Navy Federal Credit Union nRewards® Secured Credit Card Review

The Navy Federal Credit Union nRewards® Secured Credit Card is a secured credit card with no annual fee and a cash back rewards program that pays you back on every dollar you spend. The rewards program is solid in comparison to other secured cards, many of which don’t earn rewards on spending at all.

This card is designed to help people with poor or average credit improve and rebuild their credit after setbacks such as delinquencies, foreclosures, and personal bankruptcies. It’s also useful if you’re building credit for the first time. Plus, use your card responsibly for at least 6 months after opening your account and you may be considered for an upgrade to a non-secured Navy Federal Credit Union card.

Bottom line: As long as you can scrounge up at least $200 to cover the initial deposit, this card is definitely worth a closer look.

However, it’s not for everyone. Navy Federal Credit Union membership is limited to active duty and honorably discharged or retired members of the Armed Forces, civilian Department of Defense employees, and immediate family members of people in those two groups. Read on to find out how to qualify — and how to decide if the NFCU nRewards Secured Credit Card is right for you.

How Do You Get the NFCU nRewards Secured Credit Card?

Like all NFCU credit cards, this one is available only to people with close ties to the U.S. Armed Forces. That includes current and retired or honorably discharged service members, civilian employees of the Department of Defense, and immediate family members (including spouses) of eligible individuals.

That’s because membership in Navy Federal Credit Union is restricted to these groups. And membership in Navy Federal Credit Union is a base requiremet of qualification for any NFCU credit card. Members of the general public aren’t eligible, unfortunately.

But if you do qualify for the NFCU nRewards Secured Credit Card, you can look forward to one of the best secured credit card experiences around. Consider it a perk of membership.

Before we get into the details of this card, let’s briefly review how to join NFCU.

How to Join Navy Federal Credit Union

Joining NFCU is easy if you’re eligible. First, you need to prove eligibility for membership and open your Membership Savings Account, which requires a $5 opening deposit (at least). Then, you need to apply for your the NFCU nRewards Secured card (and/or any other NFCU card or account that catches your fancy).

The entire process takes 15 to 30 minutes at most, though you might not receive an up-or-down approval decision right away. During your application for membership, you’ll need to provide the following information:

You don’t have to apply for an NFCU credit card (or any other account other than the Membership Savings Account) when you join. But if you’re eager to begin building your credit, there’s no time like the present.

What Sets the NFCU nRewards Secured Card Apart

Once you’re ready to apply for the NFCU nRewards Secured Card, you can look forward to these three key differentiators:

• Earn Rewards on Every Purchase. Many secured credit cards don’t earn rewards. NFCU nRewards does, albeit at the modest base rate of 1 point per $1 spent. Still, it’s better than nothing, and better than you’ll get with most comparable cards.
• Doesn’t Require Good Credit (Or Much of a Credit History at All). You don’t need good credit to qualify for this card, or even a significant credit history of credit utilization at all. That’s kind of the point, actually.
• Path to Unsecured Status in Just 6 Months. This card offers a potential path to unsecured status within 6 months of account opening. No, it’s not guaranteed, but if you use credit responsibly for 6 billing cycles, NFCU could consider you for an upgrade.

Key Features of the NFCU nRewards® Secured Credit Card

These are the most important features of the Navy Federal Credit Union nRewards Secured Credit Card. Note the initial deposit requirement and refund policy, credit limits and potential increases, credit bureau reporting policies, and more.

Initial Deposit Requirement and Refund

Navy Federal Credit Union nRewards Secured Credit Card requires a minimum security deposit of $200. Your deposit amount is always equal to your credit limit, provided Navy Federal Credit Union deems your creditworthiness and income sufficient to handle the limit for which you’ve applied. Your deposit is held in an FDIC-insured account for as long as your account remains open.

Once 6 billing cycles have passed, Navy Federal Credit Union automatically reviews your account and, if it deems you have used your credit responsibly and paid your bills in a timely manner, upgrades your account to the non-secured Navy Federal Credit Union cashRewards Credit Card. Once the upgrade is completed, your security deposit is released.

Credit Limits and Limit Increases

You can apply for a higher credit limit at any time, though you’re not guaranteed approval. If you do qualify for an increase, you must make another deposit equal to the difference between your old and new credit limit.

Earning Rewards

This card earns 1 point per $1 spent on all purchases, with no limits or restrictions on how much you can earn. You can earn additional points on purchases at the Navy Federal Credit Union Member Mall, where select purchases earn up to 10 points per $1 spent.

Redeeming Rewards

You can redeem your rewards online for cash, restaurant and retail gift cards, and general merchandise, usually at a value of $0.01 per point or less. Larger redemptions generally offer more favorable redemption values. For instance, you need 3,500 points for a $25 Applebee’s gift card and 7,500 points for a $75 Home Depot gift card. You can start redeeming once you accumulate 1,000 points.

If not redeemed within 4 years of the date they’re earned, points expire and lose all value. Importantly, points cannot be redeemed for statement credits, bank account deposits, or other forms of cash.

Credit Bureau Reporting

Every billing cycle, Navy Federal Credit Union reports your payment patterns (or lack thereof) and credit utilization to all three major credit reporting bureaus. If you use your credit card responsibly and consistently pay your bills on time, this regular reporting is likely to raise your credit score over time.

Important Fees

There is no annual fee, foreign transaction fee, or balance transfer fee. The cash advance fee is a nominal $0.50 to $1 per advance, depending on how it’s executed.

Credit Required

This card is designed for people with poor to below average credit. Your application may be disqualified if you’ve recently declared bankruptcy, but other serious credit issues are not likely to hurt your chances of qualifying.

Advantages of the NFCU nRewards® Secured Credit Card

These are the most important features of the nRewards Secured Credit Card from NFCU. Note the virtually nonexistent fees, rewards on every dollar spent, and automatic upgrade consideration after a half-year of responsible use.

• No Annual Fee. The Navy Federal Credit Union nRewards Secured Credit Card does not charge an annual fee. That’s a big advantage over many competing secured cards, whose annual fees can range as high as $40. It’s also great news for those seeking to maximize the value of their earned rewards.
• Virtually No Other Card Fees. Aside from the nonexistent annual fee, this card has an impressively light schedule of other card fees. It has no foreign transaction fee, balance transfer fee, or cash advance fee. By contrast, most other secured credit cards have 3% foreign transaction fees, plus balance transfer and cash advance fees ranging from 3% to 5% of the transaction amount.
• Every Dollar Spent Earns Rewards. The Navy Federal Credit Union nRewards Secured Credit Card is one of the few secured cards out there with any sort of rewards program. While its rewards pale in comparison to those offered by leading cash back cards such as Citi Double Cash or Chase Freedom Unlimited, it’s nice that cardholders with less-than-stellar credit can earn real rewards on every dollar spent with this card.
• Upgrade Consideration after 6 Months. Once you’ve had this card for 6 months, you’re considered for an upgrade to a non-secured card. Some competing secured cards are essentially dead ends – you can keep them active as long as you want, but you can’t graduate to a non-secured account.
• Relatively Low Minimum Security Deposit. This card requires a $200 minimum security deposit. That’s lower than many competing cards, though not the lowest in the secured card category. That honor goes to Platinum Secured Credit Card from Capital One, whose minimum security deposit is just $49.
• Relatively Low APR. For a secured credit card, NFCU nRewards has a relatively low regular APR: 18.00%. Though there’s no guarantee it’ll stay at this level forever, it’s been here for years, through the biggest Federal Reserve rate hiking cycle in over a decade.

Disadvantages of the NFCU nRewards® Secured Credit Card

The NFCU nRewards Secured card doesn’t have too many disadvantages, but these are certainly worth noting.

• Reward Points Expire. The Navy Federal Credit Union nRewards Secured Credit Card’s rewards points do not last forever. If left unused, they expire 4 years after they’re earned. While 4 years is a long time, this remains an inconvenience for infrequent card users. Most other rewards credit cards don’t allow their points to expire, no matter how infrequently they’re used.
• Points Can Be Worth Less Than $0.01 Apiece at Redemption. This card’s points aren’t particularly valuable come redemption time. When redeemed for gift cards and merchandise, they’re often worth less than $0.01 per point, a sub-par value relative to some competitor cards.
• Eligibility Limited to Armed Forces, DoD Employees, and Family Members. Navy Federal Credit Union eligibility is limited to active duty and honorably discharged members of the Armed Forces, civilian Department of Defense employees, and immediate family members of people who belong to those two groups. While those categories collectively include millions of people, they’re still a small minority of American consumers. If you’re excluded, you’ll need to look to another secured option.

How the the NFCU nRewards Secured Credit Card Stacks Up

Not quite sold on the nRewards® Secured Credit Card? Let’s see how it compares against another popular secured credit card with a low minimum deposit requirement: the Platinum Secured Credit Card from Capital One.

Final Word

The Navy Federal Credit Union nRewards® Secured Credit Card is an unusually generous secured credit card with a solid rewards program, low fees, and favorable interest rates. It’s a pretty good deal – if you can get it. Until Navy Federal Credit Union loosens its eligibility requirements to allow more of the general public to open accounts, this card is going to be off-limits to most Americans.

On the other hand, if you’ve provided for the United States’ defense in a civilian or military capacity, or you have immediate family members who clear that threshold, Navy Federal Credit Union nRewards Secured Credit Card is one way to get paid back.