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Guaranteed credit cards: Features and benefits.

It's hard to get by without a credit card these days. Just try checking into a hotel room or booking an airline ticket without one — you won't get far. Guaranteed credit cards offer guaranteed and near-instant approval, which means Canadians without good credit can enjoy the conveniences of a credit card. If you've experienced bankruptcy, divorce, or another credit-damaging event, a guaranteed credit card can help you rebuild your credit history.

Here's a breakdown of the charges you'd have to pay if you ran a $400 yearly balance on each card:


Home Trust Secured No-Fee VISA.Home Trust Secured VISA.

Interest rate



Annual Fee



Charges on a $400 monthly balance



Total charges for the year



Better deal?

In this case, yes. The $0 annual fee offsets the higher interest rate, making this card a better deal.

Not in this scenario. This credit card has a lower interest rate, but the annual fee makes it more expensive.

If you run an annual balance of $400, the math is close. That means finding the best guaranteed credit card really depends on how much credit you expect to use. So what's better for you — a lower annual fee or a lower interest rate?

Why choose

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Your guaranteed card questions, answered.

Looking for more credit card info? Check out our Help Centre.

How do guaranteed credit cards work?

You're guaranteed to get approved for a guaranteed credit card, even if you've had credit issues in the past. Apply online or over the phone, and you'll be approved in minutes.

Just remember that guaranteed credit cards may or may not require you to put down a security deposit. It depends on how good your credit is. Once you post your deposit, your guaranteed credit card will work just like a regular credit card.

Who should get a guaranteed credit card?

Anyone who doesn't have a solid credit history. If you've fallen behind on payments or gone bankrupt in the past, a guaranteed credit card can offer you guaranteed approval and a chance to rebuild your credit. Before you know it, you'll be enjoying all the perks of having a credit card again.

Guaranteed credit cards are also a great option if you're an immigrant or temporary resident of Canada. After all, guaranteed approval means you can get a credit card immediately and start building your credit, even if you have no credit history.

What's the best way to build my credit score with a guaranteed credit card?

  1. Pay your credit card bills on time. Your guaranteed card's payment history gets reported to Canada's major credit bureaus every month. That means, if you use your guaranteed credit card responsibly, you can quickly improve your credit score.
  2. Make small, frequent purchases throughout the month and pay off your balance before it's due. Credit experts say this is the fastest way to build up your credit score with your guaranteed credit card.
  3. Keep your credit card balance below the card's total credit limit. A high balance can have a negative impact on your credit utilization ratio (the amount of credit available on a monthly basis).

The credit utilization ratio, or CU ratio, is a key measure of a borrower's creditworthiness. If you've tapped most of your card's credit, your CU ratio will be elevated and credit agencies will see that you've spent all, or most, of the credit available to you, which can hurt your credit score.

Credit card users who want to quickly build their credit score will pay off their guaranteed credit card twice or even three times per month to keep their credit utilization ratio low.

If I have to make a security deposit on my guaranteed credit card, how much will it be?

There's no set amount. Depending on how good or bad your credit is, you might be required to post a deposit ranging anywhere from $50 to $500.

How does the security deposit work on a guaranteed credit card?

If you don't have good credit, some guaranteed credit cards require you to post a security deposit, which the credit card issuer holds as collateral. You can pay the deposit online, over the phone, or in installments, and your card is sent as soon as you fulfill the minimum required deposit amount.

Once you post your security deposit, you get access to a credit line that works like a credit line on any other credit card. Bonus: if you demonstrate good payment habits, your guaranteed credit card issuer may extend you additional credit without asking for more collateral. And if you close your account later, you'll get your deposit back — sometimes with interest.

Is a guaranteed credit card different from a prepaid card?

Yes. Guaranteed cards are true credit cards: you make purchases with funds extended by a credit card issuer. Any security deposit you put down acts as collateral in the event you default.

Prepaid cards are more like debit cards. You spend whatever money you already put on the card. But since you're not borrowing money from the credit card provider, you aren't using credit and you're not building your credit score.

How's a guaranteed credit card different from a secured card?

Guaranteed cards and secured cards often overlap, but there are a few minor differences.

With a guaranteed credit card, you may or may not have to post a security deposit. With a secured credit card, a deposit is always required. Most guaranteed credit cards also don't require a deposit equal to the card's entire credit line. But plain-vanilla secured cards generally do.

For example, a guaranteed card might require a security deposit ranging from $75 to $300, but the card's credit limit will likely vary from $300 to $2,500. If you're approved for a guaranteed card that requires a $75 deposit, your credit limit will be at least $300. On the other hand, with a secured credit card, a credit line of $300 almost always requires a full $300 deposit.

When you compare cards, remember to read the terms and conditions carefully. Some credit card companies use the terms "guaranteed" and "secured" interchangeably, so you may need to dig to find out if there is a difference or not.

What happens to the security deposit on my guaranteed credit card?

Your deposit's held in a separate collateral account. Some credit card providers will even pay a small amount of interest on your security deposit. If that's the case, the interest is usually credited to your account at the end of the month or at the end of the year.

What are the disadvantages of a guaranteed credit card?

Guaranteed credit cards charge higher fees and interest rates than regular credit cards do. The applicants usually have poor or non-existent credit and pose greater non-payment risks to credit card issuers. Issuers charge higher fees to offset this risk.

Guaranteed cards also have low credit limits and few rewards benefits. They're basic, no-frills cards targeted at consumers who need to boost their credit.

What should I look out for in a guaranteed credit card?

Make sure your guaranteed credit card provider reports your account activity to a credit bureau. If the activity on your card isn't being reported, you can't build up your credit score, which is the main reason for getting a guaranteed credit card.

You should also think about the tradeoff between interest rates and annual fees. Guaranteed credit cards with higher fees usually have lower interest rates, but this feature only benefits you if you carry a monthly balance. Consider choosing a card with a low annual fee (or no fee at all), even if it charges a slightly higher interest rate. You should aim to pay off your balance every month anyway. However, if you do think you'll run a balance, a lower interest rate may save you money.

You might have to consider this tradeoff if you're choosing between two very similar guaranteed credit cards that we offer: the Home Trust Secured No-Fee VISA and the Home Trust Secured VISA.

Compare guaranteed credit cards today

Using a credit card responsibly is one of the quickest ways to establish and rebuild your credit. Guaranteed credit cards are a great way for many Canadians to start raising their credit score and achieving better financial security.

Compare guaranteed credit cards right here at

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