Bank Of America Secured Visa Credit Card Review | Best Cards For Credit Repair
Bank Of America Secured Visa Credit Card Review | Best Cards For Credit Repair
There are countless banks that offer secured credit cards. After all, they are a great option for people who have bad credit and can’t otherwise get a credit card. Even if you have just filed for bankruptcy and are having trouble opening a bank account, you can still use the secured credit card loophole to get back into the financial system. Or maybe you have other reasons, such as you have no credit and are trying to get that started. In both cases, a secured credit card is a great option.
Related: Bank of America & ChexSystems
As previously stated, there are a lot of offers for secured credit cards. And should be expected when there are so many participants in a market, said offers vary widely. You are as likely to find an absolutely worthless card that charges you outrageous fees and does little else as you are to find a great card with low fees that totally delivers.
Regardless of the company you get it from, though, all secured credit cards have this in common: a deposit secures the credit limit that is allowed on the card. Your credit line will directly reflect the amount of your deposit; that way, if something happens and you’re unable to keep up with your payments, the bank can use the secured funds to pay off your debt. Some cards match your limit to 100% of your deposit, some others give you a limit that is a bit less that your deposit.
Contrary to a major misconception, you are still required to pay at least the minimum payment before the due date each month: your security deposit does not cover minimum payments.
Now how do you evaluate the offers? Well read on for our take on Bank of America’s secured credit card option.
Pros
- Opportunity to fix your credit. The Bank of America secured credit card offers you a chance to rebuild your credit your credit card activity is reported to the three credit bureaus. Just get the card, use it, and make your payments within the due date, and your credit score will naturally improve. After a 12 month period, you can ask for your collateral to be be released by the bank, and your card becomes an unsecured credit card.
- Reasonable annual fee. Although not at the lower end of the scale, Bank of America’s annual fee is $39.
- Low collateral deposit requirements. While lots of companies require an initial security deposit of at least $500, Bank of America’s minimum deposit is just $300 (although it can go up to $10,000 – twice as high as most other cards). If you’re pressed for cash (which is pretty likely if you have bad credit because of financial trouble), this can be a very important factor.
- Additional cards at no extra charge
- Total Security Protection (prevent identity theft)
Cons
- High interest rate. When you go to the Bank of America website to check out their secured card, it might look like a reasonable interest rate at first glance. However, it’s not the 10.99% variable APR that many some consumers think. If you look closely at the site, it’s a prime PLUS 10.99% variable APR. That means if prime is 7%, your APR is 17.99%, not 10.99%. Standard APR is 20.24%.
- No rewards
- No interest on collateral deposit
- High fees. Balance transfer, wire transfers and cash advances are expensive: not only will you be charged regular interest (cash advance APR is 24.24%), but there is a 4% fee on these transactions, with a minimum fee amount of $10. There’s a 3% fee on overdraft protection transfers, with a minimum of $10; a 3% fee on foreign transactions; late payment fees are $15 if your balance is $100 or under, $29 if your balance is $250 or lower, and $39 if your balance is above $250; returned payment fee is $35
When applying for a secured card it’s important that you make sure the card you choose is the best card for your needs, so it’s always good to compare. Here are a few questions you might consider during your search for a secured credit card:
- Is there a better APR available somewhere else?
- Do I need more flexibility, as far as the amount of your credit line is concerned?
- When can I become eligible for an unsecured card? If I do, what will my APR be?
Verdict
If you won’t be carrying a balance and don’t have any balance transfer or cash advance needs, and you mostly care about repairing your credit, the Bank of America secured credit card is a very good choice. If your needs are different, you might want to take a look at the competition.