Posted by: John S Kiernan

Rating: 3.4 / 5

The Verdict: Placing a deposit on the Citi Secured MasterCard Credit Card is neither an outright mistake nor an ideal decision. You see, it’s a solid credit-building tool with the potential to help you reach a higher credit tier for only $25, as long as you use it responsibly. But that’s $25 more than what certain competing secured cards charge.

So if a low-cost means of credit improvement is what you’re looking for, this middle-of-the-road offer might be for you. The only stipulation is that you can’t have gone through bankruptcy in the past two years. And you can learn everything else you need to know below.

The Highlights

• Relatively Low $200 Minimum Deposit: This secured Citicard’s required security deposit is fairly unobtrusive, at least compared to other offers that ask you to part with $500 or $600. This, in other words, makes credit-improvement more affordable in the short term.

  You’ll get your deposit back (minus any outstanding balance) when you close your account, after all. You can also add to your available credit with subsequent deposits up to a maximum of $5,000, which should help to speed up the improvement process. Just make sure to keep your credit utilization low.

• $25 Annual Fee: It would be hard to consider any fee a highlight, but at “only” $25, the Citi Secured MasterCard’s annual fee is below the roughly $35 charged by the secured-card average, according to WalletHub data. That might help take the sting out of things just a little bit.

The Lowlights

• Expensive Financing: This should be a moot point, as secured-card financing is ill-advised, but this card’s 22.99% APR is well above the 18.65% secured-card average, according to WalletHub’s latest Credit Card Landscape Report.

  Perhaps that will provide a bit of extra discouragement the next time you think about carrying a balance from month to month. The 3% fee for transferring a balance should dispel you of the desire to perform that type of transaction, too.

• Your Deposit Won’t Accrue Interest: It’s not common, but some secured-card issuers place cardholder deposits in an interest-accruing savings vehicle so that funds can at least try to keep pace with inflation. But that’s not the case with this secured Citicard, as your deposit will be stowed in a “Collateral Holding Account” that yields nothing.

• Recent Bankruptcy Disqualifies You: Check your credit report. If it shows a bankruptcy from the past two years, you’ll have to take your credit-building business elsewhere. You can find out which issuers will approve applicants despite a recent bankruptcy in our annual Secured Card Report.

Other Things To Consider

• 3% Foreign-Transaction Fee: If you’re planning to travel abroad or purchase something from an international merchant, this isn’t the card for you. After all, there’s no sense in paying 3% more than you have to.

• Pricey Cash Advances: Although cash advances are never cheap, those done with the Citi Secured MasterCard will be especially expensive, thanks to a 25.74% APR and a fee equal to $10 or 5% of the amount advanced, whichever is higher. The average cash-advance rate is 22.70% and the average fee is 4.01%. 

Compared To The Competition

  Comparison shopping is especially important with credit cards, and the stakes are especially high when you have limited or bad credit. We therefore compared the Citi Secured MasterCard to some of the market’s most notable secured alternatives. In doing so, we assumed a $300 security deposit and the highest APR possible for each card. It’s always best to plan for the worst, after all.  

	Citi Secured Credit Card	Discover it Secured Credit Card	Wells Fargo Secured Credit Card	Capital One Secured Credit Card	Harley-Davidson Secured Credit Card
First-Year Annual Fee	$25	$0	$25	$0	$0
Subsequent-Year Fees	$25	$0	$25	$0	$0
Security Deposit For $300 Credit Line?	$300	$300	$300	$49, $99 or $200	$300
Min/Max Credit Limit	$200 to $5,000	$200 to $2,500	$300 to $10,000	$200 to $3,000	$300 to $5,000
Ongoing Rewards	None	2% on first $1,000 at restaurants and gas stations 1% everywhere else (All first-year earnings doubled)	None	None	3% at Harley-Davidson 2% at restaurants, gas stations, bars and hotels 1% on everything else, including balance transfers
Regular APR	22.99%	23.49%	19.49%	24.99%	23.49%
Editors’ Rating	3.5 Stars	5 Stars	4.4 Stars	5 Stars	5 Stars
Overall Winner	Capital One Secured Credit Card        Discover it Secured Credit Card

 

from Wallet HubWallet Hub


via Finance Xpress