If you’re new to building credit, you may find it difficult to get the credit card you want. The Citi® Secured Mastercard® is designed to help you establish a good credit history so you can transition to a better credit card. But how does it stack up against other secured credit cards? Let’s find out.
Citi® Secured Mastercard®: Benefits and basics
As far as secured cards go, the Citi® Secured Mastercard® is as straightforward as it gets. If you’re approved, you must deposit between $200 and $2,500 to “secure” your line of credit in case you default. Your credit limit will equal your deposit.
If you pay off the balance in full every month, over time, your credit score will improve enough to for you to apply for an unsecured credit card. Here are some more details:
- Recommended Credit Score
- Card Details
- Qualify with limited / no credit
- No rewards
- High APR
- APR: 23.49% Variable APR
- Penalty APR: Up to 29.99%, Variable
- Cash Advance APR: 26.24%, Variable
- Additional Information
- No Annual Fee, and unlike a prepaid card, it helps build credit history with monthly notifications to the credit bureaus
- A security deposit is required for this product (minimum $200)
- Pay your bill on time every month to avoid damaging your credit. Citi can help keep you on track with Auto Pay, online Bill Pay and alerts.
- Use the card anywhere Mastercard® is accepted — worldwide
Let’s take a look at a few reasons why you might want to choose the Citi® Secured Mastercard®:
Helps you build credit
For those with little or no credit history, it may be tempting to apply for a prepaid card because it doesn’t require a credit check. But because prepaid cards don’t draw from a credit line, you can’t use one to establish credit history. If you plan on borrowing, the Citi® Secured Mastercard® can help you establish good credit history now to get better loan terms later.
Reports to all three credit bureaus
Some secured credit cards, especially those offered by small financial institutions, report to only one or two of the national credit bureaus, or none at all. The Citi® Secured Mastercard® reports to all three credit bureaus — Experian, TransUnion and Equifax — ensuring that your good credit behaviors don’t go unnoticed.
The Citi® Secured Mastercard® offers no rewards, but the card has other benefits, including rental car insurance, travel accident insurance, purchase protection and extended warranty coverage.
Citi® Secured Mastercard®: Pitfalls
While the Citi® Secured Mastercard® is a good way to build credit, it may not be the best option. Here are some things to consider:
Bad for people with marred credit
The Citi® Secured Mastercard® is unique among secured credit cards in that it’s not optimal for people with bad credit. For example, your application will be denied if you have had a bankruptcy in the last two years. The card may be of more benefit to people with no credit history, including recent college graduates or immigrants.
There are better low-fee secured cards
The Citi® Secured Mastercard®’s annual fee is $0. However, the Digital Federal Credit Union Visa Platinum Secured Credit Card annual fee is $0 for this card as well, and it doesn’t come with balance transfer or cash advance fees. The card reports to all three credit bureaus and requires a minimum $500 deposit, but there’s no upper limit to your credit line as long as you have a deposit to match.
One obstacle to getting the Digital Federal Credit Union Visa Platinum Secured Credit Card, is that you must be a Digital Federal Credit Union member to apply. Eligibility requirements include:
- Someone you are related to is a current member.
- The company you work for or retired from is a participating employer.
- You belong to a participating organization.
- You live, work, worship or attend school in a community which has been designated as underserved and the credit union has a branch in it.
The Digital Federal Credit Union Visa Platinum Secured Credit Card isn’t the only secured credit card where the annual fee is $0. The Capital One® Secured Mastercard® is also a solid choice. Check our full review for more information.
Offers no rewards
When you’re just starting to build a credit profile, developing good credit behaviors is more important than earning rewards. But if you can do both, why not? The Nrewards Secured gives you one point per dollar spent. You can redeem points for travel, cash back, shopping, gift cards or experiences through the Navy Federal Rewards program. Plus, the annual fee is $0.
The main drawback of the Nrewards Secured, like the Digital Federal Credit Union Visa Platinum Secured Credit Card, is that you must be a member of the credit union to apply. To be eligible, you or a family member must be affiliated with the U.S. Armed Forces, Department of Defense, Coast Guard or National Guard.
To learn more about possible card options for building or rebuilding credit, you can also visit NerdWallet’s roundup of best credit card offers.
Is the Citi® Secured Mastercard® right for you?
The Citi® Secured Mastercard® is a decent option if you’re trying to build your credit from scratch. But since the card has no rewards, it’s best to shop around before applying.