Can You Get Denied for a Secured Credit Card?

FT Contributor
A closeup of a credit card application that is stamped "denied."

A secured credit card is designed to help you build your credit. You’ll need to provide a refundable security deposit equal to the amount of the secured card’s credit limit. If you don’t repay your credit card, the issuer could use the security deposit to pay the balance of the credit card and close it.

You would think that a secured credit card designed for people wanting to build credit would be a sure thing to get. Unfortunately, it’s not always the case. A card issuer may still check your credit and decide you’re too risky and deny you. Learn more about the reasons you’d be rejected for a secured credit card and what alternatives may be available.

Table of Contents

Reasons for Getting Denied for a Secured Credit Card

There are some main reasons why someone would be denied a secured credit card.

Bad Credit Habits

Secured credit card companies typically check your credit when you apply. The issuer can tell a lot about your financial habits by viewing your credit history. They expect your credit won’t be excellent if you’re applying for a credit-building card, but they still have some standards for the customers they approve.

If you’ve previously filed for bankruptcy, have delinquencies from making late mortgage or credit card payments, or have discharges on your credit report, the card issuer or financial institution may decide you’re too risky to extend a secured card to.

Low Income

You may be denied a secured credit card if you’re unemployed, underemployed or earn a low income. Put yourself in the shoes of the card company. How can someone pay their credit card bills if they barely make enough to cover their living expenses? Credit card issuers want to see you earn enough to afford to pay your credit card balance off.

Starting a New Job

If you’ve only been at your job for a couple of weeks, a secured card creditor could feel concerned about your job’s stability. A card company may be more willing to extend credit to someone who’s been in a long-term job than someone working for a company less than a month.

What to Do If You Were Denied a Secured Credit Card

If you’re denied a secured credit card, don’t let it discourage you. Use it as a learning experience and consider the following ideas to achieve your financial goals:

Apply for Other Cards

Just because you were denied for one secured credit card doesn’t mean you’ll be denied by all. Once the surprise of the rejection is over, get down to business and do some research to find other secured card options. If you were denied for a card because of your credit, search and apply for secured credit cards that don’t check your credit.

Become an Authorized User

You may be able to get your own credit card based on someone else’s credit history. Ask a friend or family member if they’d be willing to add you to their credit card account as an authorized user. You’ll get your own credit card even though it’s a shared account and have the opportunity to improve your credit based on your spending and payment habits.

If the person willing to add you to their card account has good credit, you may receive a credit card with perks and features reserved for customers with great credit. Use the card wisely — the person that trusts you enough to add you to their credit card account may be on the hook if you overspend or fail to make your payments on time.

Make On-Time Payments

If you’re dealing with a checkered credit history, you’ll need to put some time and effort into improving your credit. Start by setting up a personal budget to better manage your spending and have the funds to make on-time loan payments consistently. Set up automatic payments to ensure your payments won’t be late.

Once you start showing you’re responsible and capable of making your payments on time, your credit score is bound to improve, making it easier to qualify for a credit card in the future.

Alternatives to a Secured Credit Card

If you’re unable to get approved for a secured credit card, consider alternative credit products.

Credit-Builder Loans

There are loans available with the sole purpose of helping you build (or rebuild) your credit. Credit-builder loans are installment loans that require you to make monthly payments towards the debt. The lender will report your loan payment activity to the major credit bureaus. Repay your loan responsibly and on time and you’ll see your credit score improve.

Credit Union Secured Cards

If you’re a member of a credit union, you’ll have advantages that others who work with a regular bank may not have. And if you’re not a member of a credit union, search your area for one. You may qualify for membership based on military service, employment or vocation, or the community you live in.

Once you’re a credit union member, open a bank account and keep it active. After you have a good track record based on your bank account activity, apply for a secured credit union credit card. Having a banking history with the credit union could improve your chances of qualifying for the credit union’s secured card product.

Retail Store Cards

Retail store credit cards, such as the Target RedCard, may be easier to qualify and get approved for. The credit limit you’re approved for may be small, but it’s a good start on your path to rebuilding your credit.

Remember to use your credit card wisely if you’re approved. Avoid overspending which leads to “maxing out” the card to the credit limit. Pay the monthly credit card balance due on time or early. Once you get into the (good) habit of being cautious about your spending and paying your card each month on time, you’ll probably receive other credit card offers.

Image Source:


Want a FREE Credit Evaluation from Credit Saint?

A $19.95 Value, FREE!

This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as This compensation may impact how and where links appear on this site.  This site does not include all financial companies or all available financial offers. Learn more in our Earnings Disclaimer.
Get a FREE Credit Evaluation from Credit Saint Today!