If you want to make online purchases or find that it’s a hassle to carry a lot of cash around for your purchases, then a credit card can be a useful financial tool. However, if your credit history is sparse or you’re trying to recover from bad credit, you may find it difficult to get approved for a prime credit card (e.g a traditional card). As an alternative, you might want to consider the Public Savings Bank Secured Visa Credit Card.
Public Savings Bank Secured Card Review
This credit card is a Visa card, so you can use it at the usual places you shop or where you pay for services. There is no introductory rate, but the rate is pegged at Prime plus 11% variable APR. By contrast, some of the secured cards listed at Bankrate.com come with regular APRs of 19.5%. You can certainly count the Public Savings Bank card as among one of the low interest rate credit cards that are currently available. You can do a cash advance or opt for a balance transfer into this card, with the rates for these transactions currently set at 14.25% APR. Note that there are fees involved for these transactions.
There is an annual $50 flat fee to use this card but NO monthly fees. Competing cards may have higher annual fees. Also, many secured credit cards may have grace periods that help you avoid paying interest if you pay your balance in full. And typically, for cash advances, you’ll be charged interest starting on the transaction date. Make sure you review any such terms and features of a card before moving forward with your application.
Security Deposits for Secured Credit Cards
Unlike with regular credit cards, you’ll need to make a security deposit in order to use this secured credit card. The minimum deposit is $200, but you can choose to deposit up to $3,000. The amount you deposit in turn becomes your credit limit, unless the bank tells you otherwise. So if you deposit $500, then your credit limit is $500 total. You’ll find out more about your specific credit limit in the documentation enclosed with the card.
When you get your statement, you’ll see a minimum payment listed. You need to make this minimum payment by the due date as your security deposit won’t be applied to the minimum due amount. By making regular payments, you can establish a track record for improving your credit history. This is important, because your account will be reported to all three of the major credit bureaus. You’ll want a stronger credit history so that later on down the line, when you go to apply for another credit card or loan, you’ll be able to benefit from lower interest rates. If your credit history looks good, you can qualify for better interest rates.
Applying for this particular card might be easier for you than picking up a card at a local bank because Public Savings Bank won’t count your credit history, employment, or income against you. What this simply means is that it’s relatively easy to get a hold of this card: you won’t need a checking account and you will not be subjected to a credit check in order to be approved.
Reasonable Fees From Public Savings Bank Secured Credit Card
One thing that stands out about this card is that it doesn’t currently sport a penalty APR. This means that your APR won’t automatically jump up to 29.99% if you miss your payment, at least as of right now. Instead, there are a few fees to watch out for that are tied to how you use your card: for instance, if your payment is late, you’ll face a $20 fee. And if you go over your credit limit, you could face a similar charge. Note as well that you’ll pay $25 if your payment’s returned or you have insufficient funds.
Other Benefits
Aside from the purchasing power you’ll get by holding this card, you’ll also have access to $0 fraud liability in case your card is abused by someone else. There’s also automatic auto rental insurance, emergency and travel assistance, plus online account access. You can have up to two cards on the account, but they’ll share the credit limit.
One downside is that your security deposit account won’t go into an interest-bearing account. However, if you’re after the benefits of a secured credit card, then this may seem like a minor consideration. Another detail to keep in mind — unless stated otherwise, you might pay the rate for cash advances if you use the convenience checks the bank might send you.
Before you sign up for a new credit card, you might want to go over your finances and make sure you have room for the payments in your budget. Read the terms and conditions closely, so you’ll know what to expect as a new card member.
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{ 5 comments… read them below or add one }
Hmmm, I am not a big fan of secured cards (or credit cards for this matter). With secured cards, since you have to put down a security deposit which becomes your credit limit (say $500), and this money does not gain interest, it seems like you are giving a third party your money (interest free) to hold for you when you need it. There are also fees involved– the $500 line will cost you at least $575 the first year because of the application fee. That’s 15%! I guess you do have the convenience of using it later and maybe it creates some type of discipline for the user who has to tuck away this money for later use, but I advocate using cash or a debit card instead. If you can’t accord to buy something this way, its probably a good reason not to buy it in the first place.
With secured cards, you can build credit though. That’s the advantage it has over debit cards or cash. And the $75 in this case is just a one time fee. Anyway, each type of card is there for a particular reason and use — up to you how you decide to use it.
I want one of these cards!
SVB, you make a good point in your comment. Secured cards do allow you to build credit and that is their advantage over debit cards and cash. If you have bad credit and want to build credit, I guess these secured cards are at least one method, albeit it a bit costly in my view. But the fact of the matter is, if a consumer has bad credit, ironically, the consumer has less attractive financial options and many financial products cost the consumer more.
I got a public savings bank secured card to begin building my credit as I am young and didn’t have a history to speak of at the time. I must say, I was a bit skeptical about the whole secured card idea, because essentially it is a loan that you’re giving in return for a credit score. Anyway, since I’ve had the card I have had absolutely no problems with them. I never charged much, and always paid my balance, and recently switched to a standard credit card. Because I no longer needed my secured card, I called to cancel. I first called customer service and they were very cordial and polite. They canceled my card, but said I had to call Public Savings Bank directly to receive my deposit back. I was surprised when I called the bank, first off by the fact that I didn’t have to deal with any automated message systems (A real person answered the phone after three rings!), and secondly because of how nice they were. The man asked me why I choose to cancel my card, and when I said because I had moved onto a regular card, he said “Ohh! That’s fantastic. When we get a customer who is responsible we know we’re already losing them, but hopefully we get the chance to help them on their way.” He didn’t try to convince me to stay, or offer me anything, just said that he was very happy for me, and that’s what Public Savings Bank is all about. So in my opinion, five star customer service! The only downside that many people probably will dislike about this card is things can take a while. It took a good three or four weeks at least for my card to come after I had ordered it and paid the security deposit, and it will take ten weeks to receive my refund.