Citi Secured Review: Decent for Building Credit and Moving On

The Citi® Secured Mastercard® is a little different from other secured credit cards: It's designed specifically for those with no credit or limited credit, not bad credit. If you're eligible, it's not a bad choice, since it has minimal fees and reports to all three major credit bureaus. It can help you establish good credit if you use it to borrow responsibly and pay on time.

But compared with its chief competitors, it falls slightly short. Consumers with thin or no credit who aren't tied to Citi will likely be better off choosing a different credit card.

Key features of the Citi® Secured Mastercard®

No annual fee

Unlike some secured cards on the market, this one charges an annual fee of $0. While you have to provide a security deposit of at least $200 to open the card, that money will be returned to you as long as you close the card in good standing.

That makes it preferable to many unsecured cards that target people with no credit and pile on outrageous fees — annual fees, monthly fees, service fees, program fees and more.

Reports to all three credit bureaus

If you make on-time payments each month, they will be reported to the three major credit bureaus — Equifax, TransUnion and Experian — and allow you to build your credit history over time. Then you will be able to apply for other credit cards that require good to excellent credit and come with rewards and other perks.

There is a potential upgrade path

With the Citi® Secured Mastercard®, your account will be automatically reviewed within 18 months of opening to determine if you're eligible to have your deposit returned early and continue using the card as an unsecured card. Many secured cards require you to close your account in order to get your security deposit back, which can lower your credit scores, so this is a big perk. Still, 18 months is a long time to wait to get upgraded to an unsecured card, and other cards begin reviewing accounts well before that.

Not available to applicants with bad credit

If you have bad credit (typically, FICO scores below 630), you likely won't qualify for the Citi® Secured Mastercard®. You also might not qualify with certain negative marks on your credit report. This card requires, for example, that you not have experienced bankruptcy in the past two years.

Bad credit isn't an obstacle for qualifying for other good secured cards, including the $0-annual-fee Discover it® Secured Credit Card. This card also requires at least $200 for a security deposit, but Discover starts automatically reviewing your account at seven months to see whether you qualify for an upgrade. If you get upgraded, you can continue to use your card, and your security deposit will be refunded.

» MORE: NerdWallet's best credit cards for bad credit

Requires a security deposit

A security deposit is standard for cards geared toward people with bad credit. But if you instead have thin or fair credit (generally, FICO scores between 630 and 689), you have some additional options that don't require a deposit. The Chase Freedom Rise was also designed for credit newcomers and doesn't require a security deposit. Plus, as of this writing, you'll also receive a $25 statement credit once you enroll in automatic payments within the first three months.

Deposit needs to be funded relatively quickly

This card requires a security deposit of at least $200. That's also fairly standard among secured cards. But it needs to be paid within 14 days of opening the account. If that's inaccessible for you, the Capital One Platinum Secured Credit Card offers more flexibility. Depending on your credit, you may qualify for a security deposit of $49, $99 or $200, which you can pay in installments within 35 days of approval. The annual fee is also $0.

You won't earn rewards

If you're looking to build your credit, earning rewards shouldn't be your first priority. And the Citi® Secured Mastercard®'s lack of rewards certainly isn't a dealbreaker. But quite a few of its competitors do offer rewards, even if you have bad credit. For example, the Discover it® Secured Credit Card earns 2% back at gas stations and restaurants and 1% back on everything else. Meanwhile, the Chase Freedom Rise earns 1.5% back on everything.

If you are looking for a card to help you build your credit, the Citi® Secured Mastercard® is a solid choice. After months of on-time payments and responsible use, you might be able to qualify for a card with more benefits. But if you have bad credit or want more robust rewards, you'll likely fare better with a different card.

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