Orchard Bank Credit Card Review: The Best for Bad Credit - NerdWallet
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Orchard Bank Credit Card Review: The Best for Bad Credit

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Aw Nerds! This card is no longer on the market. See our Best Secured Credit Cards page for other options.

Once upon a time, the Orchard Bank credit card was our favorite choice for bad credit. With a low APR and very reasonable fee chart, it was, without a doubt, a top secured credit card. Unfortunately, the Orchard card is being discontinued. It’s a sad day at NerdWallet as we bid farewell to one of our oldest, most trustworthy friends. While you can never truly fill the gap left by a close pal, we realize the need to move on and find a new BFF. For folks trying to rebuild bad credit, allow us to introduce the Capital One® Secured MasterCard®. We think you’ll like him.

The Capital One® Secured MasterCard® is an excellent credit building tool. It MIGHT even be a little better than the Orchard Bank card, but don’t tell Orchard we said so. The cost is low and the terms are great. Even with an abysmally low credit score or a recent bankruptcy on your record, you can still qualify. Let’s take a look at the details and see how the Capital One® Secured MasterCard® stacks up against its predecessor.

Why we dig the Capital One® Secured MasterCard®

Let’s start with the most important aspect: cost. This guy is cheap. Seriously. The Orchard Bank card was good at $35, but the Capital One® Secured MasterCard® is even lower at $0. As far as secured credit cards go, you’ll be hard-pressed to do better.

Secured credit cards require you to put down a security deposit before you can spend. The deposit sets your credit limit and ensures the bank won’t lose money from missed payments. Generally, if you put down $200, you’ll start with a $200 credit limit. If you put down $300, you’ll start with a $300 credit limit (and so on). One of the cool features about the Capital One® Secured MasterCard® is you don’t always have to put down a full deposit. Depending on your credit, they’ll ask you for $49, $99 or $200. Regardless of your minimum, you’ll start with a full $200 limit. If you so choose, you can then deposit more money to increase your limit (up to $3,000). Eventually, you’ll qualify for a better card and be able to close your account. When you do, all money you’ve deposited will be refunded.

APR is where Orchard clearly had the competition beat. It was only 7.99%, which is sort of unbelievable. The Capital One® Secured MasterCard®’s APR is a bit higher: The ongoing APR is 24.99% (Variable).

Don’t like Capital One’s fees? Just wait till you see the other guys

When hunting for a credit card to build or rebuild credit, be smart and guard yourself against predatory offers. People with poor credit are often targets of scams and bogus deals. However, don’t assume you’re without options. Feel free to shop around. Just please be careful. Another great secured card is the Citi Secured MasterCard. Like the Capital One® Secured MasterCard®, the Citi Secured MasterCard’s annual fee is $25. Its APR is a bit lower than Capital One’s offering.

All in all, they are very similar cards. Even though it has a slightly higher APR, we prefer the Capital One® Secured MasterCard® because of its partial security deposit option. Additionally, if you can’t pay the whole deposit upfront, Capital One allows you to pay in installments with its card. As long as the whole amount is posted within 80 days, you’re set.

Now let’s take a look at some less-than-savory cards. When you’re looking for a credit card straight after bankruptcy or when burdened with a dreadful credit score, you should first  learn what is reasonable and what is absurd. You should expect a few small fees and a security deposit around $200-$300. Stay away from offers that sound too good to be true.

To put the Capital One® Secured MasterCard® into perspective, take a gander at the Aventium and Centennial credit cards from First Premier Bank. These abominations offer a $300 line of credit with a $95 security deposit. There’s a $75 first-year annual fee, a $6.50 monthly fee that kicks in your second year, a $45 annual fee on top of the monthly fee and a $3.95 fee to use First Premier’s online services. Want to know the APR? You probably don’t. It stands at a staggering 49.99%. Holy inconceivable interest rates, Batman!

Then there’s the Platinum Zero from Applied Bank. It has a good pitch going: 0% APR, even if you’re late on a payment; no application fee; and a “choose your own credit limit” feature. Alluring. BUT… fees. More precisely, $119 a year. Interest-free borrowing is certainly enticing, but the cost is untenable.

As you can see, secured cards are the pits. Stick with a name you can trust, build your credit quickly and graduate fast to an unsecured card. The Capital One® Secured MasterCard® is your best bet. There are no gimmicks, no tricks, no buffoonery. Just $29 a year with a $49-$200 refundable deposit.

 Should you get a secured card?

Folks with less-than-pristine credit histories may not quite qualify for a no-fee or rewards credit card. Secured credit cards are for establishing credit. Eventually, you’ll be able to move on to a regular card with no annual fee (if you choose) and lower interest rates. To this end, the Capital One® Secured MasterCard® is a good, well-rounded option. Yes, paying a security deposit isn’t much fun. But remember, Capital One may let you get away with a lower deposit, and they’ll give you 80 days after approval to come up with the money.

The most important thing to remember with a secured credit card? Make payments on time. We’re not kidding. Make payments, build credit. It’s that simple. Miss payments, and your credit will worsen. If missing a payment is a real possibility, you may want to re-think getting a credit card. Stick with a checking account until you’re sure. Checking and debit won’t raise your credit score, but you really don’t want a credit card you can’t pay.

Secured credit cards and prepaid debit cards: a background

There are two common alternatives to the traditional credit card, and neither is particularly appealing: secured credit cards and prepaid debit cards.

Regular Credit Card Secured Credit Card Prepaid Debit Card
Improves Credit Score Yes Yes No
Upfront Deposit No Yes Yes
Line of Credit? Yes Yes No

A secured credit card demands upfront collateral often equal to your line of credit. The deposit is returned when you finally close your account. In the meantime, you still have to pay interest on purchases if you carry a balance month-to-month. Secured cards often come with a fee or two. Annual fees are a given. Once in a while, you’ll see a processing fee, too. Fortunately, a secured credit card does build your credit score. With good behavior, you can eventually qualify for a regular, unsecured credit card.

Prepaid debit cards are similar in that you have to deposit money up front. But once the money is down, it acts just like a standard debit card. You aren’t technically “borrowing” money – you can only spend what’s in your account. When you run out, you have to reload. Unlike a secured card, there’s no credit line. Prepaid does not build credit. It will not help you qualify for a regular credit line. It’s exactly like a checking account but with a brutal fee system. You can expect monthly maintenance fees, ATM fees, reload fees and even usage fees for many cards.

In case you haven’t drawn the correct conclusion, we’ll help you out. Stay away from prepaid. Get a secured credit card if you want to build credit. Get a checking account and debit combo if you’re just looking for a piece of plastic.

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  • Saffrondorothy

    just make sure you call in your payment with a debit card other wise if you pay your credit card through a standard checking/bill pay you don’t receive credit for your payment for up to two weeks-not a good thing

    • Pinkypaul

      i have had my orchard credit card for about a month. its a 300 dollar credit which i maxed out right away, then paid off right away. but since i am a first time user with this company, and it was a big payment, they still have not processed my payment and im without new credit. today is, 13MAY12 and my payment was accepted on 04MAY and i am still waiting. this is the only thing that upsets me. and the customer service person was thankful of paying my bill in full, but said could nto nothing to get my credit faster. why is this?

    • Dallaskent

      I am having that problem. I called and was informed that takes an average of 10 days after receiving the payment that the account gets credit. That is just plain ridiculous.

  • Morleyone

    Usually, applying for a credit card temporarily hurts your FICO score, but Orchard does it in such a way that your application doesn’t affect it.

    What??? How do you explain that! Why don’t they all do it like Orchard?

    Sounds interesting

    • http://www.nerdwallet.com/ NerdWallet

      So what Orchard does is that they basically put you through an application process where they decide which card you’ll be approved for. Then, knowing that you’ll probably be approved for it and that you’re interested, they do the same thing that people who mail you credit card offers do: they pre-approve you, which doesn’t count against your score, since credit cards do it all the time without your knowledge.

      • Morleyone

        Aha! Thanks for the quick reply, love the site

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  • Sarahmartin297

    I applied and was approved for the secured card and told to fill out app, wait for a deposit Account Opening Kit, then I must mail in my deposit. This worries me, I don’t know much about this company and I’m not comfortable with just mailing in $200 to a random company.. Also, it says it could take up to 30 days; so I will be 30 days without that $200?

    • Jacques

      How long did you wait to get approved?

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  • Sergio

    Capital ONE is a fraud! after I give them my u$1000, took a month to have my card. The bill came first, than my card, can you believe that? and after 2 years I decided to close it and it’s been over 6 months and they haven’t refunded my money, I called them like 10 times, they put me on hold, just to tell me “the check it’s on his way” .Only bull…t !! Avoid that fraudulent CAPITAL ONE!

    • Daphne Fortune

      If any credit card company gives you the run around sending you your card refund you should write a letter to the credit card company and to the BBB. The BBB will investigate the problem.

      • dugd

        No, simply no. The BBB is a nonprofit organization composed of voluntary business owners. Its official mission is self regulation and promotion of local businesses, however it really is just a club much like the chamber of commerce where local good ol boys socialize and drink while glad handing each other.

        Believing that the BBB could help someone with a dispute with a national credit card company is as ludicrous as believing that your local Elks lodge or Lions Club could help you get the money back. If this has really happened, the victim needs to consult an attorney, not a social club.

    • Qreus C Rebldr

      Did you get your money back? I’m trying to rebuild credit and have been lead to believe Cap1 is the best option before getting an unsecured card, car home etc.

  • Bjfrye2

    How long does it take to improve the credit to apply for an unsecured credit card?I only want a small credit limit like $800.00.

  • Spazzcornhuskers

    i got the first premier bank card, i had capitol one before and didnt like them at all. actually i am only having to pay a 75processing fee, in which i have it scheduled to come out of my account in about a week. they were awesome and had sent me my card in which i suspected for me to receive after they received their money. in which obviously, once my payment posts i will then get to use the card. but i see that a few credit card companies are delaying on sending the cards and making u pay the money first and then processing up to a month to receive the card, thats why i refused to go with orchard…i wasnt going to be out of the 200 bucks for a whole month after reading a few posts on here. i think that capitol one sucks.

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  • http://www.facebook.com/mr.mrs.bishop Collin Ashley Bishop

    so does the 30% rule apply to secured cards say if my credit line 200 how much should i spend????? please help me ash

  • https://www.cardauthorizer.com/merchants-services.html Merchant Services

    I had capitol one before and didnt like them at all. actually i am only having to pay a 75processing fee, in which i have it scheduled to come out of my account in about a week. they were awesome and had sent me my card in which i suspected for me to receive after they received their money. in which obviously, once my payment posts i will then get to use the card. but i see that a few credit card companies are delaying on sending the cards and making u pay the money first and then processing up to a month to receive the card, thats why i refused to go with orchard…

  • jillibeans

    I’m having trouble getting a secured card. What can I do ?

    • typeav

      First Premier, OpenSky, Merrick Bank, OneUnited Bank or First Progress card are the solution to your case.

  • Curator

    People, the point of a secured card is that for those of us who do not have good enough credit YET to get a normal credit card, this gives us the ability to improve our credit score, that way we can then apply for a normal credit card, why is this difficult to get? If you can get a normal credit card, then by all means, do so! however many people cannot, and this is the only way to build credit.

  • Qreus C Rebldr

    Do the Credit card companies control these kind of web forums to lean you toward their cards? I have been trying to find the right card to start rebuilding my credit score. Are there any other sources, real people that have websites with factual examples?

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  • brittany

    even with bad credit u still get denied so all this crap is a lie iv been trying to rebuild my credit and I get denied

  • David R

    after reading all that was said I lmao thank u all for this…lol

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  • Matthew Bonneau

    I have a greendot prepaid card. As long as I deposit 1000 a month or make 30 purchases a month, there is no fee. There are ATM fees, but you can get around these by getting cash back from grocery stores, Walmart, ect.

    • Jeffrey Mele

      no benefit relating to this article, greendot card is a credit card not a debit card, it therefore doesn’t help with credit in any way shape or form.

      • Junior

        GREENDOT: IS a debit card, I have it.

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  • http://www.ghidcumparator.com GhidCumparator.com

    i got my laon approved with orchard bank credit in a matter of a few days.

  • Julian S

    I got the Orchard secure credit card with the idea of improve my credit. Once I got their approval, i sent $1000 as a secure deposit. Then they sent me the card in 1 month . But It never worked. It remained on hold for 1 month and then they canceled it. So they returned my deposit 2 months later but they charged me $39. Now i have an Orchard’s $39 debt in my credit report. An extra negative item.

  • Randy Cochran

    I get turn down for all the cards secured and unsecured and I’m trying to build my credit back up how can I get a card that will help me build it back up that was sent my credit score which is in the low to mid fives

  • chuck_fu

    I have been a Wells Fargo checking account member for 20 years maybe someday I can do a secured card with them but living paycheck to paycheck how I even would sustain $300 is beyond me.

  • Karen Stryker

    I need a secured credit card with an international chip. What are my options?