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The Surge Mastercard, issued by Celtic Bank, offers some qualities that may appeal to those seeking a second chance at building credit, but its fees far outweigh its benefits. It offers a pre-qualification process, the chance at a higher credit limit and it reports payments to all three major credit bureaus (TransUnion, Equifax and Experian).
Among credit cards for bad credit, the Surge Mastercard is an expensive option that is likely not sustainable over a long term. You stand to save more money by paying a security deposit on a secured credit card. You’ll get that money back with a good payment history. With the Surge Mastercard, you’ll never get back the ongoing $99 annual fee and potential monthly maintenance fees ranging from $0 to $10. That’s a cost of up to $219 annually in fees alone, and more if you pay interest charges.
Explore this card carefully before applying and learn about better credit card options if you have less-than-ideal credit.
Alternatives to the Surge Mastercard
1. Watch out for potentially expensive fees
The Surge Mastercard's annual fee makes it difficult to justify keeping your account open over time, which is ideal if you want to build good credit. As is the case with any credit card, it can hurt your credit score when you close your account. When you’re building credit, it’s important to preserve the length of your credit history to protect your credit score. That’s not easy to do when your card has an annual fee, especially if it’s dipping into your budget.
Look out for these pricey fees on the Surge Mastercard:
Annual fee: $75 to $99 the first year; after that it’s $99 annually.
Monthly maintenance fee: $0 to $10 per month or up to $120 annually. (This fee is waived during the first year of opening an account.)
Late payment fee: $40.
If you’re also carrying an ongoing balance on the card, the high APR of 24.99% to 29.99% (rate accurate as of August 2021) combined with the fees can make the cost of maintaining this card a burden. You’re likely to get a high interest rate on any credit card that is accepting of bad credit, but combined with pricey fees it can catapult you toward a vicious debt cycle.
Celtic Bank did not respond in time for publication to a request to confirm the specific factors that determine the cost of the monthly maintenance fee and first-year annual fee. The pre-qualification process will likely alert you to terms for the Surge Mastercard and possibly other cards. When making a decision, factor in the annual fee and any potential monthly fees.
“If you can afford to potentially pay over $200 annually for the Surge Mastercard, you’ll save more money by putting that amount toward a refundable deposit on a secured credit card.”
For less fees, instead consider: The $0-annual-fee Discover it® Secured Credit Card has a minimum $200 security deposit requirement, but you can get that money back with a good payment history. If earned, the rewards and sign-up bonus on the secured card can help make up some of the cost of the security deposit. It earns 2% cash back at gas stations and restaurants on up to $1,000 spent in combined purchases each quarter. Plus, you can get a sign-up offer: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
2. There’s the potential for a credit limit increase ...
The initial credit limit for the Surge Mastercard ranges from $300 to $1,000. After six months, you may be eligible for a credit limit increase, which can potentially help your credit score. You’ll have to ask for it, though, and this option alone doesn’t make the cost of the card worth it. There are secured credit cards that are cheaper to hold that also offer this option.
For a credit limit increase, instead consider: The Capital One Platinum Secured Credit Card offers automatic credit line increases in six months if you maintain a good payment history and you’re creditworthy. You also don’t have to add money to your security deposit to get it. There are different minimum deposit requirements — $49, $99 or $200 — depending on eligibility. Regardless of which one you qualify for, you’ll get a minimum $200 credit limit. If you can afford to pay the annual fee and potential monthly fees on the Surge Mastercard, a card like the Capital One Secured makes more financial sense. Assuming you maintain a good payment history, you’ll get your deposit money back.
3. … But the fees can cut into it
It may appear at first glance that the Surge Mastercard offers a higher credit limit with less money down than a secured credit card, and in some cases that is true. But assuming you qualify for a low credit limit, the annual fee and possible monthly maintenance fees will initially occupy a sizable chunk of it. If, say, you have a credit limit of $300, an annual fee of $99 would leave you with an available credit limit of $201. That initial credit limit may be even lower once any maintenance fees are assessed.
For a flexible spending limit, consider: The Tomo Card can offer a high spending limit, but you can’t carry a balance from month to month as is the case with traditional credit cards. Balances have to be paid off quickly. In a way, it keeps debt at bay. You pay no security deposit, no fees and zero interest. Plus, there’s no credit check to apply. Instead of costing you anything, the card delivers value in the form of rewards by earning 1% back on all purchases. Credit card options for bad credit with a generous credit limit run scarce, unless you’re willing to pay steep fees upfront, and that sort of defeats the purpose. The most affordable option when you have bad credit is to focus on the health of your credit so that you can qualify for better options later on.
4. Payment history is reported to all 3 credit bureaus
The Surge Mastercard reports payments to all three major credit bureaus (TransUnion, Equifax and Experian), companies that collect the information used to calculate your credit scores. It's a must-have feature if your goal is to build credit, but it’s not a standout feature. Many other credit cards for bad credit by major issuers also report payments to these companies. This feature alone, though important, shouldn’t be the only factor that sways your decision when choosing a credit card.
For a credit-building option, instead consider: The Grow Credit Mastercard allows you to build credit with qualifying subscriptions or bill payments through different membership plans. Those are the only transactions that you can put on the card. It doesn't charge fees or interest. Plus, it skips the credit check. If credit-building is the main goal, a secured credit card that reports to the three major credit bureaus can offer flexibility on purchases. But if you’re absolutely against paying a deposit, this option has some membership plans that don't require one.
5. There’s no apparent path to upgrade or product change to a better card
The website doesn’t mention a path to upgrade to a better credit card after you’ve used the Surge Mastercard to work your way up to better credit. Celtic Bank did not respond in time for publication to a request to confirm whether a product change to a credit card with lower fees is possible with a good payment history.
For a certain path to a better card with the same issuer, instead consider: If you want to remove any doubt about a path to upgrade to a better option, the Discover it® Secured Credit Card touts that it reviews accounts after seven months to determine eligibility for an unsecured credit card. If eligible, you'll also get the chance to get your deposit money back. With responsible credit use, you can graduate on to a Discover credit card that will offer more value. Discover cards are known for skipping annual fees and offering decent rewards rates.