Prepaid secured credit cards can be excellent tools for a person with a low credit score. Secured cards are designed to give people with poor credit the opportunity to re-establish themselves through timely payments. Prepaid secured credit cards work exactly as regular credit cards work. Cardholders can use them with millions of online and physical retailers that accept Visa and MasterCard cards.
However, the cardholders must first provide the card company with a security deposit that will equal their credit limit in most cases. The credit card company reports timely payments to all three major credit bureaus. Eventually, the card company returns the deposits, and some companies issue unsecured cards to faithful payers. The following are five popular secured credit cards:
US Bank LANPASS Visa Secured
The US Bank LANPASS Visa Secured card is an excellent option for consumers who would like to earn bonus miles. The card offers 1 LANPASS mile for every dollar the cardholder spends, and new cardholders receive 5,000 miles upon account opening. The card has no annual fee for the first year. After the first year, the annual fee increases to $25. The APR for the card is 22.99 percent.
National Bank of Commerce Secured Visa
The National Bank of Commerce Secured Visa does not offer rewards, but it has a fair interest rate of 17.99 to 21.99 percent. The card requires an initial deposit of $300 to $5,000, and the cardholder can move to an unsecured card after 15 months of faithful payments. The APR for the card is 17.99 percent.
Wells Fargo Secured Visa Card
The Wells Fargo Secured Visa Card requires a deposit of $300 to $10,000, and the annual percentage rate on purchases is 18.99 percent. The annual fee is $25. Wells Fargo reviews secured accounts for unsecured status periodically.
Capital One Secured MasterCard
Capital One will issue a consumer a $200 credit line with a security deposit from one of its three tiers. The card company will ask the consumer for a $49, $99 or $200 security deposit depending on the person’s credit score and history. Capital One may review the cardholder’s payment history and issue a credit line increase after time passes. The annual percentage rate for the Capital One Secured MasterCard is 22.9 percent, and the annual fee is $20. The maximum credit line allowable for the card is $3,000.
OpenSky Secured Visa Credit Card
The OpenSky Secured Visa Credit Card is a low-APR option for consumers with poor credit scores. The company asks for an initial security deposit of $200, and it issues the consumer a $200 credit line. The card company reports all payments to the three major credit bureaus each month. The annual fee for the OpenSky card is $29. The APR is only 17.5 percent. However, the OpenSky Secured Visa Card offers no option for a future unsecured line.
Secured cards give consumers a helpful option to turn their credit scores around over time. Many options are available from which the consumer can choose.