Credit cards with no deposit: What to consider

If you’re exploring credit cards, you’ll find plenty out there. One big difference among them is that some require a security deposit. They’re known as secured cards. And others, known as unsecured credit cards, don’t.

Learn more about your options when it comes to unsecured cards and how the right card could play an important role in your credit journey.

Key takeaways

• Credit cards that don’t require a deposit are referred to as unsecured. 
• If a credit card requires a deposit to open the account, it’s referred to as secured. 
• With responsible use, secured credit cards may be a good option for people trying to build credit who aren’t as likely to be approved for unsecured cards.
• Before you apply, you could see if you’re pre-approved, which lets you check for card offers without affecting your credit scores.

Unsecured credit cards don’t require security deposits. They may be what comes to mind for most people when they think about credit cards. 

Secured credit cards function like unsecured cards, but they require refundable security deposits to open the account. The deposit acts as collateral and backs the borrower’s line of credit in case they’re unable to pay. 

Because of the deposit, secured cards typically have different eligibility requirements than unsecured cards do. Those differences might make them good options for people who aren’t as likely to be approved for unsecured cards.

Here are five options to consider if you’re searching for credit cards without a security deposit:

You could start by checking into pre-qualified or pre-approved credit card offers that you get online or in the mail. When you see either of those terms, it typically means your credit score and other financial information matched initial criteria needed to become a cardholder. 

With Capital One’s pre-approval tool, you can check if you qualify for a credit card with no deposit. Pre-approval doesn’t impact your credit scores, so it can be helpful for comparing options and finding the right fit.

It may make sense to explore credit cards for fair and building credit from Capital One.

There are also student credit cards, which are designed for college students and can be used like traditional credit cards. Benefits vary by issuer and may include things like cash back rewards, no annual fees and no security deposits.

When someone adds you as an authorized user, you’re given access to their credit card account. In some cases, you may even get your own card to make purchases. However, the primary cardholder remains responsible for making payments on the card. 

Besides not having to make a deposit, there’s another potential benefit to being an authorized user: It could help you start building your own positive credit history. But that’s only if the credit card issuer reports the authorized user’s account activity to the credit bureaus. And it’s important to note that negative reports as a result of things like late payments could have the opposite effect.

Improving your credit can take time. But these tips could help:

• Check your credit scores and reports so you can track your progress and spot errors.

• Know factors used to calculate credit scores.

• Understand common credit card mistakes to avoid.

• Make payments on time and keep credit card balances low.

• Beware of companies offering quick credit score fixes.

Secured credit cards are a lot like traditional cards except they require a deposit that serves as collateral. As the Consumer Financial Protection Bureau (CFPB) explains, “With most of these cards, your credit line starts out small.” But issuers like Capital One might offer credit lines higher than the deposit. One example is the Platinum Secured card. A $49, $99 or $200 minimum deposit opens your account with an initial credit line of $200. And you can also raise your initial credit line by depositing more than the minimum.

A secured card might provide a path to traditional, no-deposit cards. But it’s important to keep a few things in mind:

• It takes responsible use to build credit, whether you’re working toward rebuilding your credit or establishing it. That means doing things like paying your statement on time every month.

• You may eventually get your secured card deposit back. With a Capital One secured card, for example, your deposit can be refunded in two ways: You may earn back your deposit as a statement credit by using your card responsibly, or Capital One will refund it when you close your account and pay your balance in full.

• If you use the card responsibly, some credit card issuers may eventually allow you to upgrade to a different card that may have added rewards or benefits.

For a more comprehensive guide, check out how to get a credit card in six steps. But here are some of the basics:

If you’re new to credit or you’re working to rebuild your credit, consider looking at cards suggested for your credit score range. 

Not sure what your credit scores are? One way to check your credit is with CreditWise from Capital One. CreditWise shows you your VantageScore® 3.0 credit score and monitors credit reports from TransUnion® and Experian®, two of the three major credit bureaus. Best of all, CreditWise is free for everyone. And using it won’t hurt your credit scores. 

You can also get free copies of your credit reports from the three major credit bureaus. Visit AnnualCreditReport.com or call 877-322-8228 to learn more.

Understanding which credit cards are available based on your credit score can help you narrow down your options. It can be helpful to consider your needs and financial goals when choosing which credit card to apply for. For instance, you might consider card benefits like cash back, bonus miles or other perks that fit your lifestyle.

Getting pre-approved can help you understand which credit cards you might be eligible for. With Capital One’s pre-approval tool, you can see if you’re pre-approved for card offers without harming your credit scores.

Reviewing the terms and conditions before you apply for a credit card can help you avoid surprises once you become a cardholder. Here are a few common credit card fees and terms to learn about:

• Annual fees

• Annual percentage rate (APR)

• Cash advance fees

• New cardholder bonus offer

• Foreign transaction fees

When you go through the application process, the credit card issuer may require certain information such as:

• Full name and birth date

• Legal address

• Social Security number (SSN)

• Total annual income

• Employment status

There may be different ways to apply for credit cards with no security deposit, including:

• Online

• Over the phone

• In person

• By mail

Still have some questions about credit cards with no deposit? Check out these answers to frequently asked questions.

Whether you’re considering an unsecured or a secured credit card, it’s good to get an understanding of your credit scores, compare card options and explore pre-approval before applying. 

And if it turns out that a secured credit card is your best option, know that it can be a great stepping stone. With responsible use over time, you may be able to improve your credit score, get your security deposit back and even become eligible for a credit card with no security deposit required.