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College Students and Recent Grads, Reviews, Student Loan ReFi

LendKey Student Loan Refinance Review

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

LendKey Student Loan Refinance Review

Updated July 13, 2017

Could you imagine trying to find the best student loan refinancing rate from community banks and credit unions on your own? How would you do it? Would you call every bank and credit union and ask for help? What a nightmare.

LendKey has relationships with 300+ community banks and credit unions all over the United States. LendKey* can issue loans to residents in any of the 50 states. This keeps you from having to pound the pavement by your lonesome. LendKey’s website will show you the best rate for refinancing your student loans.

Since 2007, LendKey has been a one stop shop for student loan refinancing. It also offers other types of loans. But for the sake of this review we’ll be focusing on how LendKey takes care of graduates looking to improve their debt situation. Fixed APRs range from 3.25% – 7.26%. Variable rates start as low as 2.66%. (All of these rates include the auto-pay discount). LendKey is one of the top four lenders in MagnifyMoney’s survey of where to refinance your student loan.

Who can benefit from using LendKey? Anyone hoping to refinance their student loans should consider LendKey. It is easy to apply:

If you’re on the fence about refinancing, here are some of the benefits to be gained:

Lower Payments

Refinance your way to a more manageable monthly payment.

Lower Rates

Spend less on interest by getting a lower rate than the aggregate of all individual student loans.

Simplified Finances

Making payments on multiple loans to multiple institutions at different times of the month can be quite the hassle. It’s much easier to remember just one payment. Many lenders even let you consolidate both private and federal loans.

Different Repayment Options

Different lenders offer different repayment options. It’s wise to explore all the options to determine what makes the most sense for your particular situation.

Pros of Using LendKey

A Unified Application Process

This is hugely important. With LendKey, you’re not shuffled through tons of screens on different domains – all using different logons and different (confusing!) user interfaces. Within 5 minutes, a person can navigate through LendKey’s application process. This means after 5 minutes, you can see how much you can save by refinancing. You can even choose what loan you want.

Cosigner Release Available

Yes, you can secure a low interest rate and then cut loose your cosigner. Once you prove you are responsible – LendKey no longer needs a cosigner tied to your account. This may help convince a cosigner to work with you initially. They won’t need to be on the hook for long. Once you’ve made 12 full and consecutive on-time payments, your cosigner may be released. LendKey does a credit check and examines your income to see if you are free to go it alone.

No Origination Fee

This is helpful since it means you are free to shop around without feeling committed.

Further Interest Rate Reduction

1% interest rate reduction once 10% of the loan principal is repaid during the full repayment period. This is subject to the floor rate.

0.25% ACH Interest Rate Reduction

Many lenders reduce interest rates by a quarter percent for borrowers who agree to automatic payments.

Federal and Private Loans Can Be Consolidated Together

However, you lose some federal benefits in doing so. Things like free insurance (provided with federal loans if you are killed or severely disabled), public service forgiveness and military service forgiveness as well as income-based repayment plans. Grace periods will likely be omitted when writing the new consolidated loan.

Over 40,000 Borrowers Serviced

As of January 2016, 40,000 people have used LendKey’s services.

Excellent Customer Support

According to cuStudentLoans (which LendKey owns so take this with a grain of salt), 97% of customers are satisfied. Customer support comes out of New York and Ohio. Phone support is available each day from 9AM to 8PM EST.

For what it’s worth, I called into support 5 times at random. The support I received from the sales team was really great. Even the gentleman with only 6 months of experience was quite knowledgeable.

Eligible Schools

This list of eligible schools is 2,200 and growing. Chances are your school is on the list. However, LendKey doesn’t encourage students to submit eligibility requests as other student loan refinancers do.

Return Policy

Yes, you can ‘return’ your loan. LendKey offers a 30 day no-fee return policy to allow you to cancel the loan within 30 days of disbursement without fees or interest. That’s pretty incredible.

Cons

LendKey Doesn’t Give You the Complete Picture

LendKey doesn’t help a lot with stacking institutions against each other. I suppose this is meant to not to play favorites. However, it would be nice to be able to read about each institution within the LendKey interface. I’d still advise opening up another tab to research the banks you are considering.

The Fine Print You May Miss

Since LendKey is a loan matchmaker, there isn’t a lot of fine print on the site. This means a person still needs to review the fine print of each institution before finalizing his or her loan as mentioned before. LendKey does a fantastic job of getting you 90% of the way. But that last 10% of fine print is between you and your lending institution. Read through everything before signing up for a new loan.

I read the Better Business Bureau complaint log for LendKey. There are only 11 complaints in the past 3 years. SoFi (a competitor) has 18 and another competitor, Earnest, has no complaints. These complaints were mostly small misunderstandings between the LendKey support team and the borrowers.

The Application Process

There are four steps to the simple application process. Step 1 is for estimating monthly payments for a private student loan. It’s simple. You identify the amount you’d like to borrow and fill in a radio button indicating your credit is fair, good, or excellent. The last part is where you enter which state you live in. This is because many programs are state specific. Step 1 takes 1 minute.

Step 2 takes 2 minutes. This is the step where you compare the rates and offers available to you. Choose what works best for your unique situation.

Step 3 again only takes 1 minute. This is the actual application. As mentioned earlier in this article, this process is done through the LendKey interface. And don’t worry, information inputted into LendKey is safe (privacy policy).

Step 4 takes 10 minutes. This is the step where a person verifies identity, school, and income (screenshots/pictures work so there’s no hassle with scanning!). You will know if you are approved during this step.

As with any company, there are competitors. Here are two worthy rivals also worth considering:

Alternatives to LendKey

SoFi

SoFi stands out with a job placement programs, free wealth management for borrowers and even a dating app. More importantly, SoFi has low interest rates, with variable rates starting at 2.795% and fixed rates starting at 3.35%.

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Earnest

If you have a low credit score but have potential to earn a good income, Earnest will treat you well. Earnest looks beyond a simple credit score. The application process examines employment history, future earning potential and overall financial situation.

Earnest seems to take a very personal approach to each customer. A customer states an amount they can pay each month and Earnest will give them a loan, accordingly. Earnest also lets borrowers skip a payment each year. This could come in handy if money gets tight around the holidays. Just keep in mind, this can increase your future payments to compensate for the missed on.

Fixed interest rates start at 3.35% and variable interest rates start at 2.79%.

However, Earnest isn’t available for all US residents.

Final Thoughts

LendKey runs a fantastic student loan refinancing division. The company offers many, many customizable options with very few downsides. With no application fee, it’s worth seeing what this student loan refinancing powerhouse can do for you.

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Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Best of, Personal Loans

Best Options for a No Fee Personal Loan

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Best Options for a No Fee Personal Loan

Updated May 30, 2016

Interest isn’t the only cost to consider when shopping for loans. Fees can also eat away at your money. Many lenders increase profits by charging all sorts of fees – application fees, origination fees and even prepayment fees! So it’s important you do your homework and find a no fee personal loan.

Below, we help get your research started by rounding up personal loan providers that respect their customers enough not to charge insane fees. This post also lists other lending companies you may already be familiar with, which offer no origination fees and no prepayment fees but do include steeper late fees.

LightStream

LightStream may be an unfamiliar name, however it’s operated by one of the largest banks in America. LightStream is the online lending division of SunTrust Bank, the 12th largest bank (in terms of total assets) in the United States. LightStream offers up to $100,000 in personal loans for a maximum term of 84 months with 5.49% to 14.49%. It is so confident in its application experience, that any dissatisfied customer will receive a $100 credit towards their personal loan. LightStream also offers a very competitive home improvement loan.

LightStream Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • No late fee

What LightStream Wants to See in Its Personal Loan Applicants

  • A 720+ credit score
  • 5 years or more of significant credit history is preferred
  • No delinquencies
  • Money saved in a bank
  • Some variation of credit lines
  • Proof of stable and sufficient income

*referral link

SoFi

SoFi offers personal loans ranging from $5,000 to $100,000. Terms are 3, 5, or 7 years with fixed APR ranges of 5.49% – 14.24% if enrolled in autopay. Borrowers can use SoFi personal loans for reaching nearly any goal: home renovation, credit card payoff, and more.

Something that makes SoFi stand apart from other lenders is that the company offers unemployment insurance. That means an eligible borrowers who have lost their jobs person can go 3 months in a row (12 months total) without making a loan payment. SoFi also offers job placement services.

SoFi Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • A late fee applies if a payment is more than 15 days late. The late fee is the lesser of 4% of the payment due or $5.

Getting Approved for a Personal Loan by SoFi

  • You must be age of majority in your state (18, 19, or 21 – depending on your state)
  • You must be a US citizen or permanent resident
  • You must have graduated from a SoFi approved school
  • SoFi does not use FICO, but the product is for prime and super-prime consumers. You must be current on all of your accounts and have no previous bankruptcies.
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*referral link

Earnest

Besides being a no-fee lender, Earnest is appealing because the company is far from a traditional lender. Instead of focusing on credit scores, Earnest uses a merit-based lending system. Earnest aims to analyze a person’s trustworthiness instead of relying on a credit score. This is good for people with a ‘thin’ credit file – young college students, for instance. However, the application process isn’t nearly as brief as with other lenders.

Earnest Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • No late fee – customers are directed to call into support if they are having trouble paying. They can get their payment amounts readjusted.

Getting Approved for a Personal Loan by Earnest

Firstly, it’s only available in 36 states: Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Washington D.C., West Virginia, Wisconsin and Wyoming.

As mentioned earlier, it’s not a quick process. Potential borrowers must be at least 18 years of age and have a good education. Ideally, applicants will have a college degree and a steady job. An applicant’s debt to income ratio will also be analyzed. With this lender, it’s not just a matter of checking off boxes as one goes through the application process. Earnest really likes to get to know its potential borrowers.

*referral link

Basix Personal Loans

Before reading any further, it’s important to know that Basix is a new lender. As such, Basix only operates in Georgia, Missouri, New Mexico and Utah. Basix launched this year (2015). It’s still expanding. This new lender aims to serve those people who lie just below the requirements of many bank loans – tens of millions of Americans, according to its founder and CEO. This may be a good option for anyone struggling to find a lender.

Basix Personal Loan Fees

  • No origination fee
  • No prepayment fee
  • $5 late fee after 15 day grace period

How to Apply for a Basix Personal Loan

  • Must be over 18
  • Have a qualifying bank account
  • Have a regular source of income
  • Have an email address
  • Credit score of at least 600

But keep in mind, as with any loan that’s easy to qualify for, interest rates are high. These interest rates are nothing as bad as payday lenders but rates are still high: 25.99% – 35.99%. It also only offers a maximum of $5,000. This is why it’s important to consider the entirety of a loan – not just its fees.

Other No Origination Fee/No Prepayment Penalty Loans

The following are also lenders that don’t have origination fees or a prepayment fee. However, it’s important to be aware of the high late fees associated with these lenders. If paying the loan is already hard, late fees with just add to the pain. But still keep these other lenders in mind when shopping for a loan.

Discover

The most unique aspect of the Discover (yes, like the credit card) is that the loan comes with a 30-day money-back guarantee. If a borrower discovers a better loan within 30 days, they can just send Discover back the money with no interest charged.

Discover offers loans up to $35,000 with APR ranging from 6.99% to 24.99%. Loan duration is anywhere from 36 to 84 months. That’s much longer than most lenders offer.

For a Discover personal loan, applicants must be at least 18 years of age and a credit score of at least 660.

Santander

Santander is only available in certain states: NH, CT, DE, DC, RI, MA, ME, NY, NJ, PA, MD, or VT. The Santander personal loan boasts no origination fee and no prepayment penalty. The late payment fee is an even $20. A personal loan can range anywhere from $5,000 to $25,000. A successful applicant will have at least a 680 credit score.

PenFed

PenFed is another possibility if late fees aren’t a concern. PenFed is short for Pentagon Federal Credit Union. As intimidating as that may seem, military service is not required. In fact, anyone can join PenFed by making a one-time charitable contribution to one of its military-based charities. Tax-deductible donations can be as low as $14. That would more than pay for itself if a great personal loan is secured. A PenFed personal loan has no origination fee, no prepayment penalty but it does have a late fee of up to $25. You need a minimum 700 credit scores.The APR range is 10.25%-14.00% on a maximum loan of $25,000.

USAA

USAA boasts no origination fee and no prepayment fee. But USAA personal loans come with a late fee of 5% of the remaining balance of the loan. No wonder that fee isn’t advertised anywhere online. That’s the highest late fee (by far!) of any of the loans on this page.

The application process is very similar to that of PenFed. Successful applicants will have a credit score of at least 700. The maximum $20,000 loan can be set for a term as high as 72-months at 8.99% to 10.99%. One neat aspect of applying with USAA is most applications result in instant approval.

Next Steps Towards a No Fee or Low Fee Loan

It’s important to assess all aspects of a loan before signing and avoiding fees is an excellent start. You also need to shop around for the best option. If you do all your shopping within a 30-day window it will minimize the impact on your credit score. There are many personal loans available; it’s just a matter of finding one to fit your wants and needs.

We’ll receive a referral fee if you click on the “Apply Now” buttons in this post. This does not impact our rankings or recommendations You can learn more about how our site is financed here.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Building Credit, Reviews

Review: Secured Primor Classic Card by First Choice Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Secured Primor Classic Card

Is the Secured Primor Classic Card a Visa or a MasterCard? It’s up to the applicant to decide. Upon applying, applicants can either choose a MasterCard Classic or a Visa Classic Card. Surprisingly, each card offers the same rates, fees and perks. Thus, throughout this article, the card with be referred to as just the Classic Card.

Keep in Mind That This Is a Secured Credit Card

The Classic Card is a secured credit card. This is important to keep in mind because a secured credit card is like a credit card on training wheels, because you put down a refundable deposit in order to be eligible or the card. A secured card can keep you from creating credit card debt while still building credit. With this safety net comes fewer benefits than an unsecured card. So although the Classic Card doesn’t come with that many rewards, it is a good card if you’re looking to establish or rebuild credit.

The Offer

First Choice Bank is one of the few new banks in America. Founded in 2007, this financial institution is based in New Jersey and therefore may be a good option for you if you prefer the small town community feel. Although the bank has just a few locations, the card application is available to all Americans. However, it should be noted that age requirements vary by state.

The card requires an upfront security deposit which can be anywhere from $200 to $5,000. The credit limit is equal to the amount of the deposit. The credit limit can be raised by $50 increments at any time. As stated earlier, you can choose from a Visa or MasterCard and ultimately probably doesn’t really matter much. It’s important to realize that Visa and MasterCard are simply payment networks used to process transactions. Neither is actually issuing cards. This being said, choose which card will be accepted where you most often conduct business. 

Pros & Cons

Pro: The APR is 13.99%, which is pretty low for a secured credit card and there is no monthly fee. 

Con: There is a $39 annual fee. There are plenty of other secured card options (like Capital One) with no annual fee.

Pro: Refundable deposit with insurance. The FDIC protects the card’s security deposit, and the money will be available again once the secured line of credit is closed. Your card will need to be in good standing with no remaining debt in order to get your full deposit back. Interest also accrues on the security deposit. The current interest rate is 0.15% APY.

Pro: No credit check is needed. The card reports to all 3 credit bureaus.

Con: Doesn’t transition to unsecured. This card does not graduate to an unsecured card. The card stays open until the account is closed.

Pro: Approval guarantee for some. Applicants are guaranteed approval if their income is at least $100 more than expenses.

Con: No rewards. No rewards isn’t uncommon for a secured card but still, there are secured cards which offer rewards.

Pro: The security deposit can be increased at any time – up to $5,000. The application can be done electronically, by dropping it off at a branch or by putting it in the mail.

Fees and Fine Print

Cash advances get charged interest from the day they are posted to the account. All fees, except the annual fee, get posted as cash advances. There’s a foreign transaction fee of 3%. This is average for a credit card, but there are secured credit cards without this fee (see the heading ‘Worthy Competition’ below). A replacement card costs $29. There’s a credit limit increase fee up to $49.

Interest on the security deposit can’t be claimed until 1 year after the account has been opened. Interest thereafter will be credited monthly but not compounded. There is no application fee.

Who Should Get This Card?

The perfect applicant is someone who wants to build or rebuild their credit, but doesn’t travel often and enjoys doing business with a small bank.

Secured Primor Classic Card byFirstChoiceBank

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Other Cards to Consider

There are plenty of other secured cards to choose from if First Choice Bank isn’t the right fit for you.

Capital One Secured MasterCard

This card is worthy competition because its deposit range starts at $49 for a $200 line of credit. This card is perfect for someone looking for a secured card that behaves like an unsecured card. The Capital One Secured MasterCard card also has no annual fee.

1173_cardcardsecuredcardcapitalone (1)

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Visa Platinum Secured Card by Digital Federal Credit Union

Membership to this CU costs just $5, and the applicant must be a member of an approved organization (membership entrance fees range from $25 to $120). The card has no annual fee, a low APR and other perks. The minimum security deposit is $500.

DCU_Banking2

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No matter which secured card you pick, you should also use our Credit Score Guide to help you get into the 700+ club and maintain healthy credit.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Building Credit, Reviews

Review: Secured Primor Gold Card by First Choice Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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A secured credit card provides people looking to build (or rebuild) their credit a simple and safe way to do so. It’s safe in the sense that you can’t get into too much trouble with the card because the limits tend to be low. It’s also safe for lenders because you have to put down a security deposit that will be forfeited if you don’t pay your bill.

 

As your credit score begins to improve, so does your opportunity to graduate from the secured to a regular, unsecured card.

 

Much like when analyzing an unsecured card, not all secured cards are the same. You need to consider the interest rates, amount of the required deposit, whether there’s an annual fee and if the lender reports to the credit bureaus. You need the lender to report your behavior because that will help increase your credit score (assuming you behave well). Finally, it’s important to analyze all fees and fine print about the card and the issuing institution.

 

The Offer

The Secured Primor Gold card by First Choice Bank is the premier secured credit card offered by First Choice Bank. First Choice Bank was founded in 2007 and only has physical branches in New Jersey and Pennsylvania. However, the card is offered to any U.S. citizen by applying online.

In order to open a Secured Primor Gold Card, you need to open (or already have) a savings deposit with First Choice Bank. Your credit limit will be the amount in your savings account with a $200 minimum and $5,000 maximum. It does come with a $49 annual fee.

Applicants can opt for either the Visa Gold or the MasterCard Gold. MasterCard and Visa are only payment networks so it doesn’t matter which one is chosen and most merchants typically accept both.

The Pros

First off, it’s easy to apply for this card. It can be done online, printed and mailed or printed and turned into a branch. There is no processing or application fee. Furthermore, there is no credit check with this card. If your income is at least $100 more than you expenses, you’re guaranteed approval. Even if you have no credit history or bad credit history, you’ll get approved. A credit check typically results in a ding on a credit score. While this should not stop you from applying for a card (read #4 on this helpful list about credit score myths), it’s nice to keep a score as high as possible.

As discussed earlier, this card does report to all 3 credit bureaus. The interest rate is 9.99% APY which is low for any type of credit card. Pay the card off in full each month and never worry about the interest rate. The due date is always at least 25 days after the close of each billing cycle.

The credit limit can be raised by $50 increments after the initial deposit has been made. The security deposit is placed into a savings account that earns .15% APY. The FDIC insures the money in the savings account.

This card has no monthly fee, but there is an annual fee.

The Cons

The card has a $50 liability policy. Meaning, if the card is lost or stolen and used by someone else, the cardholder is only liable for $50 of the purchases made. This is similar to a debit card or other secured credit cards. Many unsecured cards have a zero liability policy.

The card has an annual fee that’s higher than First Choice Bank’s lower-tier secured credit card. The annual fee for the Primor Gold card is $49. There are options for no annual fee secured cards. The card has a foreign transaction fee of 3%, which is an industry average.

Balance transfer is not an option. Graduating to an unsecured card is what many people wish to do. However, the transition can be cumbersome as this card does not offer an unsecured counterpart. You’ll need to apply for an unsecured card and then close this account.

Fees and Fine Print

Cash advances accrue interest from day one. All fees, except the mandatory annual fee, get charged cash advances. A replacement card is $29. The additional card fee is $29. The expedited payment fee is $10. The credit limit increase fee is $49.

The card must remain open for one year to receive interest on the security deposit. Cardholders must keep at least $200 in the account at all times in order to receive interest.

Pulling money out of the attached savings account can’t happen without the bank’s consent. This makes it tricky if a member has thousands in a security deposit and wants cash for something. It takes time before the withdrawal of funds can be available.

Who Should Consider This Card

This card is a relatively competitive option for those looking to rebuild credit. However, you can find options without the annual fee.

first choice secured gold card

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The Competition

Secured Primor Classic Card by First Choice Bank

This is First Choice Bank’s lower tier secured credit card. Despite being the little brother, the annual fee is actually $10 less. However, the interest rate is higher at 13.99% but that doesn’t matter if the balance is paid in full each month. Approval is also guaranteed.

Secured Primor Classic Card byFirstChoiceBank

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Harley Davidson Visa Secured Card from US Bank

Non-bikers can still apply. This card has no annual fee, a rewards program and you even receive a gift – $10 in HD Genuine Rewards certificates. But rewards shouldn’t be a reason to open a secured card. The interest rate is very high at 22.99% APR so don’t carry a balance. There is also a $300 minimum deposit, which may be steep.

Harley-Davidson Visa Secured Card by US Bank

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Capital One Secured MasterCard

This card has no annual fee, a security deposit as low as $49 and many neat credit tracking tools via the Capital One website. Such tools include credit score monitoring and a what-if simulator. This card reports to all 3 credit bureaus.

1173_cardcardsecuredcardcapitalone (1)

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Find other secured card options here.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Building Credit, Reviews

Review: Secured Visa Card by Merrick Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Despite the small town community feel of the Merrick Bank website, it serves every state in the union. It’s actually a top-20 issuer of Visa cards with nearly 2 million customers. However, this statement reveals much more about quantity than quality for a reason. Merrick Bank focuses its solicitations for customers through the mail – so much so that a customer service representative I called said there was no other way to apply. That’s not true, but most applicants are found via physical mail solicitation.

While MagnifyMoney does rate this with an F for transparency, this card may provide some people with a viable way to healthy build credit history.

The Offer

This card can be obtained without having an existing relationship with the institution. An applicant doesn’t need to get wrapped up in the Merrick Bank ecosystem, either. Getting this card is fairly straightforward. An applicant simply applies online, agrees to the terms and conditions, sends in the security deposit, and is then (if approved) issued a card. Nearly everyone gets approved. After all, this is a secured credit card. Although a secured credit card is for people who are high risk (those building or rebuilding their credit) it is still secured. What this means is that a cardholder is essentially borrowing from himself or herself in order to get credit for responsible spending. It’s a fast way of proving a person’s credit worthiness. After responsible secured card use, a person can then move on to an unsecured credit card.

The uneasy part of filling out the application is that the applicant must send in the security deposit before technically being approved. It feels like a scam having to send in money before receiving anything in return. However, the money is FDIC-insured and will be refunded within 4-6 weeks if the applicant is declined.

Pros

The first major positive about this card is that it reports to all three major credit bureaus. This is good because it means the goal developing healthy credit history will be quickly achieved. Merrick Bank also offers an unsecured card for when that time comes. Cardholders also get free FICO score monitoring, which means you can easily keep track of your progress to healthy credit. It’s free if the cardholder signed up for online statements. Various other online management tools are available.

The credit line can also be as low as $200 or as high as $3,000. The interest rate is a variable 17.45%. There is a foreign transaction fee but that’s common on a non-travel oriented card. The typical fee is 3%, but this card only charges 2%. There is a 25-day grace period on this card, which is good. This means if a person pays the card off in full within 25 days, no interest ever needs paid. The bank also offers 24/7 telephone support for this card. Finally, there is also a zero-liability policy if the card is stolen.

Cons

There’s an annual fee. Although not uncommon for a secured card, you could find a card with no fee. The fee is $36, billed at $3 monthly. As mentioned earlier, applicants must send in a security deposit without the promise of being accepted. If denied, the applicant will be without that money for 4-6 weeks. Cash advances are available but the APR is 22.45% and there is no grace period. Meaning, the interest begins compiling right away. The transaction fee is 4%. The card is not enabled with an EMV chip. This means that although the foreign transaction fee is only 2%, it’s difficult to use abroad.

The Fine Print

The credit limit gets bumped up in $50 increments, so that can be a bit of a pain. There’s also a lot of talk on credit card forums about this bank flat-out refusing to do credit limit increases. There’s an ‘additional card’ fee of $12 per year, billed at $1 monthly. The max late fee is $38. This card cannot transition into an unsecured credit card.

Who Should Apply

This card is best for anyone needing a secured credit card, which offers a competitive annual fee, competitive interest rate, and the ability to pay zero interest. Whether building or rebuilding credit, this card is decent. However, you may want to consider some of the competition before applying with Merrick.

Merrick Secured

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The Competition

The following are a few of the top-rated secured credit cards here on MagnifyMoney:

The State Department Federal Credit Union

This card has no annual fee, an incredibly low interest rate of 6.99% APR, is has an EMV chip, has NO foreign transaction fee, and comes with a rewards program. You will need to be a member of the credit union to be eligible. Fortunately, anyone can join the State Department Federal Credit Union through the American Consumer Council. You can join the ACC for only $5 if you’ve used any major consumer product or service within the past 12 months

1245_card.EMV Secured Visa Platinum Card By State Department FCU

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Capital One Secured MasterCard

The Capital One Secured MasterCard makes it easy for some applicants to access a secured card without a large deposit. There is a minimum $49 deposit, but this can increase based on creditworthiness. The $49 deposit earns you a $200 line of credit. The card also has NO annual fee.

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Review: OpenSky SM Secured Visa Credit Card by Capital Bank

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

OpenSky SM Secured Visa Credit Card

The OpenSky SM secured Visa credit card from Capital Bank is advertised as easy to get and simple to use. That sounds good. But are those statements just to get the attention of people desperate for a credit card? Let’s take a look.

This Is a Secured Credit Card

Keep in mind that this is a secured credit card. A secured credit card is aimed at someone who needs to either rebuild credit or someone who is simply lacking a credit history entirely. With that said, secured credit card applicants are in a tough spot, which means banks and credit unions require a deposit to mitigate risk.

To graduate to an unsecured card, a wise choice is to use a secured card for a time. To move on to an unsecured card as quickly as possible, find a card that reports to all three credit bureaus. With responsible use, reporting to all three bureaus means a fast increase in your credit score.

The Offer

Capital Bank is currently offering a secured Visa credit card named the OpenSky card. There is an online-only application form, which takes about 10 minutes to complete. The bank boasts a low annual fee, no application fees, and an affordable APR.

The Pros

This card doesn’t do a credit check upon application. Even if someone has recently filed for bankruptcy, this bank doesn’t care to know. There is a simple 4-step application process: personal information, financial information, fund the card, and accept the terms of use. Capital Bank claims this can be done in less than 10-minutes. Funding the account will likely take the better part of a week. There are 4 ways to fund the account: debit card, bank wire transfer, Western Union wire transfer, or mail in a check or money order.

No interest is charged on new purchases when the bill is paid in full each month by the payment due date. Believe it or not, some unsecured cards begin charging interest just days after the purchase. By doing this, there’s basically no way a person can avoid paying interest.

This card is decent for someone wanting to rebuild his or her credit. The OpenSky card reports to all 3 credit bureaus as soon as the card is issued.

This card also carries the Visa Zero Liability policy. That means the cardholder isn’t liable for transactions made when a card is lost or stolen. It is the cardholder’s responsibility to notify Visa that the card has been lost or stolen as quickly as possible.

The minimum deposit to open this card is $200, an average amount for a secured card.

The Cons

There is an annual fee – there are plenty of other secured cards that don’t charge an annual fee.

After the account is open for one year, Capital Bank will charge a credit limit increase (or decrease) fee of $25.

The card also has no chip. More and more cards today are enabled with the EMV chip.

Furthermore, this card has no unsecured older brother. What would be nice is if eventually cardholders could smoothly transition into an unsecured card. Since this is not the case, cardholders will have to look elsewhere. This is a hassle because it will mean applying for a new credit card, getting a credit check and closing this account.

There are also a lot of complaints online about this card’s application page. I went through most of the application process and it worked fine for me. However, if you find the site unintuitive, it may be a problem as this is the only way to apply. Customer support can be reached Monday through Friday.

Fees and Fine Print

The maximum line of credit is $5,000. There is an annual fee of $35. The Annual Percentage Rate (APR) is 17.39%. Interest rate varies based on the Prime Rate. Cash advances are available for this card. The APR for these advances is 17.39%. There is also a cash advance fee of 5% (minimum $6).

This is fairly sneaky but interest will be charged on new purchases if the cardholder hasn’t paid the previous month’s balance in full.

Cash advance fees are $6 or 5% of the amount of each cash advance; whichever is greater. The foreign transaction fee is 3%. This rate is normal of cards, which aren’t travel-oriented.

The late payment fee is $27. A returned payment is $25. The inactive account fee is $10 per month after 12 months of no activity. The dormant account fee is $10 per month after 36 months of no activity (same fees – different names). Levies are $150 per incident. The card can also be expedited after application for $50.

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The Competition

The State Department Federal Credit Union

Credit unions usually have competitive secured credit cards. This secured credit card offer significantly trumps OpenSky: No annual fee, 6.99% APR, chip-enabled, has no foreign transaction fees, and, it even comes with a rewards program. Applicants needn’t worry about not being an employee of the State Department. Anyone can become a member by joining the credit union for $1 and joining the American Consumer Council for just a little extra.

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Digital Federal Credit Union

This credit union is open to anyone who gets a membership ($5) plus an applicant must be a member of an approved organization. A cost may apply.

This card has no annual fee, a low APR, insurance, car rental, travel, and warranty benefits, and even optional overdraft protection in association with a Digital Federal Credit Union checking account.

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OpenSky SM Secured Visa Credit Card by Capital Bank: The Bottom Line

This isn’t the most competitive secured card, but it is appealing to those who prefer not to have a credit report pulled for approval.

Check Out Other Secured Cards Here

Will Lipovsky
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Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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Visa Secured Card by MidSouth Community FCU

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Visa Secured Card by MidSouth Community FCU

The Visa secured credit card offered by MidSouth Community FCU is a competitive offer, at first. However, the membership requirements and potential fees may not make it an ideal option for you.

Reasons for Getting a Secured Credit Card

Let’s review where secured credit cards belong in the world of personal finance. Secured credit cards are for those who either have a sparse credit history or a poor credit history. Look at credit cards from the eyes of credit card issuers. They want to minimize risk. Having no credit history means the person has no track record of debt repayment. That’s risky. Having poor credit history means the past inabilities to repay may very well indicate the future. This is also risky.

A secured card is a tool for building credit not for buying luxury items on credit. The credit limit on a secured credit card is typically tied to the amount you deposit to open the card. This is often around $200, but it can be higher or lower depending on the bank or credit union. Some lenders may also give you credit limit increases for responsible behavior.

A secured card is usually the path for getting an unsecured card. Unsecured cards are preferable because they provide access to credit without needing to put down a deposit.

Fees, Benefits, and Application Process

There is no annual fee and an 8.90% APR. Cash advances and balance transfers are the same. Interest is not charged if the credit card balance is paid in full each month.

Fees:

  • Foreign transaction fee: 1.00% for each multiple currency transaction fee in US dollars. .80% for each single currency transaction in US dollars
  • Late payment fee: $25.00 or the amount of the required minimum payment, whichever is less, if you are ten or more days late in making a payment
  • Returned payment fee: $25.00 or the amount of the required minimum payment, whichever is less
  • Statement copy fee: $3.00
  • Rush fee: $25.00
  • Pay-by-phone fee: $10.00

Benefits:

  • No annual fee
  • Optional life and disability insurance available at low rates
  • ATM access to over 25,800 surcharge free ATMs nationwide
  • Nationwide account access at over 5,000 shared service locations
  • No transaction fee on cash advances from MidSouth (although interest accrues from the day of the advance)

Application Process:

You must go to a branch to apply. The MidSouth Community FCU website looks prehistoric. Many pages are lacking the security features necessary for sending secure information electronically.

You want to enter personal banking information only into a URL with https showing. The ‘s’ stands for secure. Without the ‘s’, it means the data isn’t encrypted. This means the information entered on the site is not protected when it goes back to the site’s server. It leaves the data visible to anyone trying to get it. It’s very dangerous for a banking website to have anyone apply online without this security.

However, you can bank online with the site. By doing so, you are redirected to a secure URL that is completely safe. Certain other pages are also secure. It’s odd they aren’t all secure but it shouldn’t stop you from choosing this institution.

Who’s Eligible to Apply?

Anyone who is a member of the credit union may apply. Membership only requires a $5 nonrefundable deposit. Membership is open to any person who lives, works, worships, or attends school in these Middle Georgia counties: Baldwin, Bibb, Crawford, Hancock, Houston, Jones, Monroe, Peach, Pulaski, Putnam, Twiggs, Washington, and Wilkinson. Membership lasts a lifetime.

The Fine Print

It’s wise to get a secured card with an institution offering a good unsecured card. This way, you can make a smooth transition. However, 2 out of 3 of MidSouth’s regular credit cards have higher interest rates. The third card has the same interest rate as the secured card. Fees are the same across the board. Choosing MidSouth is a little like taking an entry-level job at a company where there’s no room for advancement. Capital One offers a much better upgrade plan.

It takes $25 to open a checking account. Most credit unions only ask for $5.

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Other Cards to Consider

Capital One Secured MasterCard

The Capital One Secured MasterCard also has no annual fee. However, the purchase APR is much higher at 24.90%. However, we never recommend you carry a balance on a secured card. You should be making one small purchase a month and then paying it off on time and in full.

This card also offers a credit-tracking tool. It’s motivating to see your credit worthiness climb.

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Discover it® Secured Card – No Annual Fee

Discover offers an excellent secured credit card. Unlike many credit card companies, which water down the rewards (or eliminate them completely) from their secured credit cards, Discover has kept its popular cash back offering on its secured credit cards. Here are the highlights:

With this card, there is no annual fee. You do need to make a security deposit of $200 or more, which will establish your credit limit (up to the amount that can be approved by Discover). What we like most about this card is the automated review process. Discover will start automated monthly reviews at 8 months to see if you can be transitioned to an account with no security deposit.

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Make a Decision

Secured credit cards are temporary. With good behavior, you’ll be offered an unsecured card in no time. Don’t dwell on card options for too long. The sooner you begin building your credit, the sooner you can get a better credit card: lower fees, lower interest, and better rewards.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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The LAUNCH Secured Visa by Baxter CU

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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The LAUNCH secured Visa credit card is designed for those with limited or damaged credit.

To use the card, a member first secures a line of credit via a Baxter Credit Union savings account. It only takes $150 in the savings account to get started. As a person deposits more money into their savings account, they can request a higher line of credit. With this card, additional credit line increases can be earned by other ways such as by making on-time payments and setting up regular deposits.

Benefits of a Secured Credit Card

There are two basic types of credit cards: unsecured credit cards and secured credit cards. Unsecured cards have no collateral protection for the card issuers. This means that if you, a cardholder, doesn’t pay, the card issuer may never get its money. It’s a risk. But card issuers that offer unsecured credit cards have analyzed you, often with your credit report and score. The company deems you financially secure enough that no collateral is needed.

A secured card is for someone who is unable to provide a strong history of credit trustworthiness. With these customers, card issuers want to see collateral. Getting a secured card is not something to be looked down upon. It just may not have as many perks as an unsecured card. Getting a large line of credit is more difficult. But it’s a way of building credit and it’s the gateway to an unsecured credit card.

Fees, Benefits, and Application Process

Most secured credit cards have an annual fee. The LAUNCH card by Baxter CU is not one of them. The Annual Percentage Rate (APR) for purchases is 18%. Keep in mind interest rates are usually higher for secured cards. Balance transfers and cash advances are also 18%. If you pay the entire amount due each month, no interest will be charged. So be sure to pay on time and in full.

Fees:

  • Cash advance fee: $5.00 or 3% of the amount of each cash advance, whichever is greater. The maximum fee is $50.00.
  • Currency conversion fee: 1% of each transaction in US dollars
  • International transaction fee: 1% of each transaction in US dollars
  • Late payment fee: Up to $25.00
  • Over-the-credit-limit fee: Up to $25.00
  • Returned payment fee: Up to $25.00
  • Late payment fee: $25.00 or the amount of the required minimum payment, whichever is less.
  • Statement copy fee: $2.00
  • Rush fee (next business day): $30.00
  • Rush fee (second business day): $20.00

Benefits:

  • No annual fee
  • No penalty APR
  • No balance transfer fee
  • 24-hour member support
  • Free annual summary when you make at least 120 purchases in a year

Application Process

You can apply online or at a branch. Note that Baxter CU will do a card credit inquiry upon reviewing your application. If you do not give consent, your application will be terminated.

Who’s Eligible to Apply?

To apply, you must be a Baxter Credit Union member. This credit union is far more reaching than most others. Baxter CU is based in Vernon Hills Illinois and has many charter areas surrounding the Great Lakes and in Puerto Rico.

The credit union has three methods for becoming eligible for membership: community-based, employment-based, and family-based. The list of membership-eligible companies is vast. There are about 75 companies on the list. Eligibility can also be obtained through family relationships, such as being an immediate or extended family member of an existing BCU member. This includes those related by blood, marriage, fostering, or adoption. Eligible family members include spouses, children, parents, domestic partners, grandchildren, grandparents, aunts, uncles, nieces, nephews, aunts, uncles, and cousins. Please visit the BCU membership eligibility page for more detailed information about eligibility requirements.

The Fine Print

You must have a checking account to use this card. It takes a $5 nonrefundable deposit to open a checking account. There are 70,000 free ATMs nationally. If the credit card is lost or stolen, it is free to replace. However, it takes 7-10 days for a replacement to arrive. Rush shipping costs $20.

After being 10 days late on a payment, a late fee of $25 (or amount of minimum payment, whatever is less) is charged. After 30 days, a late payment gets reported to the credit bureaus. After 45 days, it goes into collections.

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Other Cards to Consider

Capital One Secured MasterCard

This card also has no annual fee. The initial deposit can also be cheaper at $49 instead of $150 as with the LAUNCH card. But the deposit is based on creditworthiness and Capital One may ask for up to $200. The purchase APR is higher at 24.9%, so it’s important to never carry a balance.

This card also offers a credit-tracking tool, which is really neat for those aiming to improve their credit score.

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Please visit our complete list of secured credit cards. There you will find many other credit union credit cards.

Secured Cards Are Only Temporary

No one enjoys paying high deposits, annual fees, and high interest. However, a secured card is usually only a temporary situation. Within a year or two of responsible use, you can apply for a secured card. These cards often have fewer fees and far greater rewards. What’s important right now is to begin improving your credit score.

Will Lipovsky
Will Lipovsky |

Will Lipovsky is a writer at MagnifyMoney. You can email Will at will@magnifymoney.com

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