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Secured Credit Card Ontario for Bad Credit

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Rounding it up

  • Comparing secured credit cards in Ontario requires evaluating fees, interest rates, payment terms and other factors to find the best fit for individual needs.

  • Eligibility for a secured card involves providing a security deposit and not being in bankruptcy.

  • Choosing the right card requires an evaluation of fees, eligibility requirements & upgrade options that suit one’s financial goals.

While most major banks in Canada do not provide dedicated secured credit cards, smaller banks and alternative financial institutions have stepped up to fill the gap.

Secured credit cards offer several advantages for those looking to improve their credit scores or establish a credit history. These cards come with basic travel and purchase insurance, 60 days of price protection for new purchases, cashback, points, and travel insurance, which are similar to traditional credit card benefits. Understanding how secured credit cards work can help you make the most of these advantages.

However, it’s important to note that secured credit cards still incur interest and may come with annual fees. Some options do have low or no annual fees, but the additional security of lower interest rates might not be enough to outweigh the rewards programs offered by competing cards, such as prepaid credit cards.

To make the most of a secured credit card, it’s essential to choose a card with the right features, fees, and rewards for your specific needs. Keep reading to learn more about comparing secured credit cards in Ontario and understanding the eligibility requirements.

Eligibility Requirements for Secured Credit Cards

One of the key advantages of secured credit cards is their lenient eligibility requirements compared to unsecured cards. To be eligible for a secured credit card in Ontario, you only need to provide the required security deposit and not be in bankruptcy. This makes secured credit cards accessible to individuals with poor credit scores or no credit history.

A security deposit is mandatory for secured credit cards and serves as collateral to reduce the risk assumed by the credit card provider. As a result, secured credit cards can help you build or rebuild your credit history without the stringent requirements of traditional credit cards.

Understanding the eligibility requirements for secured credit cards can help you determine if this is the right option for you and guide you through the application process, which we’ll cover in the next section.

How to Apply for a Secured Credit Card in Ontario

Applying for a secured credit card in Ontario is relatively straightforward. Most applications can be completed online, but it’s crucial to fill them out accurately, reflecting your financial circumstances. You’ll need to provide personal information and documents, including your Social Insurance Number, address, government-issued ID, and proof of employment.

The security deposit required for a secured credit card in Ontario typically ranges from $200 to $500. Once your application is approved and you’ve submitted the deposit, you’ll need to make an initial purchase to activate the card.

With the right documentation and a clear understanding of your financial situation, applying for a secured credit card in Ontario can be a straightforward process that puts you on the path to better credit.

Using a Secured Credit Card Responsibly

Secured credit cards are a powerful tool for building or rebuilding credit, but it’s essential to use them responsibly. To make the most of your secured credit card and improve your credit score, ensure that you make timely payments and monitor your credit utilization. Select a secured card from a credit provider that sends updates on your payments to the credit bureaus. Not all issuers do this, so make sure to check before signing up. This will ensure that your responsible use of the card is reflected in your credit report and contributes to improving your credit score.

It’s recommended to make a few minor purchases each month and pay the monthly bill in full. Maintaining a low credit utilization rate demonstrates to creditors that you’re capable of managing your finances. By using a secured credit card responsibly, you can improve your credit score and eventually become eligible for more advantageous financial products, such as unsecured credit cards.

Transitioning to an Unsecured Credit Card

Once you’ve demonstrated responsible use of your secured credit card and improved your credit score, you may be eligible to graduate to an unsecured credit card, which offers more rewards and benefits. Responsible cardholders have the privilege to upgrade their secured credit card to an unsecured one. Many credit card providers offer this chance. If this option isn’t provided, it’s OK. You can simply close the account and look out for an unsecured card at other institutions. There are lots of options available. In either case, the issuer will reimburse your security deposit in full (minus any outstanding payments) upon closing of the account.

Transitioning to an unsecured credit card is an important milestone in your financial journey, as it indicates that you’ve successfully built or rebuilt your credit to a level where you can access more financial products without the need for a deposit. Keep in mind that the same responsible usage principles apply to unsecured credit cards. Continue to make timely payments and monitor your credit utilization to maintain and improve your credit score.

Benefits and Drawbacks of Secured Credit Cards

Secured credit cards offer numerous benefits, including the opportunity to reconstruct credit and the assurance of guaranteed approval. They’re an accessible option for individuals with poor credit scores or no credit history, as the deposit acts as a form of security for the credit card provider.

However, there are also drawbacks to consider when using secured credit cards. They often come with high fees and limited rewards compared to unsecured credit cards. Additionally, secured credit cards require a security deposit, which could be a financial burden for some individuals.

Despite the disadvantages, secured credit cards can be a valuable tool for those looking to improve their credit history and gain access to better financial products in the future. Weighing the benefits and drawbacks of secured credit cards can help you make an informed decision about whether they’re the right choice for your financial needs.

Secured vs. Unsecured Credit Cards in Ontario

The primary distinction between a secured and unsecured credit card is that a secured credit card necessitates a deposit, whereas an unsecured credit card does not. This deposit acts as collateral and determines the credit limit for a secured credit card.

Unsecured credit cards typically require a credit score of 660 or higher for eligibility. Individuals with lower credit scores or no credit history may find secured credit cards to be a more accessible option, as they have more lenient eligibility requirements.

When deciding between a secured and unsecured credit card, it’s essential to review your credit score and financial situation to determine which option is best suited for your needs. Both types of cards can help you achieve your financial goals, but each comes with its own set of advantages and disadvantages.

Tips for Choosing the Right Secured Credit Card

When selecting the right secured credit card for your needs, consider factors like credit reporting, fees, security deposit requirements, eligibility requirements, and upgrade options. Make sure to choose a credit card issuer that reports payments to the major credit bureaus, such as TransUnion or Equifax (or both), so that your responsible card usage is reflected in your credit report.

Evaluate the card’s features and benefits, such as rewards, interest rates, and fees, to find the best fit for your financial goals. Also, be sure to understand the card’s terms and conditions, including the introductory period, grace period, and late payment fees.

By carefully considering these factors, you can select the best secured credit card for your unique needs and financial goals. Remember that using a secured credit card responsibly can set you on the path to better credit and more financial opportunities in the future.


Secured credit cards can be a powerful tool for improving your financial situation and building a solid credit history. By understanding the differences between secured and unsecured credit cards, comparing options, and using a secured credit card responsibly, you can pave the way for a brighter financial future. Take control of your finances and make an informed decision about which secured credit card is right for you.

Frequently Asked Questions

Is it a good idea to get a secured credit card?

Yes, a secured credit card can be a smart choice for improving your credit score. If you’re willing to commit to regular, responsible use and keep an eye on your spending, a secured credit card can help to demonstrate that you are a reliable borrower and increase your creditworthiness.

What are the minimum requirements for a secured credit card?

To qualify for a secured credit card, you must be at least 18 years old and able to provide a minimum security deposit that is equal to or greater than the required credit limit. The amount of the security deposit varies from issuer to issuer, so make sure to check in advance.

Additionally, most issuers will also require proof of income and residency.

Can a secured credit card hurt your credit?

Yes, a secured credit card can hurt your credit if it involves a hard inquiry into your credit score, or if you fail to pay the balance in full and on time.

However, if you use your secured card responsibly by making all payments on time, it can actually help improve your credit score over time.

What is the main difference between a secured and unsecured credit card?

The key difference between a secured and unsecured credit card is that the former requires a deposit as collateral, whereas the latter does not.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!