Rebuild Credit With a Citi Secured MasterCard
When it comes to secured credit cards, the Citi Secured MasterCard is one of the good guys. You’ll see why this is a good card for consumers with bad credit when we get to the rates and fees.
My only complaint is that the terms and conditions (T&C) are hard to get. I couldn’t find the credit card agreement online. And unfortunately, you’re expected to go to your local Citi branch to get the T&C.
Normally, making the T&C difficult to obtain would make me suspicious. But this is a really good card. So I suspect that the hard-to-get nature of the T&C suggests that they don’t approve everyone for the card. Don’t let that scare you off, though, unless you have a recent bankruptcy on your credit report.
This secured credit card operates a little differently when it comes to the security deposit. Your credit limit will equal the amount of your deposit, and the deposit can range from $200 to $5,000 (in increments of $100 only ). Here’s the twist: Citibank invests your deposit in an 18-month Certificate of Deposit (CD) savings account. You’ll earn 1.01 APY (annual percentage yield) on your deposit.
Granted, that’s not a ton of interest, but I like the approach. And your money isn’t just sitting there. If you use the card responsibly during the 18 months, the brochure for this card says you get an “opportunity to advance to an unsecured credit card.” No promises, of course, but the opportunity exists and that’s a good thing.
Rates and Fees
I reviewed this card a year or two ago, but given the changing nature of credit cards, I didn’t want to give an opinion until I saw the current terms. Not much, if anything, has changed.
APR: You get a variable rate of 18.24 percent.
Balance Transfers: There isn’t a zero percent intro offer. Unless you’re offered a promotional rate, the balance transfer APR is a variable 18.24 percent. The transfer fee is 3 percent.
APR for Cash Advances: You get a variable 25.24 percent. The transaction fee is 5 percent. Interest on a cash advance starts ticking right away. If you’re desperate for cash, explore all other options first.
Annual Fee: You pay $29 per year.
Foreign Transaction Fees: It’s 3 percent.
Credit Limit: As I already pointed out, your limit will be equal to your deposit amount.
The Bottom Line
This is a very good option for anyone who has bad credit. The issuer reports your credit history to all three major credit bureaus, and this is critical because it helps you rebuild your credit. This card also offers you a decent interest rate, interest on your deposit, and a chance to graduate to an unsecured credit card. If you apply for the card, it takes about four weeks to process your application. Just letting you know that it takes a while to get this card.
Tags: Annual Fee, Balance Transfers, Certificate of Deposit, Citi Secured Mastercard, Credit Limit, Rebuild credit, Secured Credit Card, Secured MasterCard, Security Deposit, Terms and Conditions, Three Major Credit Bureaus