you can stay on top of your spending, which can help raise your credit score.
3. Pay on time
Always pay your credit card bill on or before the due date to avoid late fees and negative marks on your credit report.
4. If you can, pay your balance in full
Carrying a balance on your card can increase your credit utilization ratio, which might lower your credit score. If you can't pay your bill in full each month, try to make the minimum monthly payment and pay down the balance as quickly as possible.
If you're a beginner with no credit score, secured cards are a great tool for building credit and showing responsible credit use. After establishing and growing credit, more credit options can become available. Now is the time to start.
Pamela Kohl is the Vice President of Marketing at OpenSky. With over 25 years experience in financial services, Pamela has worked closely with banks, alternative finance, and other fintech platforms to develop core banking services, as well as establish new card programs, lending programs, and global payments platforms. She has been nationally recognized for creating innovative solutions, leveraging new markets, and developing winning strategic partnerships. Pamela earned a B.A. from Marshall University, summa cum laude, and M.A. in International Economics from the University of Miami, where she graduated with Distinction.
1 Based on Q1 2024, OpenSky Secured Visa® Credit Card average approval rate is 89.35%. Individual approval results may vary.