Credit cards with no deposit: What to consider

If you’re exploring credit cards, you’ll find plenty out there. But one big difference among them is that some require a security deposit. 

These are known as secured cards. And others, known as unsecured credit cards, don’t.

What you’ll learn:

• Credit cards that don’t require a security deposit are referred to as unsecured. 

• Credit cards that require a deposit are referred to as secured. 

• Secured credit cards may be a good option for people who may not be approved for unsecured cards.

• You could see if you’re pre-approved for secured and unsecured cards before you apply—without affecting your credit scores.

Cards that don’t require security deposits are called unsecured credit cards. They may be what comes to mind when most people think about credit cards. Cards that require deposits are called secured credit cards. 

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

Generally, unsecured credit cards tend to offer better benefits and rewards. But secured cards typically have less strict eligibility requirements than unsecured cards because of the deposit. Those differences might make them good options for people who aren’t as likely to be approved for unsecured cards.

Here are three options to consider for a credit card without a security deposit:

Even if you’re establishing or building credit, there may be unsecured credit cards you can qualify for. 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 and may include things like cash back rewards, no hidden fees and no security deposits.

When someone you trust adds you as an authorized user, you’re given access to their credit card account. You’ll typically get your own card to make purchases even though the primary cardholder is ultimately responsible for the charges made on the account. 

Authorized users generally don’t have to make a deposit to be added to an established credit card account. They usually don’t have to go through a credit check, either. 

Keep in mind that responsible use of credit is important for both the authorized user and the primary cardholder. That’s because positive and negative actions can affect both of your credit.

Improving your credit can take time, but it may help you get approved for an unsecured card. These tips could help:

• Check your credit reports so you can track your progress and understand the factors used to calculate credit scores.

• Understand common credit card mistakes to avoid.

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

• Beware of companies offering quick credit score fixes.

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

1. Review and monitor your credit. One way to check your credit is with CreditWise from Capital One. It’s free for everyone, and using it won’t hurt your credit scores. You can also get free copies of your credit reports at AnnualCreditReport.com.

2. Evaluate the different card options. Understanding which credit cards might be available based on your credit scores 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.

3. Get pre-approved. Getting pre-approved can also help you understand which credit cards you might be eligible for. With Capital One’s pre-approval tool, you can check to see if you qualify for a credit card with no deposit before you officially apply. Pre-approval doesn’t impact your credit scores, so it can help you compare options and find the right fit.

4. Understand the credit card’s terms and conditions. Reviewing a credit card’s terms and conditions before you officially apply can help you avoid surprises once you become a cardholder. For instance, make sure you understand the card’s annual percentage rate (APR), fees and promotional offers.

5. Find out what information you may need. When you go through the application process, the credit card issuer may require certain information, such as your full name, birth date, legal address, Social Security number, annual income and employment status.

6. Choose your application method. There may be different ways to apply for credit cards with no security deposit, including online, over the phone, in person or by mail.

If you’re finding it difficult to get approved for an unsecured credit card, a secured card might be another option. With responsible use, you could build credit to put yourself in position to upgrade to an unsecured card. 

Although secured cards may start with a lower credit limit than unsecured cards, some issuers might offer credit lines higher than the deposit. One example is the Capital One 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.

Still have questions about credit cards with no deposit? These answers to frequently asked questions might help.

Whether you’re considering an unsecured or 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 scores, get your security deposit back and even become eligible for a credit card with no security deposit required.

Are you new to credit or searching for your next credit card? Capital One can help:

• Check for pre-approval offers with no risk to your credit scores.

• Earn unlimited 1.5% cash back on every purchase, every day with Quicksilver or other cash back rewards cards.

• Explore credit cards you can use to build credit responsibly and earn rewards.

• Monitor your credit score with CreditWise from Capital One. It won’t hurt your credit, and it’s free for everyone.