Since secured credit cards offer the only option for many people to rebuild their credit, CardHub.com created a report to identify the minimum requirements for approval for secured credit cards at several major banks. To compile this report, CardHub.com contacted the largest credit card issuers, as well as a few smaller banks that are active in the secured credit card space.
The results of the report determined that there is a wide variation in requirements for approval for secured credit cards across major banks.
Key Findings:
- 62% (13 out of 21) of the banks contacted for this report offer secured credit cards.
- The minimum standards for all banks that offer secured credit cards are the following:
- A security deposit must be provided in order to open a secured account, although there is some variation in the form of the security deposit among banks. Some banks will allow the security deposit through cash or check, while others require that the applicant open a Certificate of Deposit or savings account in the same bank that is tied to the secured credit card.
- The applicant must provide a Social Security Number and all information on the application form must be valid.
- The CARD Act now requires that all credit issuers impose the Income Test before giving credit to an applicant to make certain that all borrowers have the ability to repay. The Income Test requires that the total monthly income be equal or greater than the total monthly obligations, including the minimum payment on the card.
- 38% (5 out of 13) of the banks evaluated that offer secured credit cards require only the minimum standards for approval.
- In terms of additional requirements, many banks require that the applicant is not currently involved in bankruptcy. This is largely due to the fact that they do not want to risk the security deposit for the secured credit card being claimed by other creditors as an asset in bankruptcy proceedings
- Current delinquencies in other accounts need to be satisfied before certain banks will approve an applicant for a secured credit card.
- Of the banks evaluated that offer secured credit cards, 77% allow the applicant to apply through a bank branch location, 54% allow the applicant to apply online, 31% allow the applicant to apply through the mail, and 15% allow the applicant to apply over the phone.
- The bank with the strictest requirements is Citibank, which requires that the applicant must not have any bankruptcy history, write-off history, or account in collections within the last two years. The banks with the least strict requirements are HSBC/Orchard Bank, USAA, PNC, Applied Bank, and First Progress, which only require the minimum standards mentioned above.
Additional requirements by bank are summarized in the table below:
| Issuer | Offers Secured Cards | How to Apply | Additional Requirements for Approval | Source |
| American Express | No | N/A | N/A | Confirmed by Bank |
| Chase | No | N/A | N/A | Confirmed by Bank |
| Bank of America | Yes | Through a branch location and online | An applicant must have been out of bankruptcy for at least a year. The bank will consider the customer’s other accounts with the bank and credit history when evaluating the application for a secured card. If the customer has current delinquencies on other accounts they are likely to be denied for a secured credit card. | Confirmed by Bank |
| Citi | Yes | Through a bank branch and through the mail | The applicant must not have any bankruptcy history, write-off history, or account in collections within the last two years. | Citi Secured Credit Card Application |
| Capital One | Yes | Through a branch location and online | The courts must have discharged the customer’s debts before a customer can be approved for a secured credit card. | Confirmed by Bank |
| Discover | No | N/A | N/A | Confirmed by Bank |
| US Bank | Yes | Through a bank branch and through the mail | In most cases the applicant must have never filed for bankruptcy. However, it is possible that U.S. Bank will make an exception if the bankruptcy happened more than 2 years prior to the application. | Confirmed by Bank |
| Wells Fargo | Yes | Through a branch location – Consumers with an existing Wells Fargo relationship can also apply online or on the phone | The applicant must have been out of bankruptcy for a year, must not have any unsettled liens, and must be a current Wells Fargo customer. Wells Fargo also considers the customer’s FICO score. Note: starting in February 2012, Wells Fargo will approve customers who are out of bankruptcy (no longer need to wait 1 year). | Confirmed by Bank |
| HSBC/Orchard Bank | Yes | Through a branch location and online | None | Confirmed by Bank |
| Barclays | No | N/A | N/A | Confirmed by Bank |
| USAA | Yes | Apply online and through the mail | None | Confirmed by Bank |
| GE Money | No | N/A | N/A | Confirmed by Bank |
| PNC | Yes | Through a branch location | None | Confirmed by Bank |
| First National | Yes | Through a branch location | The applicant’s credit report and credit score are considered before approval. Because the applicant is putting money down, approval is much easier than for a regular credit card. Unless the applicant has a major pending judgment against them or has very recent bankruptcy or delinquency history (in the last few months), they are likely to be approved. | Customer Service Representatives |
| Navy Federal | Yes | Through a branch location or over the phone | Navy Federal will look at the applicant’s credit to establish interest rate, but putting down the security deposit will in most cases get the applicant the card. This money is all the applicant needs for approval unless they had been a member of Navy Federal and the bank had suffered a loss from their account. In that case, Navy Federal will not extend further services until those losses are satisfied. | Confirmed by Bank |
| BB&T | No | N/A | N/A | Confirmed by Bank |
| Fifth Third | Yes | Through a branch location | Approval for the Fifth Third secured credit card is subject to credit review. | Confirmed by Bank |
| Citizens | No | N/A | N/A | Confirmed by Bank |
| SunTrust | No | N/A | N/A | Confirmed by Bank |
| Applied Bank | Yes | Online | None | Confirmed by Bank |
| First Progress | Yes | Online and through the mail | None | Confirmed by Bank |
Note: For credit card companies who offer the option to apply through the mail, some may require that the applicant request the application over the phone or print it out online, while others only offer this option in response to direct-mail solicitation.
For more information regarding this study please contact our Media Department.
