The Community Secured Visa Card by Coastal Federal Credit Union is an ideal tool to begin establishing and rebuilding credit.
This card requires you to place a minimum deposit of $100 into a Coastal FCU savings account (which is available to anyone). This serves as your collateral since it’s a secured card. You can deposit up to $10,000.
Why a Secured Card is a Good Idea
If you’re trying to rebuild your credit history, then a secured card can help you.
Secured cards are different from regular credit cards, as you’re required to provide collateral in the form of a cash deposit. Your deposit is the amount of credit you can use on the card.
This insures the creditor against any losses in the event you don’t make a payment. They’ll simply use your deposit to cover the balance on your card.
Secured cards are also different from prepaid cards and debit cards. Debit cards are directly linked to your checking account, and your usage isn’t reported to the major credit bureaus since you’re not making monthly payments.
Similarly, your usage of prepaid cards isn’t reported to the credit bureaus. This is because they function similarly to gift cards – you put a certain amount of money on a prepaid card, and each time you pay with it, the balance goes down. When the balance reaches $0, you can no longer use the card.
In short, if you’re looking to rebuild your credit and establish a positive history, secured credit cards offer one of the best ways to do it.
Fees, Benefits, and Application Process
There’s no balance transfer fee with the Community Secured Visa Card, and there’s also no annual fee.
There’s a 13.50% variable APR across the board – for balance transfers, regular purchases, and cash advances. This makes it simple to keep track of, though the 13.50% APR is just slightly under the 15% average for most credit cards.
The Coastal FCU Community Secured card has regular Visa benefits, such as:
- FraudBlock – protects you against forms of credit card fraud
- Accident insurance
- Travel and emergency assistance
The application process is very straightforward. Once you’re a member of Coastal FCU, you can simply apply online. It takes around one to two business days for an approval to go through. You can apply for a savings account online as well.
Who’s Eligible to Apply?
To be eligible to sign up for this card, you must be a member of the Coastal Federal Credit Union. You qualify for membership depending on where you work, if you have a relative that’s a member, or if you’re a member of the North Carolina Sustainable Energy Association or The North Carolina Consumers Council.
If none of those currently apply, you can always join the latter two organizations for $18 – this membership fee is deducted when you open a savings account with Coastal FCU.
The Fine Print
There’s an 18% penalty APR that applies if you make a late payment past 60 days or have a payment returned. If you make six consecutive timely payments, your APR may be reduced, but the penalty APR can apply to new transactions indefinitely.
As you’re focusing on rebuilding your credit, you shouldn’t be taking any chances with late payments, but it’s something to keep in mind.
Late fees and returned payment fees are both $25.
If you need a copy of your statement (you can view your account details online), a $5 fee is charged. A document copy fee is also $15.
If you lose your card at any time, you’ll have to pay $10 to replace it. If you want to expedite the shipping, it’ll cost you $35.
Foreign transaction fees are 1% for multiple currency transaction and 0.80% for single currency transactions.
Other Cards to Consider
If you don’t want to open another savings account to qualify for this card, we have a few other alternatives you should consider.
If the $100 deposit seems steep, you may be able to qualify for a lower option with the Capital One® Secured Mastercard®.
The security deposit for this card is $49, $99, or $200, depending on your creditworthiness. The variable purchase APR is 24.99%, and there’s no annual fee. The max credit line you can have is $3,000. This is great for those who don’t want the temptation of a larger credit limit, or don’t have as much money to put down for a deposit. A late payment incurs up to a $35 fee.
You should also check with other credit unions closer to you if you’re not near North Carolina, as they tend to offer some of the best secured card choices with fewer fees. You can view our list of secured cards and compare them here.
What’s Best for Your Personal Situation?
Always consider what card is best suited for your personal situation. It’s important to look at all the factors involved, including fees and benefits, before applying for a credit card.
Some secured cards require a higher minimum deposit. It’s up to you to evaluate whether or not putting more of your money down is worth the higher limit. When trying to rebuild your credit, you don’t want to be tempted to make large purchases, so having a smaller minimum deposit might actually help you keep your spending in check. The best way to build your credit efficiently is to make one small purchase a month and automate your bill being paid. This way you have a low utilization and never miss paying on time and in full.
Do your research and be your own advocate. Always check the fine print to make sure the offer is valid and that you’ll be able to take advantage of it properly.