It’s extremely rare for a credit card for people with bad credit to offer any sort of rewards — that is, of course, other than the reward of knowing you’re doing the right thing to rebuild your damaged credit. But the Skypass Visa Secured offers that and more, with an ongoing rewards rate of 1 Skypass Mile per $1 spent. Skypass miles are useful for Skyteam Alliance flights, which for most U.S. citizens is most often going to mean Delta Airlines.
The Skypass Visa Secured’s annual fee is $50. While that’s a bit higher than we usually like to see, just $5,000 in annual spending on the card will let you earn enough Skypass Miles to make up for the annual fee. Any spending over that, and they’re paying you to use the card. If you’re considering this card, make sure you plan to spend at least $5,000 per year on it. If not, you may want to consider a lower- or no-fee card, such as the Digital Federal Credit Union Visa Platinum Secured Credit Card.
In the pros-and-cons department, the main pros are pretty obvious: You earn rewards on all your spending, and get a 5,000 Bonus after making your first purchase with the card.
As for the cons, the APR is high, but pretty typical for a secured credit card. But if you don’t plan to pay off your balance each month—which you should do, if possible, with any credit card—then you may want to consider a card with a lower APR, such as the Digital Federal Credit Union Visa Platinum Secured Credit Card. Sure, you won’t earn any rewards, but the rewards you earn with the Skypass Visa Secured would most likely be wiped out and then some, if you carried a balance month to month.
Like all secured credit cards, this card’s credit limit will always be equal to the size of your upfront deposit. That deposit needs to be at least $500 to start, and by making additional deposits over time if you so choose, you can increase that limit to up to $5,000. Having that higher limit will allow you to rebuild your credit more quickly, since it will lower your debt to credit ratio, a key factor in determining your credit score.
Overall, the primary advantage of getting a secured credit card is that it will help you build your credit by reporting your on-time monthly payments to the three major credit bureaus. This, in turn, helps you build credit and eventually graduate to a traditional unsecured credit card, which doesn’t require an upfront deposit and will likely have a much higher credit limit.
Just remember that you need to be careful with a higher credit limit and know what you can afford to spend and pay off each month. Otherwise, you risk hurting your credit again and ending up back where you started or worse.
Image via iStock.