Verdict - This is the wrong secured card for most people, due to its mediocre annual fee and APR. The only unique benefit of this card is the $10,000 maximum credit line, which is twice as high as most other cards.
This unimpressive card offering features an annual fee that is a bit higher than average and an APR that is middle of the road. Also, you don't get rewards like you do with Navy Federal nRewards Secured and US Bank Skypass Secured. Furthermore, Bank of America's upfront collateral deposit can't earn interest - Citi allows you to fund their secured card with a CD and Fifth Third allows you to fund their secured card with a savings account. The APR is reasonable, but higher than Public Savings Bank.
The upsides to this card are the $10,000 maximum credit line ($300 minimum is pretty standard), the large number of Bank of America ATMs and branches, and the ability to convert the card into a unsecured Bank of America card at a later date.
If you might run a balance, consider the Public Savings Bank Secured card with 0% intro APR for 6 months and a lowest in class APR and no annual fee.
If you plan on depositing a large chunk of money to get a big credit line, this will help raise your credit score faster because the bank will report a low balance to credit line ratio to the credit agencies. In this situation a Bank of America card with a $10,000 credit limit will help greatly, but also consider earning interest with a Citi secured card where your collateral is in a high interest 18 month CD, or earning interest with a Fifth Third secured card where your credit line is tied to a savings account where you can still access the money. Both of these have lower annual fees than Bank of America.
Pros (compared with other secured cards):Bank of America's large network of ATMs and branches. $10,000 max credit line is twice as high as most other cards. Transition to one of many unsecured Bank of America cards after building credit.
Cons (compared with other secured cards): Slightly higher annual fee than some other cards from large national banks.
Typical (compared with other secured cards):Getting 100% of what you deposit as your line of credit. Average APR. 25 day grace period.
What is a secured credit card?Almost anyone can qualify for a secured credit card, or alternatively for a pre-paid debit card, regardless of credit history. What's the difference?
A secured card requires a one time upfront deposit, then behaves like a normal credit card. This money is "gone" until you close the account at some future date, and is collateral for your future spending. To be clear, money you spend in the first month must be paid back at the end of the month, despite the faact that you have already deposited collateral. The size of the upfront deposit determines the size of the line of credit - typically a $500 deposit will earn you less than a $500 credit line.
On the other hand, a pre-paid debit card is a stored value card, where money deposited into the account can be spent.
Pros and Cons of a Secured Credit Card versus a Pre-Paid Debit CardThe advantage of a secured credit card is that they help you build (or damage) your credit by reporting to the 3 credit bureaus. Some pre-paid debit cards claim to do this, but this is difficult to fathom, given that credit agencies look at the ratio of your balance versus available credit, and pre-paid debit cards do not have a credit line.
The advantage of a pre-paid debit card is that it does not require a permanent deposit to act as collateral, and can be more anonymous. However, fees are generally much higher. Some of the cards promoted most heavily on the internet will cost you hundreds of dollars a year in hidden fees. Some typical examples include $2.50 for ATM transactions, $5-10 per month, $0.50 to check your balance at an ATM machine, and $15 to shut down your card. Be careful!
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