Secured Credit Cards in Canada

Secured credit card is a credit card that is secured by deposit. Most credit cards are unsecured, but there are few cases when secured credit card is your only option. Getting unsecured credit card in Canada is not as easy as in US for example. If you have recently immigrated to Canada, most banks won't give you unsecured credit card, but might offer you to get a secured one, which of course will require deposit. Even if you are not new to Canada, you might need a secured card. For example if you don't have any credit history, Canadian banks and financial institutions will be reluctant to give you any unsecured credit. If you have had credit problems or have filed for bankruptcy in the past the secured credit card might be the only avenue to rebuild your credit history.

Obtaining a secured credit card is relatively easy in Canada, and generally will require depositing a certain amount of money with the credit card issuing Canadian bank. The bank may charge you a credit card setup fee and yearly card fee, but there are financial institutions offering secured credit cards without setup or yearly fees. The amount of the security deposit will depend on the amount of the credit limit you are requesting. Most of the time Canadian banks will require 100% of your credit limit as a security deposit. For example if you apply for a secured credit card with Royal Bank for $1,000 Canadian dollars, the bank will most likely require a $1,000 deposit. Most Canadian banks will pay you interest on the security deposit. Keep in mind that Canadian secured credit cards come with higher interest rates compared to most regular unsecured credit cards. Just pay your credit card on time, and you’ll be fine.

When shopping for a secured credit card, it's wise to work with recognized Canadian financial players like RBC, CIBC, BMO, Scotiabank or TD Canada Trust. It's best to choose Visa, MasterCard or American Express cards, because they are accepted everywhere in Canada. Like with any form of credit, be careful and don't take on too much credit card debt.

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