BankAmericard® Secured Credit Card Review – Tool to Rebuild Credit

The BankAmericard® Secured Credit Card is a secured credit card with a $39 annual fee, a $300 minimum deposit requirement, and a maximum credit limit of $4,900. Since Bank of America® reports your payment patterns and credit utilization to all three major credit reporting bureaus (Experian, Equifax, and TransUnion), BankAmericard® Secured is a great tool for rebuilding credit after personal bankruptcy or other major financial setbacks. While it doesn’t always stack up favorably against comparable cards, it’s certainly worth a closer look.

Key Features

Initial Deposit Requirement and Refund

The BankAmericard® Secured Credit Card requires a minimum security deposit of $300 and a maximum deposit of $4,900. Your deposit amount is equal to your credit limit, provided Bank of America® deems your creditworthiness and income sufficient to handle that limit. The deposit does not earn interest.

Bank of America® periodically reviews your account and determine whether you qualify to have your deposit returned. If approved, the bank refunds your deposit and allows you to continue using your card as before.

Credit Limits and Limit Increases

If you wish to raise your credit limit, you can apply for an increase. If approved, you need to make a deposit equal to the amount of the increase, up to the maximum limit of $4,900.

Credit Bureau Reporting

Every billing cycle, Bank of America® reports your payments (or nonpayments) to all three major credit reporting bureaus. If you use your card responsibly and make timely payments, this regular reporting can raise your credit score over time.

Regular APR

See terms for current regular APR information.

Important Fees

There is a $39 annual fee. The cash advance fee ranges up to the greater of $10 or 5% of the advanced amount, while the balance transfer fee is the greater of $10 or 3% of the transferred amount. The international transaction fee is 3%. The late payment fee is $37, and the returned payment fee is $27.

Overdraft Protection for Bank of America® Deposit Accountholders

If you have a Bank of America® deposit account, you can link it with your BankAmericard® Secured Credit Card account as an optional form of overdraft protection.

Under this arrangement, deposit account transactions that would normally result in a negative balance instead pull a cash advance from your credit card account to cover the difference. There is a $12 fee per occurrence, and the advanced amount accrues interest immediately. You can minimize the cost of each transaction by promptly paying off the advance.

Credit Required

This card is for people with poor credit. Bank of America® is very lenient when it comes to approving prospective cardholders, though a very recent bankruptcy could complicate your application.

Advantages

1. Periodic Account Review. Bank of America® reviews your account periodically to determine whether you’re using your credit line responsibly and making timely repayments on carried balances. If and when you’re deemed ready, you may be approved for non-secured version of this card and qualify for the return of your security deposit.
2. Includes Optional Overdraft Protection. This card comes with optional overdraft protection for cardholders who also have Bank of America® deposit accounts. If you occasionally overdraft your deposit account, this feature may be worth the $12-per-occurrence fee. Of course, it’s best to avoid overdrafts in the first place, but it’s nice to have a fallback. Many secured credit cards not tied to deposit account institutions lack this protection.
3. Fairly Generous Credit Limit. This card’s credit limit ranges up to $4,900 – higher than that of many non-secured credit cards. If you have the means to pay off higher balances each billing cycle, this feature offers valuable flexibility. Some competing secured cards cap their credit limits at $3,000, and initial credit limits are often far lower – in the $200 to $500 range.

Disadvantages

1. Charges an Annual Fee. BankAmericard® Secured charges a $39 annual fee. Even if you never carry a balance, take out a cash advance, or make a transaction in a foreign country, this fee adds to your card ownership costs. By contrast, the Capital One Secured Mastercard and DCU Platinum Secured Credit Card do not charge annual fees.
2. Initial Deposit Requirement on the High Side. This card requires an initial deposit of $300, which is also the minimum initial credit limit. That’s a tough ask for penny-pinching applicants looking to rebuild their credit in baby steps. The Citi Secured Mastercard requires an initial deposit of at least $200, while the Capital One Secured Mastercard asks for as little as $49.
3. No Rewards. This card lacks cash back or other rewards. This doesn’t make it unusual among fellow secured cards, but it’s worth noting that some newer secured cards do offer decent rewards programs. For example, you can earn unlimited 1% cash back with the Navy Federal Credit Union nRewards Secured Credit Card.
4. Charges Penalty Interest. This card charges penalty interest. Once triggered, the penalty rate remains in force indefinitely, meaning it can dramatically raise your long-term card membership costs.
5. Deposit Doesn’t Earn Interest. Your BankAmericard® Secured Credit Card security deposit does not earn interest. By contrast, the DCU Platinum Secured Credit Card deposits go into a savings account that earns a substantial yield on low balances – not a life-changing amount, but certainly help on the margins.

Final Word

Though the secured credit card niche is not known for attractive sign-up offers or generous cash back rewards, it does surprise from time to time. A handful of secured cards offer real, if modest, cash rewards programs. Some have surprisingly low interest rates, on par with low-APR non-secured cards. A few have minimal fees, providing welcome relief for budget-conscious cardholders. And it’s not hard to find secured cards with solid fringe benefits, often underwritten by major issuers such as Visa or Mastercard.

The BankAmericard® Secured Credit Card doesn’t excel on any of these fronts, but that doesn’t mean it’s not appropriate for consumers who simply wish to keep their heads down, rebuild their credit for a year or so, and graduate to non-secured cards with better terms and rewards. If that’s what you’re after, you could do worse than BankAmericard® Secured.