August 22, 2015

Best Bank Secured Credit Cards for People with Bad or No Credit

Bank secured credit cards are issued when customers make deposits. For instance, a $200 deposit could be equal to a $200 line of credit. It is a good option when you want to rebuild a bad credit, improve your good credit rating, or get all the benefits of a credit card without a credit check.

Secured cards can be used to make online purchases, make hotel reservations and rent cars. As you make the monthly payments, your credit rating will improve since your transactions are reported to all three major credit bureaus in most cases.

Since the card issuer is taking little risk, secured card applications are most often approved. Once a cardholder shows a strong payment record, the issuer of the card may extend the credit limit beyond the amount of the deposit.

Individual Secured Credit Cards:

First Progress Platinum Prestige MasterCard Secured Credit Card: This card distributed by Synovus Bank is available only to residents of the U.S., and you’ll need to check that it is available in your state. Payment records are reported to all three major credit bureaus. The card offers no rewards, but there are no penalty fees and there is a 25-day grace period before interest begins to accumulate.

Capital One Secured Master Card: This card is designed for people looking to rebuild, improve or establish credit. Your credit progress is reported to all three major bureaus, and there are online tools available that will allow you to monitor your credit score.

Applied Bank Secured Visa Gold Preferred Credit Card: This card offers a path to building and rebuilding credit, it reports to two of the three major credit bureaus. Your credit progress will be reported to Experian and TransUnion credit bureaus. No credit check is required for applicants. Keeping track of scheduled payments is paramount because this card offers no grace period for payments, so you will begin accumulating interest as soon as you make a purchase.

Rates and Fees:

The First Progress Platinum Prestige MasterCard Secured Credit Card comes with a variable 11.99% APR. (No balance transfers.) When compared with other secured cards this is a favorable interest rate. The APR for cash advances is 18.99%, and the annual fee for this card is $44. There is a fee for late payment that can be as high as $35, depending on your previous payment record.

Capital One Secured Master Card has an annual fee of $29 and a late payment fee of $19. The charge for a returned check can be as much as $35. New purchases and balance transfers have a variable APR of 22.9%.

Applied Bank Secured Visa Gold Preferred Credit Card has an annual fee of $50, which is a bit higher than the annual fee charged for most secured cards. On the other hand, the APR for purchases is 9.99%. This APR also applies to cash advances, which carry a 5% transaction fee, but remember that the interest starts adding up as soon as the transaction is recorded to your account. Balance transfers are not allowed. There is an additional card fee of $30 annually.

There is no charge for exceeding you credit limit, but if the account does exceed the limit the cardholder may be required to repay the excess immediately, and in full. Any increase in your credit limit may be accompanied by a fee to enact the change.

Security Deposit and Credit Limit:

First Progress Platinum Prestige MasterCard Secured Credit Card requires a minimum deposit of $300 and the maximum is $2,000. The maximum can eventually reach $5000 if cardholders remain in good standing. No interest is earned on the deposit. 

Capital One Secured Master Card has a $200 minimum credit limit. However, if you qualify you do not have to make the full $200 deposit to receive the card. You could be allowed to deposit as little as $49 to receive the minimum $200 limit. Applicants with bad credit will have to make the full deposit. The maximum line of credit is $3000. No interest is earned on the security deposit.

Applied Bank Secured Visa Gold Preferred Credit Card has a minimum deposit requirement of $200. The maximum deposit is $5,000, and no interest is earned on the deposit.

In most cases, or at least in many cases, the annual fees on secured credit cards will be deducted from the original deposit. Thus, if you make an initial deposit of $200 and the annual fee for your account is $50 then your actual available credit will be $150.

The fees above for our selection of top secured credit cards are partial. You must read the entire credit card agreement to learn all of the possible fees and penalties associated with each secured bank credit card. While these are good cards to rebuild credit or get back on track for people with bad credit, you’re still responsible in reading the fine print to choose the best secured credit cards that fits your lifestyle well.