Best Secured Credit Cards in Canada For 2024
Abid Salahi
Author5 min read
Whenever you want to build or rebuild your credit score, secured credit cards are one of the best options. Although putting down a deposit is not pleasant, in the meantime, until you are able to get an unsecured one, choosing the right secured card will save you a lot in annual fees and may even earn you some rewards.
In this post, we will go through the best secured credit cards in Canada and help you choose the one that is best for you.
Best Overall Secured Credit Card in Canada
Neo Secured Mastercard®
4.5
Finly Rating
Welcome Bonus
N/A
Annual Fee
$60
Interest Rates
19.99% - 29.99% (for Quebec 19.99% - 24.99%) / 22.99% - 31.99% (for Quebec 22.99% - 25.99%)
Why we like it
Why we like it
If you have a poor credit score and are looking to rebuild it with a secured card, then the Neo Financial Secured Credit Card is the best card to go for. This card offers so much more compared to other secured credit cards on the market, including no monthly fees, a low deposit amount needed to get started, and it is the only credit card that offers some rewards on your purchases!
Pros & Cons
Pros & Cons
Pros
Cons
Product Details
Product Details
Rewards
Benefits
Details
Neo Premium ($4.99/month)
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Neo Travel Benefits ($4.99/month)
Neo Food Cashback boost ($1.99/month)
Neo Mind and Body Perks ($9.99/month)
Eligibility
Credit Score
PoorAnnual Income
N/A
The Neo Secured card is our top choice for the best secured credit card in Canada. A few things distinguish this card from others, as it’s the only one that is very similar to unsecured cards. In fact, it’s exactly like the non-secured version of the card, with the small difference of an annual fee, but otherwise, the benefits and rewards are the same. The rewards earned on this card will, for most people, more than cover the annual fee. Additionally, the required deposit amount is very minimal.
Best No Fee Secured Credit Card in Canada
Capital One Secured Mastercard
4
Finly Rating
Welcome Bonus
N/A
Rewards Rate
No Rewards
Annual Fee
$0
Interest Rates
21.9% - 29.99% / 21.9% - 29.99%
Why we like it
Why we like it
Secured cards typically come with no rewards or benefits, even the ones with annual fees. This card has broken the norm and provides many great benefits to secured cardholders without any fees. So, if you are looking to get benefits with a secured card, this card is your best choice.
Pros & Cons
Pros & Cons
Pros
- No Annual fees
- Great list of benefits for a card with no annual fee, especially the price protection benefit, which is not offered by many other credit cards.
Cons
No rewards earned on purchases
Product Details
Product Details
Rewards
No Rewards on this card
Insurance
Coverage
Travel Accident
$250,000
Baggage Delay
$100/day up to 3 days.svg)
Car Rental Damage & Theft
Up to 31 days
Purchase Protection
120 days
Extended Warranty
double up to 2 years
Benefits
Details
Price Protection
60 days, Up to $100 per item, $500 per year
Eligibility
Credit Score
PoorAnnual Income
N/A
If you want to avoid paying any fees, then the Capital One card is your best choice. The best thing about this card is that, even though it has no annual fees, it provides many premium benefits such as price protection, etc. The only downside of this card is that you don't earn rewards on your purchases.
Honourable Secured Credit Card mentions
There aren't many secured credit cards available in Canada, therefore let's explore all the remaining ones just in case you might think they would be a better match for you.
Home Trust Secured Visa
3
Finly Rating
Welcome Bonus
N/A
Rewards Rate
No Rewards
Annual Fee
$0
Interest Rates
19.99%, option to pay $59 Annual fee for %14.90 / 19.99%, option to pay $59 Annual fee for %14.90
Why we like it
Why we like it
Although there are other better secured credit card options available in Canada, this card is the only no-fee secured credit card option, making it the choice for those who want to avoid fees.
Pros & Cons
Pros & Cons
Pros
- No Annual Fee required
Cons
- No rewards earned on purchases
- No benefits provided by the card
Product Details
Product Details
Rewards
No Rewards
Eligibility
Credit Score
PoorAnnual Income
N/A
Although this card offers the option to pay no annual fees (or the option to pay a fee but get a higher interest rate), it provides no benefits or rewards. Therefore, it is a worse option than the cards previously discussed because it would be better to have at least one of the two, rather than none.
Neo Cathay World Elite® Mastercard® Secured
3.6
Finly Rating
Welcome Bonus
Up to 30,000 Asia Miles and 10% off flights (limited time)
Annual Fee
$180
Interest Rates
19.99% - 26.99% / 22.99% - 28.99%
Why we like it
Why we like it
The Cathay World Elite Mastercard is a top choice for frequent travelers to Asia, offering up to 30,000 bonus Asia Miles, high earn rates at Neo retail partners, and exclusive Cathay Pacific benefits like priority check-in and lounge access. With 12 types of insurance coverage, airport lounge access through DragonPass, and the ability to earn up to 15 miles per dollar spent at select partners, this card provides substantial value for those who regularly fly with Cathay Pacific and its partners. However, the card does require a higher income and comes with a $180 annual fee.
Pros & Cons
Pros & Cons
Pros
- Guaranteed Approval: The card is the same as regular but you’ll get guaranteed approval with a security deposit of at least $200 to open an account. No credit history required.
- Generous Bonus: Earn up to 30,000 bonus Asia Miles.
- High Earn Rates: Get an average of 5 miles, and up to 15 miles per $1 spent at Neo retail partners.
- Cathay Pacific Perks: Enjoy several exclusive benefits with Cathay Pacific.
- Comprehensive Insurance: Comes with 12 types of insurance coverage.
- Airport Lounge Access: Gain entry to airport lounges with a Mastercard Travel Pass membership.
Cons
- High Income Requirement: Requires a minimum personal income of $80,000 or $150,000 household income.
- Annual Fee: The card comes with a high annual fee of $180.
- Limited Redemption: Asia Miles cannot be redeemed for flights within Canada.
Product Details
Product Details
Rewards
- Average of 5x Asia miles at Neo Partners
- 2x Asia miles on Cathay Pacific and foreign purchases
- 1x Asia miles at non-Neo Partners
- Considering all the reward conditions, the average estimated cash back on all purchases comes to 1.0 cent per asia miles point by FinlyWealth
Insurance
Coverage
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Car Rental Personal Effects
$1,000/person, $2,000 combined
Car Rental Accident
$100K for Cardholder, $10K spouse and childCar Rental Damage & Theft
48 daysBaggage Delay
$1,000 after 4 hours
Lost or Stolen Baggage
$1,000
Emergency Out of province Medical
14 daysFlight Delay
$250/day, $500 Maximum
Hotel Burglary Insurance
$1,000Purchase Protection
90 daysExtended Warranty
1 year
Benefits
Details
Airport Lounge - Dragon Pass
Pass only. No Complimentary visits!
Priority Travel
Online priority check-in and extra baggage redemption for Cathay Pacific, and Cathay Pacific Business class lounge redemption accessPriority Travel
Airport Security Fast Track with and professional and punctual airport with Mastercard benefits
Boingo Wi-Fi hotspot
Eligibility
Credit Score
PoorAnnual Income
$80,000 personal or $150,000 household
This card has a considerable annual fee, but for some users, it might actually be a great choice because it comes with many travel benefits and high rewards. You will earn Asia Miles on your purchases, so if you can use your points for Asia-related travel in the future, this card is a good choice.
The downsides are the high income requirements of the card and the rewards being limited to one specific purpose, lacking flexibility.
FAQ
What is a secured credit card
A secured credit card works similarly to a regular credit card but with a key difference: it requires a security deposit upfront. This deposit, usually refundable, acts as collateral for the card issuer and typically determines your credit limit. For example, if you deposit $500, your credit limit will generally be $500.
Here’s how it works in detail:
Application and Deposit: When applying for a secured credit card, you’ll be required to provide a cash deposit. The deposit reduces the risk for the card issuer, allowing them to approve the card even if you have no credit history or poor credit. This deposit acts as your collateral.
Credit Limit: The credit limit on a secured card is usually equal to the amount of the deposit. Some issuers may allow you to increase the credit limit by adding more to the deposit. Over time, responsible card use may lead the issuer to increase the limit without requiring an additional deposit.
Making Purchases: You can use the secured credit card just like a regular credit card for purchases, both in stores and online. You will receive a monthly statement with a balance, and you must make at least the minimum payment by the due date.
Building Credit: Secured cards are reported to the credit bureaus, meaning your payment history and credit utilization are tracked and used to build or improve your credit score. Making timely payments and keeping balances low helps improve your credit score over time.
Interest and Fees: Like unsecured credit cards, secured cards can carry interest on unpaid balances and may also have annual fees or other charges. Paying off the full balance each month avoids interest charges.
Refund of Deposit: If you demonstrate responsible use by making payments on time and improving your credit score, some issuers may offer to refund your deposit and upgrade you to an unsecured credit card. Alternatively, you may close the account and receive your deposit back, minus any outstanding balances.
Who should get a secured Credit Card
A secured credit card is ideal for individuals with no credit history, those rebuilding poor credit, or anyone rejected for traditional credit cards. It's a great option for people looking to establish or improve credit, as it requires a deposit, making it easier to get approved while promoting responsible financial habits.
Which financial institutions offer Secured Credit Cards
Surprisingly, none of the Big 5 banks of Canada (CIBC, BMO, TD, RBC, and Scotiabank) offer any secured credit cards. Therefore, to get one, you need to reach out to one of the financial institutions mentioned in the post to obtain a secured card.
What happens when you close your secured credit card
When you close a secured credit card, the following typically happens:
- Deposit Refund: If your account is in good standing with no outstanding balance, the card issuer will refund your security deposit. This can take a few weeks.
- Impact on Credit Score: Closing the card may temporarily lower your credit score, as it can reduce your available credit and affect your credit utilization ratio. However, if you've built good credit habits, the impact may be minimal.
- Credit History Retention: The account will remain on your credit report for up to 10 years, continuing to reflect your positive payment history even after the account is closed.
Before closing a secured credit card, it's essential to ensure there’s no remaining balance and consider how the closure may impact your credit.