If you have less-than-perfect credit and want to get a credit card, you may have come across secured credit cards, which usually require a refundable security deposit.
It may be challenging to get a credit card with no security deposit requirement while building or rebuilding credit, but it’s definitely not impossible.
Here’s a look at credit cards with no deposit requirements and what you need to know to get started.
What types of credit cards don’t require deposits?
Many credit cards don’t require security deposits, but you’ll generally need a good credit score to qualify. If you have fair credit, you may still find some cards without a security deposit. Cards in this category are called “unsecured credit cards.”
Unsecured cards can come with rewards, annual fees, and generally have interest rates. Premium rewards credit cards generally don’t require any security deposit, but you’ll often need a good to excellent credit score to qualify. Some cards, like travel rewards cards, also carry annual fees.
Lower credit scores can limit you to cards with higher interest rates and yearly fees. Regardless of your credit, read the terms and conditions closely so you’re not surprised by unexpected costs.
Secured vs. unsecured credit cards
We keep discussing secured credit cards and unsecured credit cards. But what exactly does that mean?
Unsecured credit cards are credit cards that don’t require collateral or a security deposit. The credit card company issues the cards based on the borrower’s credit history. If the credit card holder doesn’t pay the card as agreed, arguably the biggest penalty is damage to their credit score.
With secured credit cards, the cardholder usually puts down a deposit, typically equal to the card’s credit limit. Borrowers can lose their deposit if they don’t repay the card as agreed. If you pay off the card as agreed, you’ll get your deposit back when you close the account or if your account is converted to an unsecured version.
Learn more in this guide on secured vs. unsecured credit cards.
Credit cards with no minimum deposit requirement
Looking for a credit card with no minimum security deposit?
If your primary goal is to avoid interest² and fees, you should know about Chime’s Credit Builder. This unique secured credit card can help you build credit without a long-term security deposit.³
When you want to use your credit card, you can move funds from your Chime Checking account to Credit Builder. The funds you add act as your credit limit. If you turn on the Safer Credit Building⁴ feature, the funds acting as your credit limit are automatically used to pay your balance.
When you’ve reached your credit limit, transactions with the card are denied with no additional fees. Your on-time payments are reported to all three major credit bureaus, Experian®, Equifax®, and Transunion®, helping you build a positive credit history.
If you want to safely build credit with on-time payments, learn more about Credit Builder.
Other ways to use credit cards to build or rebuild your credit
Because many credit cards for people new to credit or with bad credit require a deposit, it takes a little research to find credit cards with no deposit when building credit.
There are other ways to build credit if you are open to options outside of no-deposit credit card options.
Become an authorized user
If you have a family member with good credit, you may be able to build your credit as an authorized user. As an authorized user, you get similar benefits to your credit score as the person who opened the account.
If the primary account holder keeps the balance low and always pays on time, you should see your credit score increase over time as an authorized user. However, if they have a high balance or miss payments, it’ll harm your credit score. Make sure you trust the primary account holder to handle the account well, or this strategy can backfire.
Also, it’s important to be aware that authorized users have the same ability to spend money using the account as the account’s owner. Because of this risk to the primary account holder, you’ll likely only find a close relative, such as a parent or grandparent, willing to add you as an authorized user.
Work on building your credit with unsecured cards
While it may sound counterintuitive, one of the best ways to build credit is with an unsecured credit card. As long as you keep the balance low and pay it off in full by the monthly due date, it should help your credit, and you won’t pay any interest.
If you don’t have a lot of savings or just want to keep your cash in the bank instead of using it as a credit card security deposit, you’ll want to find an unsecured credit card designed for building or rebuilding credit.
Build or rebuild your credit with care
If you want to open a credit card account with no deposit, you have options, even with bad credit. Just take care to understand the costs and fees before signing up for any new card, and always keep your balances low and pay your card on time to build credit.
If you’re working on building credit, read more about what affects your credit score.
Frequently asked questions
Do student credit cards require a deposit?
Some student credit cards require a deposit, but that’s not a universal rule. Some student credit cards are unsecured, meaning they don’t require a deposit. If you are considering a credit card designed for students, be sure to read the specific details of that card.
What do I need to qualify for a credit card with no deposit?
Most credit card companies review your credit report, credit score, and monthly income compared to your debts, known as your debt-to-income ratio, when approving credit card applications. Higher credit scores and a lower debt-to-income ratio improve your approval odds without a security deposit.
What’s the easiest credit card to get?
Secured credit cards are often available without a credit check, which could make them easy to get. If you’re looking for a card with no credit check, consider the Chime® Credit Builder Secured Visa® Credit Card.