Secured cards
Secured credit cards in Canada
A secured credit card is backed by a refundable security deposit, and that deposit is what makes it accessible when your credit is limited or being rebuilt. Used responsibly, it is one of the most reliable ways to build a credit history.
Browse secured cards →At a glance
- A refundable deposit backs the card — it is collateral, not your payment
- It works like a normal card and, if it reports to the bureaus, builds credit
- Common for building from scratch or rebuilding after difficulty
- No specific card is recommended here — compare terms before you apply
How a secured card works
When you open a secured card you provide a refundable security deposit, often equal to your credit limit. That deposit is what reassures the issuer, which is why a secured card is available when a regular unsecured card is not.
A crucial point that trips people up: the deposit is collateral, not a prepayment. You still receive a monthly statement and you still have to pay your balance. The deposit sits untouched as security and is refunded when you close the account in good standing or graduate to an unsecured card.
Who a secured card is for
Secured cards exist for the situations where credit history is the obstacle. If any of these describe you, a secured card is a common and legitimate path forward.
- Building credit from scratch, with no history to show yet
- Rebuilding credit after financial difficulty
- Being declined for unsecured cards because of a thin or damaged file
Building credit with a secured card
The mechanism that builds credit is the same as any card: consistent, responsible use reported to the credit bureaus. The deposit gets you in the door; your habits do the rest.
Pay the balance in full and on time, keep your usage low relative to the limit, and give it time. Many issuers periodically review secured accounts and may offer to graduate a well-managed account to an unsecured card — often returning your deposit at that point.
What to look for before you apply
Secured cards differ in ways that matter for building credit, so a few checks are worth making before you commit.
- That it reports to the credit bureaus — this is essential to build credit
- The annual fee and the minimum and maximum deposit
- Whether there is a path to graduate to an unsecured card
- Whether it earns any rewards, though that is secondary to building credit
Frequently asked questions
Is the security deposit the same as my payment?
No. The deposit is collateral that the issuer holds — it is not a prepayment of your purchases. You still receive a statement each month and must pay your balance. The deposit is refunded when you close the account in good standing or graduate to an unsecured card.
Do I get my deposit back?
Yes, provided the account is in good standing. Your refundable deposit is returned when you close the secured card with no outstanding balance, or when an issuer graduates you to an unsecured card and releases it.
Does a secured card actually build credit?
It does, as long as the card reports your activity to the credit bureaus — which is the single most important thing to confirm before you apply. On-time payments and low utilization on a reporting secured card build history the same way an unsecured card would.
How is a secured card different from a prepaid card?
A prepaid card spends money you have loaded and does not build credit. A secured card is a real credit card backed by a deposit: you borrow, you are billed, and your payment behaviour is reported to the bureaus — which is what builds your credit history.
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