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Mission Lane Visa® Credit Card

Mission Lane Visa<sup>®</sup> Credit Card
  • No Annual Fee
  • Fair Credit
  • Enjoy coverage from Visa®.
    *See Card Terms

Indigo® Mastercard® - $1,000 Credit Limit

Indigo<sup>®</sup> Mastercard<sup>®</sup> - $1,000 Credit Limit
  • Get the credit limit you deserve—$1,000 guaranteed if approved
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Milestone® Mastercard®

Destiny Mastercard
  • $700 Credit Limit
  • No security deposit
  • Less than perfect credit is ok
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How to Use Secured Credit Cards Effectively for Credit Building



For individuals with no credit history or a past record of bad credit, a secured credit card is one of the most reliable and accessible tools for building a positive credit history. Backed by a security deposit you provide, these cards eliminate risk for the issuer, making them easier to qualify for. However, simply getting a secured card is not enough. You need to use it strategically and responsibly to maximize its credit-building potential.

For a comprehensive overview of the credit-building process, read our guide, A Complete Guide to Building and Rebuilding Credit with a Credit Card.

The mechanics of a secured card

Before diving into strategy, it's important to understand how a secured card works.

  • The security deposit: You provide a cash deposit to the card issuer, which is typically held in a separate account.

  • The credit limit: Your credit limit is usually equal to the amount of your deposit. For example, a $300 deposit will give you a $300 credit limit.

  • Reporting to bureaus: The card issuer reports your payment history and credit utilization to the major credit bureaus (Experian, Equifax, and TransUnion), which is how a secured card helps build your credit score.

    • Choosing the right secured card

    Not all secured cards are created equal. Here are the key factors to consider when selecting the right card for your goals:

  • Reports to all three major bureaus: To maximize your credit-building impact, choose a card that reports to all three credit bureaus.

  • Low or no annual fee: A lower annual fee means more of your money goes toward your credit limit and less to unnecessary fees.

  • Look for a graduation process: Some cards are designed to "graduate" you to an unsecured card after a period of responsible use. The Discover it® Secured Credit Card is well-known for this process.

  • Minimum deposit requirement: Find a card that has a minimum deposit you can afford.

    • Best practices for using a secured card

    Once you have your secured card, following these best practices will help you build credit effectively.

  • Pay on time, every time: This is the most important factor in your credit score. Set up automatic payments to ensure you never miss a due date.

  • Keep credit utilization low: Aim to keep your spending below 30% of your credit limit. This signals to lenders that you are not overextended. For example, on a $500 limit, a balance of $150 or less is ideal.

  • Use it, but don't max it out: Make small, regular purchases with your card to build a positive payment history. Using the card regularly and paying it off shows consistent, responsible credit management.

  • Pay off your balance in full: Whenever possible, pay your balance in full each month to avoid interest charges and keep your utilization at its lowest.

    • Transitioning to an unsecured card

    The ultimate goal of a secured card is to eventually move on to an unsecured card.

  • After 6-12 months: After consistently managing your secured card responsibly for 6 to 12 months, you can begin to qualify for unsecured cards. Some issuers will even initiate the process for you. For a detailed guide on this process, see our article on How to Graduate from a Secured to an Unsecured Credit Card.

  • Keep your original card: If you graduate to a new unsecured card from the same issuer, you may be able to keep the original account opening date, which helps the "length of credit history" factor.

    • Related credit card articles

  • A Complete Guide to Building and Rebuilding Credit with a Credit Card

  • What Happens to Your Credit When You're an Authorized User?

  • How to Graduate from a Secured to an Unsecured Credit Card

  • How Your Credit Card Affects Your Credit Score





    • Found this guide helpful? Bookmark it for future reference as you continue your financial journey!

    Experian Boost: A Comprehensive Guide to Boosting Your Free Credit Score

    FICO Credit Scores

    A credit score is a number generally between 300-850, based on a statistical analysis of a person's credit files. This score represents the credit worthiness of a person. A credit score is assigned to each individual, to rate how risky a borrower he or she is--the higher the score, the less risk the individual poses to creditors. In most cases, your credit score will determine whether you will be approved for a credit card.

    What is a Credit Score?

    A credit score is a number generally between 300-850, based on a statistical analysis of a person's credit files. This score represents the credit worthiness of a person. A credit score is assigned to each individual, to rate how risky a borrower he or she is--the higher the score, the less risk the individual poses to creditors. In most cases, your credit score will determine whether you will be approved for a credit card.

    Credit Score Facts

    1. Credit Scores range from 300-850, the higher the better.
    2. Most lenders base approval on your credit score.
    3. Higher Scores mean lower payments and better deals.
    4. Higher Scores mean Lower interest rates.
    5. Scores are determined by 5 main categories:
      • Payment History
      • Amounts Owed
      • Length of Credit History
      • Type of Credit Used
      • New Credit

    Note: Credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any credit card product.


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