Canadian Banks Who Offer Secured Credit Cards

Credit cards are often necessary to purchase items online, reserve cars, hotels and for other items for which you may not be carrying enough cash.

Credit cards fall into many categories including unsecured credit cards, debit cards and secured credit cards. An unsecured credit card is similar to a credit line where the Bank extends you credit up to your limit and you repay without having to give the Bank any collateral such as a car, mortgage or deposit account. A debit card may look like a credit card but money is deducted directly from a checking account to pay for the charges made. A secured credit card is a card in which the Canadian banks who offer secured credit cards will extend you a credit line but will require you to deposit cash or other valuable assets to "secure" the credit line repayment. If you have no credit history, have bad credit history from a prior bankruptcy or defaults in payment or have recently relocated to Canada even with good credit history, you may need to obtain a secured credit card from a Canadian Banks Who Offer Secured Credit Cards to begin building a credit profile.

Secured and unsecured credit cards look the same to the merchants you present the card to for transactions. On both types of cards, the Bank trusts you to pay either in full or a minimum payment in accordance with the Terms and Conditions of usage of the card. The difference is that with a secured credit card, you will be required to deposit a certain amount of money with the Bank which often is equal to your credit line. If you default in payment, the Bank has the right to set off the amount in your deposit account to pay the credit card. Although credit cards are issued by virtually all Canadian financial Banks, they may or may not be certain Canadian banks who offer secured credit cards.

You can check on banking websites to search for and apply for secured credit cards. Capital One Canada is one Bank as an example that issues a secured credit card. The amount of money you deposit will often start with a few hundred dollars and you will have a credit line up to that amount until you build a credit history with the Bank. If you have no cash to deposit, a Bank may also accept stocks, bonds or other assets to secure the credit line. The Bank is not required to give you a credit line up to the value of the security you are required to deposit.

After maintaining a Secured credit card and paying on time, you may find you have improved or created a credit history sufficient to apply for an unsecured credit card. If you qualify, you can cancel the secured card and the Bank will return the security you posted for that credit line.