What to Do If You Get Denied for a Secured Card

Getting denied for a secured credit card can feel like a major setback especially when you’re trying to rebuild or establish credit. After all, secured cards are often advertised as the easiest type of card to get. But the truth is, not everyone is approved, even when putting down a cash deposit.

If you’ve recently been turned down, don’t panic. This guide will walk you through the common reasons why applications are rejected and what you can do next to keep your credit-building journey on track.

Why Would Anyone Be Denied for a Secured Card?

A secured credit card isn’t a guaranteed approval just because it requires a deposit. Issuers still evaluate your credit history, income, and identity before accepting your application.

Here are the most common reasons people get denied:

1. Recent Bankruptcy

If you’ve filed for bankruptcy within the past few months or have an open bankruptcy case, most credit card issuers will deny your application. Some secured card issuers require at least 12–24 months post-bankruptcy discharge before approval.

2. Unverifiable Identity or Address

To comply with federal laws (like the USA PATRIOT Act), banks must be able to confirm your identity. If your Social Security number, address, or ID documents don’t match or verify properly, your application may be denied.

Make sure your:

Government-issued ID is current and matches your application
Address is not a P.O. box (some issuers don’t accept those)
Name matches your credit profile exactly

3. Too Many Recent Applications

Applying for multiple credit accounts in a short time can trigger red flags for lenders. Even though secured cards use “soft” inquiries with some issuers, others may run a hard pull and see too many recent inquiries as risky behavior.

4. Outstanding Debts or Collections

Some banks will check for open charge-offs, collections, or unpaid bank accounts. Even though you’re offering a deposit, they may view these as signs you’re not yet ready to manage new credit.

5. Low or Unverifiable Income

Even for secured cards, issuers want to be sure you can pay back what you charge. If you don’t report income or if what you list can’t be verified — your application may be declined.

6. History of Bank Fraud or Closed Accounts

If you’ve had a bank account closed for misuse, bounced checks, or reported fraud, this can disqualify you from getting a credit card with that same institution.

What to Do Right After a Denial

First, don’t apply again right away. Instead:

Review the denial letter or email — it must explain why you were denied, per the Fair Credit Reporting Act (FCRA)
Check your credit report — you’re entitled to a free copy within 60 days of denial
Look for errors or outdated information that might have influenced the decision
Wait at least 3–6 months before reapplying, depending on the reason for denial

Understanding the cause of denial is the first step toward fixing it.

Best Alternatives to Secured Credit Cards

If you were denied a secured card, all is not lost. You have other options for building or repairing your credit some of which don’t involve a credit card at all.

1. Become an Authorized User

Ask a family member or trusted friend to add you as an authorized user on their credit card. Their positive payment history and utilization can help boost your credit even if you never use the card yourself.

Just make sure:

The account reports to all three credit bureaus
The primary user pays on time and keeps a low balance

2. Try a Credit Builder Loan

Credit builder loans are offered by credit unions and online lenders. You “borrow” a small amount (typically $300–$1,000), which is held in a savings account while you make monthly payments.

Once you’ve paid it off, you get the money and a solid credit history. These loans are ideal if you can’t qualify for a card but still want to demonstrate reliable behavior to lenders.

We’ll cover this more in the next article.

3. Open a Secured Account at a Credit Union

Credit unions are often more flexible than big banks. Some offer secured credit cards or loans with lower requirements and manual underwriting, meaning they may consider your full financial picture not just your credit score.

Look for community credit unions or online ones like:

Self-Help Federal Credit Union
DCU (Digital Federal Credit Union)
Alliant Credit Union

4. Use a Rent or Utility Reporting Service

Services like Experian Boost, LevelCredit, or eCredable Lift allow you to report on-time rent, phone, and utility payments to credit bureaus. While they don’t affect all versions of your credit score, they can improve certain ones — especially VantageScore models.

5. Apply With “Second-Chance” Card Issuers

Some lenders cater specifically to credit newbies or those recovering from financial setbacks. Examples include:

OpenSky® Secured Visa® Credit Card (no credit check required)
Chime Credit Builder Visa® Credit Card (requires Chime account and direct deposit)
Grow Credit (build credit by paying for subscription services like Netflix)

These don’t guarantee approval but offer easier entry points than mainstream banks.

Don’t Give Up — Build Your Credit Another Way

Being denied for a secured card can feel like a door slamming shut. But it’s really just a sign that you need a different path for now.

Credit building is a marathon, not a sprint. Even if you’re not starting from the best place, every on-time payment and smart decision puts you closer to long-term financial freedom.

And once you get a clearer picture of your credit, you may find better options than you thought possible.

Curious about one of the best secured card alternatives? Up next: Credit Builder Loans: What Are They and Are They Worth It?