The card offers an adjustable credit limit feature that you can’t find on others secured credit cards, and it’s also the rare credit card these days that allows you to open a joint account. In addition, like other good secure cards, it has a $ 0 annual fee, offers an upgrade path and reports to the three major US credit bureaus.
Still, there are a few caveats to be aware of, including a relatively high minimum deposit requirement and pesky hidden fees.
Here are five things to know about the Visa® Secure Builder Credit Card of the Armed Forces Bank:
1. There is no annual fee, but there is another type of fee to watch out for
The annual membership fee for the card is $ 0, which is an ideal feature for a secure card. But that’s not the whole story.
This is because cardholders will owe $ 4.50 per quarter unless they sign up for electronic statements. All in all, if you opt for paper statements, you would pay $ 18 per year to hold this card.
2. The deposit required is high, although your credit limit is adjustable.
Like other secured credit cards, this one allows you to make a deposit and then spend up to that limit. In this case, you need to deposit at least $ 300 into your Credit Builder savings account, which is quite high compared to other secured cards.
Minimum deposits required for both Discover it® secure credit card and the Citi® Secured Mastercard® are $ 200, for example. And with the Capital One Platinum Secured Credit Card, if you qualify, you can get a $ 200 line of credit with an initial deposit of $ 49, $ 99, or $ 200.
However, unlike all of these cards, your credit limit with the Visa® Secure Builder Credit Card is adjustable. You can increase your credit limit by adding funds (in increments of $ 50 or more) to the savings account you created for the card, up to $ 3,000.
Usually, other secured cards either do not allow this or require you to request a credit limit increase.
3. You can optionally switch to an unsecured card
Not all secure cards offer a clear upgrade path to a “normal” unsecured credit card, but this one does. The Armed Services Bank notes that “with good performance” you can graduate from the Visa® Secure Builder Credit Card to an unsecured product, that is, an “ordinary” credit card that does not require a security deposit. (The bank also offers the Unsecured Armed Forces Visa credit card, which charges no annual fee and has a credit limit of up to $ 10,000, but no rewards.)
An upgrade path is an ideal feature in a secured credit card because in such cases your deposit is usually refunded to you and you don’t need to completely close your old card and open a new one.
4. Your deposit earns interest, but very little
Your deposit into your Credit Builder savings account is earning 0.05% at the time of this writing. This means if you deposit $ 500 into the account, over a year it will only earn a quarter.
5. The card allows joint account holders
Many card issuers do not allow joint account holders on credit cards, so if you are looking to jointly own a card with someone, this could be a reason to get that card. To open a joint account, both people must complete the card application.