Posted by: John S Kiernan

Rating: 4 / 5

The Verdict: We gave the Open Sky Secured Visa Credit Card an above-average rating not because of its fee structure or other account terms, which aren’t particularly impressive, but rather because it’s characterized by a very unique feature: no credit check. That means you can get it and thus begin the credit-improvement process no matter what storm clouds may be hanging over your finances. And in that sense, the Open Sky Credit Card truly lives up to its name. In return for a chance at finding clearer financial skies, you’ll have to pay a $35 annual fee and place a security deposit of at least $200 — both reasonable but not exceptional price points.

A number of cheaper options are available, including a few with no annual fee, which means opening the Open Sky Visa would require you to open your wallet a bit wider than necessary. With that being said, annual fees aren’t the only thing that you should take into account when comparing secured credit cards, so you’d be wise to check out the rest of this in-depth review, including how Open Sky stacks up to its competition, below.

The Highlights

• No Credit Check: It might be hard to believe, but it’s true. Open Sky will not review your credit history when you apply for your card. Instead, Open Sky will merely verify your identity using your name, address and Social Security number. Bad or no credit generally won’t stand in your way in terms of getting any secured credit card, but this obviously takes things a step further. Not only does it emphasize the lack of a minimum creditworthiness requirement, but it also means you won’t have to deal with the temporary damage to your credit standing that can accompany a hard credit inquiry.

  That, at the very least, makes Open Sky Secured an excellent fallback option if you get turned down for a card with higher standards and don’t want another inquiry on your record. The lack of a credit check could also be your saving grace if you recently went through bankruptcy or owe back taxes. Many credit-card offers, even the secured variety, explicitly state that applicants in both categories are ineligible. 

• $35 Annual Fee: Open Sky’s $35 annual fee is about average for a secured card, according to WalletHub data, and is by no means expensive when you consider the overall value of credit improvement. But it is $35 more than some secured cards charge, which must not be forgotten. 

• Below-Average Regular APR: Yes, the Open Sky Secured Card’s 17.89% interest rate is below the 18.65% secured-card average, according to WalletHub’s latest Credit Card Landscape Report, but that still doesn’t mean you should ever carry a balance from month to month. Just think of it this way: Carrying a balance on a secured card basically amounts to charging yourself to use your own money, considering that your credit line is self-funded. So strive to enjoy this particular benefit on an emergency-only basis. The goal is to improve your credit, not to finance large purchases. 

• $200 Minimum Deposit: Secured credit cards are the best credit-(re)building tools available because even folks with significant credit damage can get approved and some offers are free to use. They also report account information to the major credit bureaus each month, thereby devaluing previous mistakes or filling out a thin credit file. However, it can be difficult to come up with the cash needed to place a deposit, especially when the minimum is $300 or more.

  In this respect, Open Sky Secured makes things easy on you, allowing you to open an account with as little as $200. It isn’t the only secured card with such a low deposit, but there aren’t too many others, either.

The Lowlights

• $25 Credit-Limit-Change Fees: During the first year your account is open, you will be free to add to your security deposit as you please — up to a maximum of $3,000 — thus helping your credit score via improved credit utilization. But when the second year rolls around, you will have to pay a $25 fee to either add to or withdraw from your deposit.

  That’s just not right, considering that it’s your money at play and you have assumed all of the issuer’s risk of nonpayment. And it’s why you should try to keep this card for no longer than 12 months.

• 3% Foreign-Transaction Fee: The Open Sky Card makes a terrible international travel companion, costing you an extra 3% on every transaction processed abroad. But a no-foreign-fee card actually makes the best company, saving you up to 11% on currency conversion.
• Inactivity Fees: If you don’t use your account for 12 months, your account will be closed and the issuer will attempt to return your security deposit, less any balances and finance charges, to your last known mailing address. If unsuccessful — that is, if the check is returned undeliverable to Capital Bank — the money will be redeposited into your account and a $10 inactivity fee will be subtracted from the balance each month. After 36 months of inactivity, a $10 monthly dormant-account fee is added, drawing down your balance until any remaining amount is returned to your state as uncollected property.

Other Things To Consider

• Multiple Ways To Deposit: You have four options in terms of funding your refundable security deposit: 1) debit card/bank transfer; 2) wire transfer to Capital Bank; 3) Western Union money transfer; and 4) mail a check/money order. 

• No Overlimit Fee: Capital Bank won’t charge you if you spend more than your available credit. But this benefit is dampened somewhat by the fact that the issuer likely won’t approve most purchases that would exceed your limit. Plus, you have to actively opt in for the ability to outspend your limit for an issuer to charge you. And a credit card’s overlimit fee can’t be higher than the amount by which you overspent.

  But it’s the thought that counts, right? And this could conceivably help you in an emergency situation, so it’s certainly not a negative. 

• Limit-Increase Uncertainty: With most secured credit cards, you can simply increase your credit limit by adding to your security deposit. But it doesn’t seem to be that simple with Open Sky. You first have to submit a request to customer service, and then your case will somehow be reviewed. If the request is approved (based on what is unclear), you’ll be given instructions for how to add to your original deposit.

  You should therefore keep a close eye on your credit score after using this card for six months or so without issue. This will help you determine when you’re ready to graduate to a cheaper card that provides either more deposit flexibility or an unsecured credit line. You can track your credit score for free using WalletHub — the only site to offer free daily updates. 

• Currently Not Chip-Enabled: The Open Sky Secured Card currently does not come with an embedded computer chip, but that shouldn’t worry you too much. Most cards are adopting this new security standard, which means you’ll likely be issued a chip-enabled replacement in the near future, and all credit cards offer blanket $0 liability guarantees for unauthorized transactions. So your wallet’s safe even without a chip card. 

• Costly Cash Advances: In addition to a fee of $6 or 5% of the amount you withdraw, whichever is higher, Open Sky’s regular 17.89% APR for cash advances will immediately begin to accrue. That makes such transactions quite expensive and explains why they should be done only in emergencies. 

• Garnishment Fee: If a court-ordered wage garnishment or bank-account levy gives debt collectors access to your secured-card deposit, Capital Bank adds insult to injury with a fee of $150 per “incident,” according to the Open Sky Card’s terms and conditions.

Compared To The Competition

  To help clarify the Open Sky Visa’s place in the secured-card hierarchy, we compared it to five popular alternatives in terms of six factors that collectively speak to an offer’s overall value. You can find the results in the following table.  

	Open Sky Secured Visa	Citi Secured MasterCard	Discover it Secured	Wells Fargo Secured Visa	Capital One Secured MasterCard	Harley-Davidson Secured Visa
First-Year Annual Fee	$35	$25	$0	$25	$0	$0
Subsequent-Year Fees	$35	$25	$0	$25	$0	$0
Security Deposit Required For $300 Credit Line	$300	$300	$300	$300	$49, $99 or $200	$300
Min/Max Credit Limit	$200 to $3,000	$200 to $5,000	$200 to $2,500	$300 to $10,000	$200 to $3,000	$300 to $5,000
Ongoing Rewards	None	None	2% on first $1,000 of combined restaurant and gas-station spending 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
Regular APR	17.89%	22.49%	23.49%	19.49%	24.99%	23.49%
Editors’ Rating	3 Stars	3.4 Stars	5 Stars	3.5 Stars	5 Stars	5 Stars
Overall Winners	Capital One Secured Credit Card        Discover it Secured Credit Card

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