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.
- Initial Deposit Requirement and Refund: 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. After 12 billing cycles, Bank of America may automatically review 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: This card’s purchase and balance transfers APR is 20.49% and varies with prevailing interest rates. The cash advance APR ranges up to 25.24%, and the penalty APR is always 29.99%.
- 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 foreign 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.
- Account Review After 12 Billing Cycles. As long as you make timely payments and use your card responsibly, Bank of America reviews your account at the 12-billing-cycle mark. If it deems you ready, it approves you for a non-secured version of this card and returns your security deposit. Some other secured cards require you to wait 18 or 24 months for an upgrade, and a handful do not offer non-secured versions at all.
- 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.
- 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.
- 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.
- 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.
- 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.
- Charges Penalty Interest. This card carries a hefty penalty interest charge of 29.99%. Once triggered, the penalty rate remains in force indefinitely, meaning it can dramatically raise your long-term card membership costs.
- 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 more than 3% interest on the first $500, and 0.05% on any balance above that amount – in other words, at least $15 per year on deposits of at least $500. While that’s not a huge amount, it can certainly help around the margins.
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.