Many loans are secured by collateral, such as those taken out for the purchase of a car or a home. Although, secured credit cards have a bad reputation because of their exorbitant interest rates and outrageous fees but one can opt for this option with a poor credit history.
First priority in shopping for a secured credit card is to stick with a reputable bank and avoid numerous products with high interest rates and unreasonable fees. User should look for a card with low annual fee and perhaps one that might earn interest on the security deposit. All the banks do not guarantee acceptance. So, users with outstanding liens or a recent bankruptcy will not qualify for some of these cards.
There are some of the best secured credit cards currently available:-
- Capital One Secured MasterCard: – Only a few cards extend a credit line in excess of the security deposit. This card provides this option. If a security deposit of $49, $99 or $200 is made, use will be able to get an initial $200 credit line. The standard interest rate of this card is 24.99% variable APR. Like all Capital One cards, there are no foreign transaction fees. Other additional benefits include auto rental insurance, travel accident insurance and price protection. The best part is- there is no annual fee.
- USA Secured Card American Express Card: – It is an attractive option for military members and their family. Bank puts the deposit into a 2-year CD to earn interest. So the growth in security deposit is guaranteed. The standard interest rate varies from 10.15% to 20.15%. There are no extra fees and a low 1% foreign transaction fee. Rental car insurance and extended warranty is provided by this card as well. It also includes free credit check monitoring with Experian for 6 months. The annual fee is $35.
- Citi Secured MasterCard: – In this card, credit line is equal to security deposit. The minimum is $200 and maximum is $5000. Monthly notification to the credit bureaus, Auto Pay, online bill pay and regular alerts are some attractive features of this card. The annual fee is $25 and the variable APR is 22.24%.
- Primor Secured Visa Gold Card : – In this card, the line of credit is equal to the amount of savings (which accumulates interest, but does not compound), anywhere from $200 to $5000. The annual fee is $49 and the APR is 9.99% fixed. This card provides the lowest standard interest rate. However this card also has a lot of fees for various activities on your account. A Classic version of this card is also available with annual fees of $39 and fixed APR of 13.99%.
- OpenSky Secured Visa Credit card : – For this card, the standard interest rate is 17.64% variable APR and annual fee is $35. A credit line increase up to $5000 can get approved at anytime. There is no credit check so no inquiry will affect user’s credit score.