What are the alternatives to a secured credit card?
Since secured credit cards are so hard to find in the UK, consider these alternatives instead:
Credit builder cards: Designed for people with limited or poor credit history. You don't need a deposit, though they typically have lower credit limits and higher interest rates.
Prepaid cards with credit-building features: Some prepaid cards let you build credit for a small fee. You load money onto the card and your activity gets reported to credit agencies.
The key difference? Neither of these require tying up hundreds of pounds in a deposit upfront.
That said, if you do come across a secured credit card offer, here's how they work.
What is a secured credit card?
A secured credit card is a type of card that needs a deposit before you can use it. The money you put down usually becomes your spending limit — the most you can spend on the card.
Think of it like this: The deposit is a safety net for the card provider. If you don’t pay your bill, they can use the deposit to cover it. Basically, it lets people with little or poor credit borrow safely while building their credit history.
Who can get one?
They’re typically aimed at people who:
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Have no credit history
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Have a poor credit score
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Want to rebuild their credit after financial difficulties
Even if your credit history isn’t perfect, putting down a deposit gives the card provider reassurance that you’ll repay what you borrow.
How do secured credit cards work?
Here’s a step-by-step look at what happens when you use a secured credit card:
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You pay a deposit, usually a few hundred pounds. This becomes your credit limit.
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Use the card like a normal credit card: pay for purchases, and repay your balance.
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Interest and fees apply if you don’t pay in full.
Benefits of a secured credit card
When used carefully, a secured credit card can offer several advantages:
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Helps build or rebuild credit when used responsibly
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Easier to get approved than an unsecured card
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Offers protection for purchases, just like a normal credit card
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Can act as a stepping stone to a standard credit card in the future (though credit builder cards are the more common path)
It’s worth remembering, though, that a secured card requires a deposit and can still incur interest or fees if not managed carefully, so it’s important to treat it responsibly.
Tips for using a secured credit card
Here are some simple ways to get the most out of your secured card:
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Pay your balance in full each month to avoid interest
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Keep your spending well below your limit
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Set up alerts or automatic payments to never miss a due date
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After a year of responsible use, consider asking your provider about upgrading to an unsecured card.
Making the most of your secured card
While it's a rare option, if you do find a secured card, it can be a helpful tool for building or rebuilding your credit, but it works best when used responsibly. Pay your balance on time, keep any spending within your budget.
With careful use, your secured card can help improve your credit history and open the door to standard credit cards in the future.
If you can't find a secured card that suits you, the credit builder alternatives mentioned earlier can help you achieve the same goal.
Disclaimer: We make every effort to ensure content is correct when published. Information on this website doesn't constitute financial advice, and we aren't responsible for the content of any external sites.
Fiona Peake
Personal Finance Writer
Fiona is a personal finance writer with over 7 years’ experience writing for a broad range of industries before joining Ocean in 2021. She uses her wealth of experience to turn the overwhelming aspects of finance into articles that are easy to understand.
