When this blog first started covering credit cards, we focused on secured credit cards because I was unhappy with the coverage on other sites. The focus on this site has shifted considerably, but I still cover these secured cards occasionally. You are probably familiar with the prepaid cards that GreenDot offers, but they recently introduced a secured card as well so let’s have a look at the basics.
Contents
The Basics
- Annual fee of $39
- Credit limit of $200 – $1,000 (this is based on how big your security deposit is. If your security deposit it is $500 then your credit limit will be $500)
- Ability to add to security deposit to increase credit limit
- You can also make your initial security deposit or additional deposits in select stores, but there is a $4.95 fee (maximum deposit is $500 at all stores apart from Walmart where you can deposit $1,000)
- Card does not graduate you a unsecured card
- Can check to see if you’re pre-qualified without impacting your credit score
- Security deposit does not earn interest
- Reports to all three credit bureaus
Our Verdict
There are a few key things you want to look for when you need a secured credit card. You want a card with no fees (as chances are you’re already under financial pressure or have been in the past and let’s face it, nobody likes paying fees unless you have to) and you also want a card that will graduate to an unsecured card, that way you can get your security deposit back without having to close the card. That means you’ll continue to build account age with that account (rather than it falling off your report in seven years), something that helps your FICO score.
It’s also a plus if the card earns rewards. Another reason why I stopped writing these secured card reviews is that the Discover it Secured card is just significantly better than all of the other cards in this market segment. It graduates to an unsecured card, doesn’t have any costly fees and has a great rewards program (2% cash back on all purchases for the first year).
If you’re considering this GreenDot card, I’d urge you to get that card instead. Also keep in mind that unlike other sites, we don’t use credit card affiliate links so we are able to provide you with unbiased advice rather than recommending cards that pay us the most!
