About Secured Credit Cards

A secured credit card is a good choice for someone who needs to establish or reestablish credit.

To get a mortgage you need to have established credit.  When you have a credit card, the credit card company reports your credit repayment history to the credit bureaus which creates your credit history and a credit score.  You need to establish credit if:

• You've never had a credit card, loan or line of credit; or,
• You're new to Canada; or,
• You've recently had credit troubles (that could include a bankruptcy or consumer proposal

Frequently Asked Questions about Secured Credit Cards

What's a secured credit card?

A secured credit card gives you access to credit, just like any other credit card. The only difference is that you need to provide security funds as collateral before you can receive your card and access your credit.

Why should I get a secured credit card?

With a secured credit card, your payment information gets reported to the credit bureaus. Using your card and making your payments on time gives you the chance to build or rebuild your credit history.

What's the difference between a secured credit card and a pre-paid credit card?

Unlike a pre-paid credit card, a secured credit card gives you a credit limit – you don't have to keep reloading it with your own money. With pre-paid credit cards don't give you the chance to build a credit history because no payment information is reported.

As I continue to use my secure credit card responsibly and build my credit history, will the card company consider raising my credit limit or returning my security funds?

This is possible though dependant on the card provider and your account performance. Among other things, good account performance includes paying at least your minimum required payment each month on or before the due date. As your good credit history develops, there will likely be other credit card offerings that are more appropriate or offer better value for you.

Secured Credit Cards to Consider

Capital One: http://www.capitalone.ca/credit-card/guaranteed/guaranteed-mastercard/

Peoples Trust: http://www.peoplestrust.com/main/?en&Secured_MasterCard_Card

TD CanadaTrust: http://www.tdcanadatrust.com/products-services/banking/credit-cards/secured-cards/index.jsp