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Vacation Loans: Find the Lowest Rate Options

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.

Find the Lowest Rate Options

Updated November 03, 2017
Travel is a huge priority for many people in their 20s and 30s. Seeing the world and collecting those experiences can make a big impact on you as you continue to develop into the person you want to be, and it’s just easier to get out there and go when you’re young.

You have fewer responsibilities to tend to back home, and long-term relationships, houses, or children might not be tying you down.

But if you’re early on in your career and still dealing with burdens like student loan debt from your college days, you also have less money to spend on travel when you’re young. Money can be a major limiting factor in your ability to take vacations and see more of the world right now.

If you’re set on taking vacations even when your budget is limited, you may be tempted to look into loans to fund your trips.

Can You Get a Loan for Travel?

While “vacation loans” aren’t really a thing, you do have options if you look into getting a loan to fund a vacation. Many lenders will provide personal loans instead.

You can get a secured or unsecured personal loan. A secured personal loan means you put up some asset as collateral against the loan, so if you don’t repay the money you borrowed you lose that collateral. (That collateral is often something like your car.)

You may be able to borrow more at a better interest rate if your loan is secured, but you risk losing whatever asset you used as collateral.

When you apply for a personal loan, you’ll need to provide a reason for borrowing the money. Some institutions accept things like travel and vacations as legitimate reasons for borrowing. And while taking out a loan for your vacation may sound crazy, it could be a better financial option than loading up travel expenses on your credit cards.

Funding Vacations with Personal Loans

If you do an online search for personal loans to fund your vacation with, you’ll likely come across a number of lenders that offer funds for this purpose. SoFi, Prosper, Earnest, LendingClub, Karrot, and Upstart are all legitimate companies to explore if you want to take out a personal loan for travel.

These are all online loan companies that offer personal loans, along with other financial products. (SoFi, for example, offers student loan refinancing.) The amount you can borrow will vary depending on a number of factors. Karrot allows borrowers to request $5,000 to $35,000. Upstart’s minimum loans vary by state, but all max out at $50,000 as well. SoFi offers personal loans in amounts from $5,000 and $100,000

Earnest is a little different. The company offers “merit-based” unsecured personal loans up to $50,000. These loans are designed for individuals who may have limited credit histories but demonstrate that they’re financially responsible.

There are a number of other companies that aren’t as reputable as those listed above, and are considered predatory. Predatory lenders tend to make loans with extortionate interest rates with complicated terms that are in favor of the lender, not the borrower.

You can quickly end up owing far, far more than what you initially borrowed if you’re not careful – especially when searching for a loan specifically to fund a vacation.

Again, there are no “vacation loans.” These loans are just personal loans, but marketed to be used for vacations. Predatory lenders target keywords like vacation loans and will often show up in search results if you look for a loan to fund your trip, so be aware of companies like Loans of America who create landing pages for their products like this. Choice Personal Loans is another example of a predatory lender that you should avoid.

But perhaps a loan shouldn’t even be your first thought.

The First Option to Consider

If you have excellent credit, then a 0% purchase APR credit card may provide you with a better option than a personal loan. The benefit of using these cards is that you’ll be able to pay off your vacation over time, with no extra payments to interest.

In addition to looking for personal loans, consider a balance transfer credit card. You can find MagnifyMoney’s guide to the best balance transfer credit cards here, which is updated regularly.

Keep in mind that most of these cards provide the 0% APR as a limited-time offer and there’s a time limit. If you fail to repay your balance in full by the end of that promotion period, you’ll owe interest on what you charged to the card. Not managing your payments can cost you a tremendous amount, so charge your vacation to any credit card with caution.

You could seek out a low interest rate credit card instead, but these typically come from credit unions and are reserved for the institution’s members. It’s well worth looking into this option if you’re a member of a credit union or are considering opening an account with one in your area.

If you are wary of charging your family vacation on a credit card or are concerned about paying it off before the end of the 0% APR, then look into personal loans.

If You Have to Borrow, Here’s What You Need to Know

If you choose to seek out a personal loan for a vacation, you need to have good to excellent credit to be approved – and to get a low interest rate on the money you borrow. Getting the lowest interest rate possible is the only way a personal loan might be a viable financial solution for your trip.

None of the lenders below charge a pre-payment penalty, but some do charge origination fees – so don’t forget to factor that in to the total cost.

Earnest (5.25% APR): One of the few lenders with no origination fee and no pre-payment penalty, Earnest is an excellent choice for those with top-notch credit and employment history. Fixed rate personal loans start at 5.25% APR and you can borrow up to $50,000. Earnest does a soft pull of your credit report to determine if you’re pre-approved and your rate, so it won’t hurt your credit score to check.

Earnest

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SoFi (fixed APR 5.49% – 13.49% and variable APR range of 5.37% – 13.37% – with autopay): Similar to Earnest, SoFi also charges no origination fee, no pre-payment penalty and allows you to check your rate without harming your credit score. You can borrow a minimum of $5,000 and up to $100,000 from SoFi.

SoFi

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LightStream (5.49%, 15.94% APR with AutoPay): is another lender that doesn’t charge an origination fee, but their interest rates run higher with the lowest starting at 5.49%. Similar to SoFi, you can borrow a minimum of $5,000 and up to $100,000. Unfortunately, there is no soft pull option and it will be a hard pull on your credit report to check if you’re eligible and determine your rate.

LightStream

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Karrot (6.44% APR): Karrot’s minimum APR is a bit lower than LightStream, but the company does charge an origination fee. This fee varies from 1.05% to 4.75% of the total loan. Karrot’s APR cap is also significantly higher than Earnest, SoFi and LightStream – which means you could end up borrowing at a rate closer to 30% APR.

Note: Karrot has suspended their personal loan program and are not currently offering new personal loans at this time. If you have an outstanding personal loan, Karrot states they are still servicing those accounts.

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Upstart (7.73% APR): Similar to Karrot, Upstart also charges an origination fee and has a higher maximum APR cap of 29.99% APR. The origination fee is 0.00% APR to 8.00% on a loan up to $50,000. You can check your rate without it affecting your credit score.

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Be sure to shop around and get quotes from a number of companies, and then compare rates.

What to Do If You Have Poor Credit

The most difficult part of getting a personal loan from a reputable company for any purpose is getting approved as a borrower. Most companies require good to excellent credit scores before they’ll allow you to borrow funds.

But there are options if you have poor credit. Avant, One Main Financial, and FreedomPlus are lending options that are more lenient with borrowers. But beware: these loans will come with origination fees and much higher interest rates than what is available via companies like SoFi, Earnest, and Upstart.

Avant, for example, charges 9.95% to 35.99% APR on its loans. FreedomPlus’ loans come with an APR from 4.99% to 29.99%. Additionally, these products aren’t available in all states and rates may change depending on where you live. Avant branded credit products are issued by WebBank, member FDIC.

You can find more information on these companies by searching for their FAQ, Support, or Help pages. Before applying, you should understand all fees involved, whether or not you’ll be charged if you pay off your loan early, and what interest rates and APRs you’ll be charged.

Look into Alternatives to Borrowing Money

At the end of the day, getting a personal loan is an option for funding your vacation — but it may not be the best money move to make. Instead of borrowing money, whether through a loan or by charging costs to a credit card, make a plan to explore financially sound alternatives.

The best way to fund your travels is to create a plan and start a travel savings fund for the trip or vacation you want to take. Consider using banks that offer great interest rates on cash savings accounts, like the ones in this post all offering APY of 1.05% or higher.

Then plan your trip and get an idea of the total cost. Let’s say you want to take a trip in the next year or so and you know your vacation will cost you $5,000. By giving yourself 18 months to save, you can set a goal to transfer $278 per month to your travel savings fund.

That will allow you to pay for your trip yourself, without taking out loans or using credit cards and subsequently paying more in fees and interest charges.

Feel like you can’t wait that long for your vacation? Your next option is to look at how you can reduce costs and take a trip that fits in your budget right now. Some solutions may include taking a trip with other people and splitting the cost of things like accommodations, or looking for low-cost alternatives to your dream trip. Perhaps you can stay in hostels or use Airbnb to find cheap rooms instead of splurging at pricey hotels every night.

And you can still use credit cards in a smart, responsible way. You can maximize your current spending and rack up reward points for travel. Then, you can use those rewards and points to cover your vacation expenses instead of paying for all costs with cash.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Kali Hawlk
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Kali Hawlk is a writer at MagnifyMoney. You can email Kali at Kali@magnifymoney.com

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The Top 6 Month CD Rates for April 2018

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.

The top 6 month CD rates
Source: iStock

Short-term certificate of deposit (CD) accounts offer investors a safe opportunity to squirrel away money for a future expense. If you’re looking for a brief solution for storing your cash and want to earn more interest than a typical savings account will offer, a 6 month CD can make a lot of sense. (It’s also a good place to start if you’re building a CD ladder.)

Using information from DepositAccounts.com, another LendingTree company and a database of offerings at more than 17,100 banks and credit unions, we found the five banks and five credit unions with the top 6 month CD rates. If there was a tie, we chose the institution with the smaller minimum-deposit requirement. We pulled these rates on April 20, 2018, and we excluded promotional offerings. The national average APY on 6 month CDs (among banks and credit unions) is 0.49%, according to the DepositAccounts.com database. These options outperform that average by a long shot. (You may also want to view our picks for the overall best CD rates.)

Banks with the best 6 month CD rates

6-Month CD from Limelight Bank

Limelight Bank

6 month CD APY: 1.86%
Bank information: Although Limelight Bank is located in Utah, they are an online bank that serves customers nationwide. They are environmentally conscious and originate loans for solar projects from customers’ various deposit accounts.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: Determined by bank.

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on Limelight Bank’s secure website

 

Banesco USA

Banesco USA

6 month CD APY: 1.85%
Bank information: Banesco is an international bank serving seven different countries, including the U.S. Banesco USA, located in South Florida, serves customers nationwide through its online banking platform.
Where to open CD account: Online
Minimum balance to open: $1,500
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

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on Banesco USA’s secure website

 

Live Oak Bank

Live Oak Bank

6 month CD APY: 1.85%
Bank information: Live Oak Bank is located in Wilmington, NC, but serves customers nationwide through online banking. While their initial focus was to help small businesses acquire funding, they now help all individuals through personal banking.
Where to open CD account: Online
Minimum balance to open: $2,500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on Live Oak Bank’s secure website

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First Internet Bank

First Internet Bank

6 month CD APY: 1.81%
Bank information: A subsidiary of First Internet Bancorp, this online bank founded in 1999 has no branch locations, but offers service online in all 50 states.
Where to open CD account: Online
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on First Internet Bank’s secure website

 

State Bank of India

State Bank of India

6 month CD APY: 1.81%
Bank information: State Bank of India originated in India, but opened a branch in New York in 1970. Today, they have over 22,000 branches across 36 countries and an online platform that allows them to reach customers worldwide.
Where to open CD account: Online
Minimum balance to open: $5,000
Maintenance fees: $0
Early withdrawal penalties: 30 days’ interest

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on State Bank Of India’s secure website

 

Credit unions with the best 6 month CD rates

PenFed Credit Union

PenFed Credit Union

6 month CD APY: 1.65%
Credit union information: PenFed, established in 1935, today serves more than 1.6 million members at branch locations in all 50 states and select overseas facilities.
Membership details: Open to current or retired members of the U.S. military, federal employees, affinity partners, members of qualifying organizations, or by donating to Voices for America’s Troops or the National Military Family Association.
Where to open CD account: You can open an account online or at one of their branches.
Minimum balance to open: $1,000
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on PenFed Credit Union’s secure website

NCUA Insured

Latino Credit Union

Latino Credit Union

6 month CD APY: 1.55%
Credit union information: Founded in Durham, N.C., in 2000, Latino Credit Union opened its doors as a solution to the Durham Latino community who were being robbed and mugged. While their original intent was to serve the Latino community, they have since expanded their membership to include anyone and everyone.
Membership details: Anyone who is willing to provide a one-time $10 donation to the Latino Community Development Center is welcome to become a member of the credit union.
Where to open CD account: Online
Minimum balance to open: $500
Maintenance fees: $0
Early withdrawal penalties: 90 days’ interest

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on Latino Credit Union’s secure website

Service Credit Union

Service Credit Union

6 month CD APY: 1.30%
Credit union information: Founded in Portsmouth, N.H., in 1957, Service Credit Union originally served employees of Pease Air Force Base. Today, it has grown to serve over 200,000 people throughout New Hampshire, North Dakota, Massachusetts, and even Germany.
Membership details: To become a member, you must live or work, or have family members that live or work in New Hampshire or Falmouth, Bourne, Mashpee, and Sandwich, Mass. Current members of the military, veterans, retirees, and reservists of the U.S. Armed Forces along with their families are also eligible for membership.
Where to open CD account: You can open an account online or at one of their many branches.
Minimum balance to open: $250
Maintenance fees: $0
Early withdrawal penalties: Determined by credit union.

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on Service Credit Union’s secure website

Bethpage Federal Credit Union

Bethpage Federal Credit Union

6 month CD APY: 1.25%
Credit union information: Bethpage Federal Credit Union, located in Bethpage, NY, was founded for employees of Grumman Plant in 1941. Since then, they’ve undergone a lot of changes to expand their membership to include anyone in the U.S.
Membership details: A one-time $5 deposit into a Bethpage savings account enables you to become a member of the credit union.
Where to open CD account: Online
Minimum balance to open: $50
Maintenance fees: $0
Early withdrawal penalties: Determined by credit union.

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on Bethpage Federal Credit Union’s secure website

 

Capital Educators Federal Credit Union

CapEd Credit Union

6 month CD APY: 1.25% (must be under 25 years old to earn APY)
Credit union information: CapEd Credit Union focuses on supporting teachers in Idaho, but is open to almost anyone.
Membership details: To become a member, you must work, volunteer, or have retired from the educational industry in Idaho. If you have a family or household member who works, volunteers, or has retired from Idaho’s educational system, you can also qualify for membership. Finally, if you have a family or household member who is already a CapEd member then you are eligible for membership.
Where to open CD account: Online
Minimum balance to open: $250
Maintenance fees: $0
Early withdrawal penalties: The lesser of 90 days’ interest, interest earned within the number of days between opening the account to the date of withdrawal, or seven days’ interest if withdrawn before seven days.

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on Capital Educators Federal Credit Union’s secure website

Pros and cons of using 6 month CDs

Pros:

  • The CD rates offered by banks and credit unions are generally higher than those on savings accounts.
  • The rates are fixed and guaranteed for the length of their term.
  • The discipline of keeping the funds in the CD means the money will be available upon maturity. (Note: Most banks offer a seven-day grace period to reinvest or withdraw the investment, after which the funds will roll over into a new CD. However, you are not guaranteed the same rate.)

Cons:

  • Six-month CD rates are lower than those offered on longer CD investment terms.
  • To tap into the CD funds — even for emergencies — consumers must accept a loss through penalties, which can include a percentage of the funds, a percentage of the earned interest, or a combination of both. A typical penalty on a short-term CD is between 30 and 90 days’ worth of interest earnings.
  • If you’re not confident you can do without access to the funds for six months, you may be better off putting your money in a traditional savings account, which is likely to earn less interest than a CD.
  • Since CD rollovers may reset at a different percentage rate, consumers must speak with the bank before the grace period ends to ensure they are getting the best deal.

Using a 6 month CD for laddering

A CD ladder comprises small-amount CDs with varying terms and respective interest rates that contribute to a long-term investment strategy. After the 6 month CD matures, investors can withdraw the funds for a predetermined expense. Or, they can reinvest the money into a longer-term CD with a better rate. By staggering the maturity dates on short-term CDs, consumers have access to their cash on a regular, predictable basis.

Where can you open a CD account?

Consumers can open 6 month CD accounts (or longer) from banks and credit unions. Bank and credit union CD rates are based on Federal Reserve rates, and there may be strategic times to pursue these short-term instruments following a rate increase.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gabby Hyman
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Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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The Best IRA CD Rates – April 2018

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.

Top IRA CD rates
Source: iStock

Perhaps you’ve decided to build a CD ladder within your IRA, or maybe you’re looking for a safe way to store your retirement cash for a specific period of time. Whatever the reason, you’re interested in getting an IRA CD and, understandably, want to know what products will give you the best rate of return.

You can get an IRA CD with terms ranging from three months to more than six years, with interest rates generally increasing with the term length. There are lots of options, so we’ve rounded up the top IRA CD rates that are available right now for a variety of terms. You’ll select your IRA CD terms based on your CD-ladder master plan or whenever you’ll need access to your money.

Every month, we choose the best IRA CD rates using data from another LendingTree company DepositAccounts.com, a database of offerings at more than 17,100 banks and credit unions. On April 5, 2018, we sorted the products by APY, then eliminated institutions with a health rating below a B. We then eliminated products that are not available nationwide. From there, we chose the IRA CD with the highest APY among products with a minimum deposit no greater than $5,000. Here are the best options. (Average CD rates referenced below are based on DepositAccounts.com data as of April 5, 2018.)

The best IRA rates in April 2018

Term

Institution

APY

Minimum Deposit Amount

3 months

Bethpage Federal Credit Union

1.25%

$50

6 months

Ally Bank

1.60%

$5,000

12 months

First Internet Bank

2.22%

$1,000

18 months

Capitol Federal Savings Bank

2.28%

$500

2 years

U.S. Postal Service Federal Credit Union

3.00%

$250

3 years

First Internet Bank

2.58%

$1,000

4 years

First Internet Bank

2.68%

$1,000

5 years

American Bank

3.00%

$250

Rates as of April 19, 2018

3 Month IRA CD – Bethpage Federal Credit Union, 3 Month IRA (Traditional, Roth)

Bethpage Federal Credit Union

Three-month IRA CDs typically offer the lowest interest rates of any IRA CD term. Bethpage offers the best rate of 1.25% APY and a minimum deposit of $50. That rate is well above the national average.

6-Month IRA CD – Ally Bank, IRA High Yield 6-Month CD

Ally Bank

Six-month IRA CDs typically earn a little bit better, but they’re still not great. Ally Bank offers the highest interest rate at 1.60% APY for deposits between $5,000 and $25,000. That translates into earnings of $39.84 on a $5,000 deposit. If you deposit less than $5,000, you can still earn a decent APY of 1.50%. If you deposit $25,000 or more, you’ll earn a 1.75% APY. Compare that to the average of all regular 6 month CDs, at 0.49%.

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1-Year IRA CD Rates – First Internet Bank, 12 Month IRA (Traditional, Roth)

First Internet Bank

Regular one-year CDs earn an average interest rate of 0.78% APY. First Internet Bank, however, is offering a one-year IRA CD at 2.22% APY. You’ll need a $1,000 minimum deposit to earn $21.70 in interest once the CD matures.

18-Month IRA CD Rates – Capitol Federal Savings Bank, 18 Month Variable IRA (Traditional, Roth, CESA)

Capitol Federal Savings Bank

18-month regular CDs earn an average interest rate of 0.97% APY. Capitol Federal Savings Bank on the other hand, is currently offering 2.28% APY on an 18-month IRA CD. This would translate into earnings of $17.20 with a minimum $500 deposit.

2-Year IRA CD Rates – U.S. Postal Service Federal Credit Union, 24 Month IRA (Traditional, Roth, CESA)

U S Postal Service Federal Credit Union

Two-year regular CDs earn an average interest rate of 1.06% APY. U.S. Postal Service Federal Credit Union, on the other hand, is currently offering 3.00% APY on a 2-year IRA CD. This would translate into earnings of $15.23 with a minimum $250 deposit.

3-Year IRA CD Rates – First Internet Bank, 36 Month IRA (Traditional, Roth)

36 Month CD from First Internet Bank
Three-year regular CDs are earning an average interest rate of 1.27% APY currently. First Internet Bank is nearly doubling that, with an interest rate of 2.58% APY with their 36-month IRA CD. With those interest rates and a $1,000 minimum deposit, you would earn $79.41 when the certificate matures.

4-Year IRA CD Rates – First Internet Bank, 48 Month IRA (Traditional, Roth)

48 Month CD from First Internet Bank

Four-year regular CDs are currently earning an average interest rate of 1.45% APY. First Internet Bank again claims the top interest rate for these IRA CDs, with an interest rate of 2.68% APY. You would earn $111.59 on this CD with a $1,000 minimum deposit.

5-Year IRA CD Rates – American Bank – 60 Month Promo IRA (Traditional, Roth)

60 Month CD from American Bank

Five-year IRA CDs hold the top spot for interest rates out of any category on our list. National averages for a regular 5-year CD is 1.73% APY, however American Bank outperforms the average with a 3.00% APY on its 5-year IRA CD for members. The minimum deposit is $250 to earn this APY.

6+ Year IRA CD Rates – Michigan State University Federal Credit Union, 7 Year IRA (Traditional, Roth, CESA)

Michigan State University Federal Credit Union

Interestingly, these very-long-term IRA CDs don’t offer higher interest rates than the shorter-term five-year IRA CDs. Michigan State University Federal Credit Union offers the highest term for their seven-year IRA CD, at 2.75% APY. That’s still a lot less than Connexus Credit Union which offers a 3.00% APY for a five-year IRA CD. Still, with Michigan State University Federal Credit Union’s seven-year IRA CD, you would earn $522.82 on a minimum deposit of $2,500 when the IRA CD matures.

3 questions to consider before opening an IRA CD

Opening an IRA CD generally requires filling out a form or talking to a banker. You’ll have to have a way to fund your IRA CD, whether that’s rolling over an existing retirement account into an IRA CD or depositing cash into the product. The same limits that apply to IRA contributions apply to IRA CDs: $5,500 per year ($6,500 if you’re over age 50) of your own money across all your IRA accounts each year, and you can do a rollover once per year.

Unless you’ve invested in a bump-up IRA CD, you won’t be able to take advantage of a higher rate until your CD matures. Withdrawing funds from an IRA CD before they mature will result in a stiff penalty. Bump-up IRA CDs give you a chance to increase your interest rate to a higher level if it’s available, but you’re generally only allowed to do this once or twice during the life of the CD.

You can either use the the direct-transfer method or the indirect-transfer method. The direct transfer method requires setting up your new IRA account filling out a form authorizing the bank or credit union to transfer money from the old account into the new account. The indirect transfer method involves you asking for a check from your old IRA account. You have up to 60 days to deposit that check into your IRA CD to avoid incurring a penalty.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
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Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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The Best Credit Union CD Rates – April 2018

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.

The top credit union CD rates
Source: iStock

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?

On average, yes. As of December 2017, the average one-year credit union CD had a 0.68% annual percentage yield (APY), compared to the 0.54% APY average among one-year bank CDs.

Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of April 13, 2018. We then eliminated any credit union with a health rating lower than a B and identified the top three offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

Unify Financial Credit Union – 1-Year Share Certificate, 1.00% APY, min. deposit $1,000

UNIFY Financial Credit Union
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.00%, compared to the national average of 0.68% in December. You would earn $8.50 on a $1,000 deposit. If you withdraw your money early, however, you’ll face a penalty of 90 days’ worth of interest.

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on UNIFY Financial Credit Union’s secure website

NASA Federal Credit Union – 1-Year Share Certificate, 0.75% APY, min. deposit $1,000

NASA Federal Credit Union
If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

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on NASA Federal Credit Union’s secure website

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

USAlliance Financial – 12 Month CD, 2.07% APY, min. deposit $500

USALLIANCE Financial
Membership to USAlliance Financial is open to anyone who lives, works or worships in certain counties of Massachusetts, the city of West Haven, Conn., and a few districts in New York. However, if you don’t qualify by location, you can qualify by giving USAlliance authorization to make you a member of various organizations, including the American Consumer Council, if you aren’t already a member of these organizations. Keep in mind that these organizations may request fees.

Once you’re a member of USAlliance Financial, you can open a 12-month CD with a minimum of $500. Their early withdrawal penalty equals 180 days’ worth of interest earned on the amount you withdraw.

LEARN MORE Secured

on USALLIANCE Financial’s secure website

PenFed Credit Union – 1-Year Money Market Certificate, 2.07% APY, min. deposit $1,000

PenFed Credit Union
PenFed tops this list with an APY of 2.07%. With a minimum deposit of $1,000, you could earn $20.70 in one year. Interest is compounded daily and posts to accounts monthly. However, be aware of the steep early withdrawal penalty. If you withdraw funds before the year is up, you may forfeit all interest accrued up to that point.

Eligibility for this credit union is mainly based on military status, governmental employment status, affiliation with certain associations and organizations or relation to eligible members. However, if you don’t qualify through those criteria, getting a membership to this credit union is not difficult if you’re willing to pay a one-time fee of $17 to either Voices for America’s Troops or the National Military Family Association.

LEARN MORE Secured

on PenFed Credit Union’s secure website

NCUA Insured

Latino Credit Union – 12 Month CD, 2.05% APY, min. deposit $500

Latino Credit Union
To become a member of Latino Credit Union, anyone can simply donate $10 to the Latino Community Development Center. Once you become a member of this credit union, you’ll be able to take advantage of their 2.05% APY by depositing $500. Early withdrawal penalties are worth 90 days of interest on their 12 month CD.

LEARN MORE Secured

on Latino Credit Union’s secure website

Alliant Credit Union – 12-17 Month Share CD, 2.05% APY, min. deposit $25,000

Alliant Credit Union

With a minimum deposit of $1,000, you could earn an APY 2.00% on a 12-17 month CD. If you deposit $25,000 or more, you would be able to earn an APY of 2.05% with the same term. An early withdrawal penalty of 90 days’ worth of interest may be imposed if you withdraw funds prior to the CD’s maturity date.

With a $10 donation to Foster Care to Success, you can easily become a member of Alliant Credit Union. You can also become a member if you are an employee or retiree of certain organizations, related to existing Alliant members, or live or work in qualifying communities.

LEARN MORE Secured

on Alliant Credit Union’s secure website

Lake Michigan Credit Union – 12 Month Special VIP CD, 2.02% APY, min. deposit $500

Lake Michigan Credit Union
With a $5 donation to the ALS Foundation, anyone can join Lake Michigan Credit Union. If you live in Michigan or Florida, you’ll also qualify for membership. Once you become a member of the credit union, you’ll be able to open their 12 month CD with a $500 deposit.

With a minimum of $500, you’ll earn $10.10 by the end of the term. However, if you withdraw funds early, you’ll be penalized with a significant amount of interest.

LEARN MORE Secured

on Lake Michigan Credit Union’s secure website

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2017 mobile banking app analysis.

Redstone Federal Credit Union – 12 Month MemberPlus Regular Share Certificate, 1.75% APY, min. deposit $1,000

Redstone Federal Credit Union
Similar to Wright-Patt CU, you can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.

However, if you do qualify for membership, you could earn an APY of 1.75% with a minimum deposit of $1,000. This could earn you an additional $17.50 at the end of the 12 month term. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.

LEARN MORE Secured

on Redstone Federal Credit Union’s secure website

Wright-Patt Credit Union – 1-Year Certificate, 1.74% APY, min. deposit $500

Wright-Patt Credit Union
Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

You can earn $8.70 on a 12-month CD with just a relatively small $500 deposit. However, if you’re able to deposit $100,000 or more, you’ll earn an APY of 1.85%, which will return $1,850 in interest. Early withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

LEARN MORE Secured

on Wright-Patt Credit Union’s secure website

Eastman Credit Union – 1-Year Investment Certificate, 1.40% APY, min. deposit $1,000

Eastman Credit Union
Eastman Credit Union also has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.

Eastman CU is another one of the rare credit unions that allow you to withdraw your dividends penalty-free before the maturity date, although again, doing so will lower your total returns. Currently, you can earn an interest rate of 1.40% on a 12-month CD. With a minimum deposit of $1,000, that translates into earnings of $14.00 after one year. If you withdraw your money before the CD matures, you’ll owe a penalty fee of anywhere between seven days’ worth of dividend earnings or all of your dividend earnings.

LEARN MORE Secured

on Eastman Credit Union’s secure website

Delta Community Credit Union – 1-Year Certificate, 1.10% APY, min. deposit $1,000

Delta Community Credit Union
There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 1.00% to 1.10%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.

LEARN MORE Secured

on Delta Community Credit Union’s secure website

 

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs), as of December 2017. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it’s pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Best of

The Best Business Savings Account Rates in 2018

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.

Are you looking to start or grow a business? Opening a business savings account can offer federal protection for the funds you deposit (up to $250,000) and provide a source of liquidity should inevitable expenses arise. You can earn interest while setting aside money for capital improvement or income taxes. A commercial savings account can add credibility to your business, arm you with a business debit card and help your cash flow.

The best way to choose an account that fits your needs is to start by comparing the annual percentage yield offered by banks and credit unions. Then look for benefits that might make the account attractive based on your needs. Is there a monthly maintenance fee or a minimum deposit to open? Does the bank provide ample access to ATM and online account services?

Deciding which business savings account is best for your needs can be a difficult process, but hopefully this roundup of our picks for best savings accounts will help give you a head-start.

The best business savings account rates — April 2018

Institution

APY

Minimum balance amount

First Internet Bank of Indiana

1.51%

$250,000

Community Bank of Pleasant Hill

1.50%

None

Community Bank of Raymore

1.50%

None

BofI Federal Bank

1.06%

$25,000

Digital Federal Credit Union (DCU)

1.06%

$25,000

Live Oak Bank

1.05%

None

Presidential Bank (Maryland)

0.50%

$5,000

UniBank

0.35%

$2,500

Andrews Federal Credit Union

0.31%

$100

SaviBank

0.30%

None

Source: Deposit Accounts, April 3, 2018

1. First Internet Bank, 1.51% APY, $250,000+ minimum balance amount, ATM services

First Internet Bank offers an FDIC-insured savings option for businesses with a relatively good 1.26% APY if you have a balance amount that is less than $250,000. However, if you have more than $250,000 to put in their business savings account, they’ll award you with a 1.51% APY. Unfortunately, the FDIC only insures up to $250,000. So, if you deposit more than $250,000 into the savings account, the excess deposit amount will not be insured by the FDIC.

It costs $100 to open your business account and you must maintain an average daily balance of $1,000 to avoid a $2 monthly maintenance fee.

There is no minimum balance to open or maintain the account. Unlimited deposits can be made each month and six transfers or withdrawals are allowed without charge.

The First IB ATM cards are offered to sole proprietors only. There is no charge for ATM transactions or electronic statements. Founded in 1999 by the First Internet Bancorp, First IB offers remote banking in all 50 states.

Fine print: Only six preauthorized, automatic, PC, or telephonic transfers are allowed each month. This restriction is common among most of these institutions, however, First Internet Bank will charge you $5 per item if you go beyond the allotted six.

Restrictions on joining: none.

on First Internet Bank’s secure website

2. Community Bank of Pleasant Hill, 1.50% APY, No minimum balance

With its 1.50% APY, the Business Premier Money Management Account at Community Bank of Pleasant Hill offers highly competitive rates to explore. You need only put down $25 to open the account and maintain a minimum balance of $10,000 to avoid a $10 monthly service charge and $4 paper statement fee.

ATM access is offered surcharge-free when using ATMs in the MoneyPass® network. Community Bank began operations on Dec. 6, 2006, and is a member of the FDIC. Members can search for partner ATMs online or through mobile access.

Fine print: Just watch out for hefty withdrawal fees. You can make free withdrawals on the second and fourth Wednesdays of the month; on other days, there’s a $25 withdrawal fee. If you plan to make regular in-person withdrawals, this probably isn’t the best account for your needs.

Restrictions on joining: none.

LEARN MORE Secured

on Community Bank Of Pleasant Hill’s secure website

3. Community Bank of Raymore, 1.50% APY, $25 minimum deposit to open

The Community Bank of Raymore created its Premier Money Management Account specifically for business customers who carry high balances and are looking for security. It costs $25 to open your account but you’ll earn a solid 1.50% APY.

You must maintain a balance of at least $10,000 or you’ll be assessed a monthly $10 charge. You may only make free withdrawals on the second and fourth Wednesdays or face a $25 fee.

Electronic statements are free of charge. Nationwide ATM service without charge is available through the MoneyPass® network.

The Community Bank of Raymore was chartered in Missouri in May 15, 1979. According to the bank website, the idea of the bank originated at a community meeting at Raymore Elementary School in 1976.

Fine print: You’ll be restricted to two days a week for making free withdrawals in Raymar, too, on the second and fourth Wednesdays of the month. Other days, you’ll have to cough up $25.

Restrictions on joining: none.

LEARN MORE Secured

on Community Bank Of Raymore’s secure website

4. BofI Federal Bank: 1.06% APY, $25,000 minimum balance, ATM access

BoFI Federal Bank offers one of the top APY rates in the DepositAccounts nationwide survey of business savings accounts. The bank’s Business Premium Savings Account with a high-yield 1.06% APY can be opened with a $25,000 minimum deposit.

There is no monthly maintenance fee for the account and no average daily balance requirement.

BoFI also makes it easy to access your funds when you need it. Customers have ATM access to their accounts along with free online banking. However, ATM withdrawal limits are $1,010 per day and there’s a daily purchase limit of $5,000. BofI is an FDIC-insured bank based in San Diego and publicly traded online. Other products include Business Interest Checking and Business Money Market accounts.

LEARN MORE Secured

on BofI Federal Bank’s secure website

5. Digital Federal Credit Union (DCU), 1.00% APY, $25,000 minimum balance

Digital Federal Credit Union offers a solid 1.00% APY rate through its Business DCU Ltd Savings Account with a minimum $25,000 balance.

Businesses participating in the DCU Ltd Savings Account receive 24/7 online banking, mobile banking through the DCU Mobile Banking App, access to DCU ATMs, deposits, transfers or balance verification. Watch out for their ATM fees, though. They charge $0.75 per withdrawal from a non-DCU ATM, which will surely add up if you make regular withdrawals. Created by the Digital Equipment Corporation in 1979, DCU is the largest credit union in Massachusetts by assets. Federally insured by NCUA, DCU is based in Marlborough, Mass.

Restrictions on joining: To join, you must meet eligibility requirements within the field of membership for employers, organizations, participating communities or condominium associations.

LEARN MORE Secured

on Digital Federal Credit Union (DCU)’s secure website

6. Live Oak Bank, 1.05% APY, No minimum balance

Live Oak Bank awards 1.05% APY on its business accounts are eight times the national average. There is no minimum opening balance or deposit required to open a business savings account.

The business savings account is open to deposits of up to $5 million and is free of monthly maintenance fees. You may make up to 6 withdrawals from your Live Oak Bank Savings account per statement cycle, including preauthorized, automatic and telephone transfers. After that there’s a $10 fee per withdrawal. Live Oak Bank, established in 2008, holds assets of $2.12 billion.

The bank is in Wilmington, N.C., and is a member of the FDIC. Learn more about business savings at Live Oak Bank.

Small Print: The bank may verify credit and employment history at its discretion, meaning you may receive a pull against your credit report.

Restrictions on joining: none.

LEARN MORE Secured

on Live Oak Bank’s secure website

7. Presidential Bank (Maryland), up to 0.50% APY, $5,000 to open, ATM services

Presidential Bank’s Commercial Premier Savings account offers 0.50% APY for balances up to $35,000, making it a decent — if not extraordinary — bet for business owners.

Business customers are not required to maintain a minimum balance on the account in order to receive all ATM privileges. So long as you use one of their ATMs you won’t incur fees, but there is a $0.75 ATM fee for non-network ATMs. Free online banking, mobile banking and ATM card come with the account.

Established in 1985, Presidential Online Bank was one of the first lenders to offer online banking. Located in Bethesda, Md., it currently lists assets in excess of $550 million.

Restrictions on joining: none.

LEARN MORE Secured

on Presidential Bank’s secure website

8. UniBank, 0.35% AYP, $25,000 minimum balance, $500 to open, ATM services

The Business Regular Savings account at UniBank currently pays out 0.35% AYP for all accounts starting at $2,500. It costs $500 to open your business account and the monthly service fee is $12.

You can have that service fee waived by maintaining a $2,500 minimum daily balance. Customers have online, telephone and ATM access to their business accounts. There are more than 25,000 surcharge-free UniBank ATMs available through the MoneyPass® network.

Established in 2006, the bank is located in Lynnwood, Wash. While its business savings account rates leave much to be desired, the bank’s strength may lie in its current money market rates, which Deposit Accounts says are 70 percent higher than the national average.

Restrictions on joining: none.

LEARN MORE Secured

on UniBank’s secure website

9. Andrews Federal Credit Union, 0.31% APY, $100 minimum balance, ATM banking

The Business Base Share Savings account at Andrews Federal Credit Union offers a 0.31% APY. You can open the account with as little as $5 and there is a $100 minimum balance requirement to earn the APY.

The account comes with free online banking, free eStatements and a debit card. Transactions are free at Andrews Federal & CO-OP ATMs. However, there is a $25 charge for withdrawals that result in overdrafts.

Founded in 1948 in Suitland, Md., Andrews Federal Credit Union has assets over $1.5 billion and offers a range of banking services to 120,000 members worldwide.

Restrictions on joining: $5 fee to join the credit union. Open to field of membership including nationwide membership eligibility through the American Consumer Council.

LEARN MORE Secured

on Andrews Federal Credit Union’s secure website

10. SaviBank, 0.30% APY, $100 to open, ATM services

Rounding out the top 10, the business savings accounts at SaviBank offer a decent 0.30% APY. It costs $100 to open the account. If you keep a minimum daily balance of $250, the bank dismisses a $5 monthly service charge.

Checks and third-party withdrawals are limited to six for each calendar month.

Established in Burlington, Wash., in 2005 as Business Bank, SaviBank offers 24-hour access to accounts through online banking and surcharge-free ATM locations nationwide over the MoneyPass® network.

Restrictions on joining: none

LEARN MORE Secured

on SaviBank’s secure website

Learn more about business savings accounts

How we ranked the best business savings accounts

To come up with this list, we first used data from DepositAccounts.com, which tracks rates on a range of deposit accounts across thousands of banks in the U.S. Note: DepositAccounts is also owned by MagnifyMoney’s parent company LendingTree.com.

We eliminated any institutions that were given a health rating below a B by DepositAccounts. We also weeded out any credit unions that have very restrictive membership requirements. From there, we chose the top 10 business savings accounts with the highest APY. And lastly, all the banks on our list offer FDIC or NCUA insurance.

Business savings accounts vs personal savings accounts

Business and regular savings accounts may offer many of the same features ,such as 24/7 online banking, free electronic reporting, debit cards, fund transfers and ATM machines.

The trade-off in choosing a business account is that you’ll get services focused on business planning and spending in exchange for a less-desirable APY.

When you compare the interest earned on a business savings account with the best APY rates offered on savings accounts, it may not look like opening a business account is a wise strategy. The top business savings account APY right now is 1.32%. The top APY among personal savings accounts is 1.60% with no minimum deposit and ATM access. You can weigh the services, charges and minimum account fees between the top business and top personal savings accounts to decide which is best for you.

There are other benefits to offset any differences in earnings, particularly if your business is incorporated. It’s considered sound business practice to separate your personal saving and checking accounts from your business saving and checking accounts. A business account can help you manage cash flow, accounting, recordkeeping and working capital. At income tax time, separate accounts can help you differentiate business from personal expenses.

Paired with a business checking account, your business savings account can add professional branding, since all payments and correspondence with clients will bear your business name.

Or you can create savings in your business account to pay quarterly income taxes or purchase equipment.

Finally, business savings accounts are secure when you open accounts with banks and credit unions that are insured up to $250,000 per account by the FDIC or the NCUA.

North Shore Bank of Brookfield, Wis., says that a business savings account can boost your credit ratings and make it easier to obtain a business loan, since the lender can see you have an account dedicated to your company.

Choosing the right business savings account

When evaluating a financial institution for your business, there’s more than just finding a good APY.

Many of the banks on our Top 10 list look great on the APY front but carry fees that can eat into any of the returns you might make. Particularly, watch out for fees for ATM or bank withdrawals, monthly service fees and ATM fees.

The Small Business Administration (SBA) has identified the key factors to consider when searching for the right bank or credit union. These include:

  • Customer service reputation
  • Access to branches or no-surcharge ATMs
  • Benchmarks to have fees waived
  • Automatic FDIC insurance

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Gabby Hyman
Gabby Hyman |

Gabby Hyman is a writer at MagnifyMoney. You can email Gabby here

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Best of

7 Low Interest Rate Credit Cards – April 2018

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.

Carrying a balance on your credit card is never ideal, but sometimes it’s unavoidable. And with credit card interest charges that can be upward of 25.00% APR, it can be hard to get out of debt because a large portion of your payment goes to interest.

Currently, you may find yourself struggling to pay off your balance, but worry not — there are low interest cards that have APRs starting at around 6%.

Low-interest cards are a great way to save money on interest when you find yourself carrying a balance. The APRs on these cards max out around 18% on average. Some low-interest cards mentioned here even have 0% APR intro periods that are helpful if you have an existing balance on a credit card and want to transfer it, or if you plan on making purchases that you need several months to pay off.

The seven main cards in this post are from credit unions, which often have lower rates than large banks. But they require memberships, which are sometimes restricted to certain states. In this post, we’ll explain the seven lowest interest-rate credit cards and what’s required to qualify. These cards are based on a usage period of around 24 months or more, which is typically not long enough for most intro 0% APR cards.

7 low interest rate credit cards

Visa® Titanium Signature Rewards Card from Andrews Federal Credit Union

Visa<sup>®</sup> Titanium Signature Rewards Card from Andrews Federal CU

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

6.99%-18.00%

Variable

APPLY NOW Secured

on Andrews Federal Credit Union’s secure website

The Visa® Titanium Signature Rewards Card from Andrews Federal Credit Union has the lowest ongoing APR on our list. If you qualify for the lowest rate and end up carrying a balance, you may be charged little interest (compared with higher APR cards). This card is a good option if you have existing debt on a credit card, because you can transfer it during the balance transfer intro period.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for 12 months on purchases
  • Intro balance transfer APR: 0% for 12 months on balance transfers processed within 90 days of account opening
  • Balance transfer fee: 1.5% of the transfer amount or $50; whichever is greater

How to qualify: Anyone can apply for this card, regardless of residence. If you don’t meet one of the several eligibility requirements, you can join the American Consumer Council for a one-time $5 donation if you have used a major consumer product or service in the past 12 months, such as a motor vehicle, insurance, or housing.

TruWest Visa Platinum Card

TruWest Visa Platinum Card

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

7.45%-21.75%

Variable

APPLY NOW Secured

on TruWest Credit Union’s secure website

The regular purchase APR on the TruWest Visa Platinum Card has a wider range than the other cards on this list. However, this card has the longest 0% intro APR period from a credit union at 0% for 18 billing cycles on purchases and balance transfers. This is a large amount of time for you to carry a balance interest-free.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for 18 billing cycles
  • Intro balance transfer APR: 0% for 18 billing cycles
  • Balance transfer fee: 3%

How to qualify: Unfortunately, not everyone can apply for this card. It is restricted to people who live, work, own a business, or go to school in select Arizona and Texas communities or who work for select employers. You can read more about membership eligibility on TruWest’s website.

Visa® Platinum Card from Trustmark Bank

Visa<sup>®</sup> Platinum Card from Trustmark Bank

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

7.65%-12.65%

Variable

APPLY NOW Secured

on Trustmark Bank’s secure website

The Visa® Platinum Card from Trustmark bank has a great low APR range. This is the best range on the list when considering both the minimum and maximum APR, and it benefits people who may not have the best credit because the highest interest rate is still lower than most credit cards. So what’s the catch? Unfortunately, this card has restricted membership (see below for details) and the 0% APR intro periods are very low compared to other cards.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for the first 6 billing cycles
  • Intro balance transfer APR: 0% for the first 6 billing cycles
  • Balance transfer fee: None

How to qualify: Anyone can apply, however you can’t apply online. You either have to go to one of their locations or call and have an application mailed to you.

BECU Visa® Card from Boeing Employees CU

BECU Visa<sup>®</sup> Credit Card from Boeing Employees CU

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

8.15%-19.15%

Variable

APPLY NOW Secured

on BECU (Boeing Employees Credit Union)’s secure website

The BECU Visa® Card from Boeing Employees CU is an overall standout card with a reasonable APR and great additional perks. For example, there is a Reprice Program where BECU will lower your rates as your credit score improves. This is a great feature, especially for people who don’t qualify for the lowest rate. Additionally, there are limited fees, such as no balance transfer fee — allowing you to maximize savings when you transfer debt from another card.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for 12 months
  • Intro balance transfer APR: 0% for 12 months
  • Balance transfer fee: None

How to qualify: This card has restricted membership with several ways to qualify: you need to live in Washington State or select counties in Oregon, have a relationship with select employers or associations, or have a business or organization that meets certain requirements. Find out more about membership here.

Visa® Advantage Card from NEFCU

Visa® Advantage Card from NEFCU

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

9.49%-17.99%

Variable

APPLY NOW Secured

on NEFCU’s secure website

The Visa® Advantage Card from NEFCU can be a decent option for Long Islanders who may carry a balance at some point. Note that the APR range is higher than other cards on this list, but your best option depends on cards’ membership criteria. The intro period for this card is sub par compared to others because the APR is greater than 0%.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 1.99% for 12 months (as low as 9.49% thereafter)
  • Intro balance transfer APR: None
  • Balance transfer fee: None

How to qualify: This card is open to all Long Islanders. That means if you live, work, or attend school in Nassau or Suffolk counties in New York, you may qualify. You can also gain membership through a family member. Click here for more info on eligibility.

TruWest Platinum Points Visa Rewards Card

TruWest Platinum Points Visa Rewards Card

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

9.40%-16.40%

Variable

APPLY NOW Secured

on TruWest Credit Union’s secure website

The starting APR for the TruWest Platinum Points Visa Rewards Card is a bit higher than other low interest cards, but the max APR is fairly low. Similar to the TruWest Visa Platinum Card, the TruWest Platinum Points Visa Rewards Card has a long 0% APR intro period of 18 months. This card also comes with a rewards program where you can automatically earn up to one point per dollar spent, though we recommend using this card to pay down debt and not earn rewards.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for 18 months
  • Intro balance transfer APR: 0% for 18 months
  • Balance transfer fee: 3%

How to qualify: Like the other TruWest card, this card is restricted to people who live, work, own a business or go to school in select Arizona and Texas communities or who work for select employers. You can read more about membership eligibility on TruWest’s website.

Visa® Platinum Credit Card from NIHFCU

Visa<sup>®</sup> Platinum Card from nih FCU

Annual fee

$0 For First Year

$0 Ongoing

Regular Purchase APR

9.49%-18.00%

Variable

APPLY NOW Secured

on Nih FCU’s secure website

The Visa® Platinum Credit Card from NIHFCU has the highest starting APR of all the cards on this list. However, there is a decent 0% APR intro period of 12 months, and the balance transfer fee is lower than average.

Here are features to know about when using this card to pay off debt:

  • Intro purchase APR: 0% for 12 months
  • Intro balance transfer APR: 0% for 12 months
  • Balance transfer fee: $10 or 2% of the amount of each balance transfer, whichever is greater

How to qualify: This card restricts membership to people in the biomedical and healthcare industries in Md., N.C., Va., W.Va., or Washington D.C. You can also qualify if a family member is a current NIHFCU member. Visit NIHFCU’s site for more details.

Other options

Below, we’ve compiled a few options if you want a 0% APR intro card or if you want to consider a balance transfer card. All of these cards come from major banks, so anyone can apply.

Cards with a 0% APR intro period

Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer

Citi<sup>®</sup> Diamond Preferred<sup>®</sup> Card– 21 Month Balance Transfer Offer

Intro BT APR

0%* for 21 months on Balance Transfers*

Balance Transfer Fee

5% of each balance transfer; $5 minimum.

Regular Purchase APR

14.49% - 24.49%* (Variable)

APPLY NOW Secured

on Citibank’s secure website

The Citi® Diamond Preferred® Card– 21 Month Balance Transfer Offer has one of the longest intro 0% periods for balance transfers on the market, at intro 0%* for 21 months on Balance Transfers*. This is over a year and a half for you to rid yourself of debt. Note that there is a balance transfer fee of 5% of each balance transfer; $5 minimum.. There is also an intro 0%* for 12 months on Purchases*. After the intro periods end, the APR is 14.49% - 24.49%* (Variable).

Cards with a 0% APR balance transfer intro period

Sphere® Credit Card from Santander

Sphere<sup>®</sup> Credit Card from Santander

Intro BT APR

0%

Promotional rate

Balance Transfer Fee

$10 or 4% of the amount of the transfer, whichever is greater

Regular Purchase APR

13.99%-23.99%

Variable

APPLY NOW Secured

on Santander’s secure website

The Sphere® Credit Card from Santander has one of the longest balance transfer intro periods in our database at 0% APR for the first 18 billing cycles your account is open. Although this is a great amount of time for you to pay off transferred debt, it comes with a hefty balance transfer fee at either 4% or $10, whichever is greater. This is something to consider before choosing a card, but the balance transfer fee may be worth it if you’re saving money from high-interest payments with your current card. Transfers must be made within the first 90 days of account opening to qualify for the intro 0% APR. Purchases can also benefit from an intro 0% APR for 18 billing cycles. There is also a rewards program: Earn one reward point for every dollar spent, with no limits. However, we recommend using this card to pay off debt and not just to earn rewards.

How to qualify: This card is only available to people who live in: Conn., Washington D.C., Del., Maine, Md., Mass., N.H., N.J., N.Y., Pa., R.I., or Vt.

Chase Slate®

Chase Slate<sup>®</sup>

Intro BT APR

0% Intro APR on Balance Transfers for 15 months

Balance Transfer Fee

Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater.

Regular Purchase APR

16.49% - 25.24% Variable

APPLY NOW Secured

on Chase’s secure website

The Chase Slate® is one of our favorite balance transfer cards. It offers 0% Intro APR on Purchases for 15 months and 0% Intro APR on Balance Transfers for 15 months. This isn’t the longest intro period, but this card comes with a standout feature of an intro Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater. This can save you on the typical 2-5% balance transfer fee many other cards charge.

The bottom line

If your goal is to reduce the amount of interest you pay on your credit card debt, look at cards with low APRs and membership requirements you can meet. Remember that your credit score will be a significant factor in the APR you receive, so be sure to look at both ends of the APR ranges when comparing cards since you may not receive the lowest rate.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at alexandria@magnifymoney.com

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Best of, Credit Cards

Longest 0% Purchase Credit Card Offers From Banks & Credit Unions – April 2018

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. This site may be compensated through a credit card partnership.

0% purchase credit card
iStock

If you’re about to make a big purchase that you need time to pay off, using a 0% introductory purchase offer on a credit card could be the cheapest way to spread the payment out over time.

  • You can currently find 0% deals for as long as 21 months with no fees, but since rates after the intro period are high, only use these deals if you’re sure you can handle paying off the debt before the period is up.
  • When searching for 0% purchase cards, make sure you select a card that waives interest. Far too many cards, especially those offered by retailers only defer the interest which means you can get get a nasty surprise when the intro period is up.

Below we list the longest 0% purchase credit cards broken up by length of 0% intro period from our database of over 3,000 credit card products from banks and credit unions:

18 Months 0% Intro APR

Citi Simplicity® Card - No Late Fees Ever

Citi Simplicity<sup>®</sup> Card - No Late Fees Ever

APPLY NOW Secured

on Citibank’s secure website


Citi Simplicity® Card - No Late Fees Ever offers a long intro of 0%* for 18 months on Purchases*. This provides you well over a year to pay off any purchases without accruing interest, and you receive great perks such as no late fees, no penalty rate and no annual fee. After the intro period ends, the standard APR applies, currently 15.49% - 25.49%* (Variable) APR, depending on your creditworthiness.

TruWest Visa® Signature Card

TruWest Visa<sup>®</sup> Signature Card

APPLY NOW Secured

on TruWest Credit Union’s secure website


At 18 months, the 0% intro APR on purchases and balance transfers for the TruWest Visa® Signature Card is one of the highest for a credit union. It also has a very low ongoing variable APR of 9.40%-10.40% after the intro period ends. This card is restricted to people who live, work, own a business or go to school in select Arizona and Texas communities or who work for select employers. You can read more about membership eligibility on TruWest’s website. You can earn 1 point per dollar spent, and up to 10 extra points per dollar spent by taking advantage of bonus point offers with the Get Extra Points Rewards Program. You can also earn up to 1.5% cash back by redeeming rewards through the TruRewards program.

TruWest Visa® Platinum Card

TruWest Visa Platinum Card

APPLY NOW Secured

on TruWest Credit Union’s secure website


Another card from TruWest that offers a long intro period is the TruWest Visa® Platinum Card, with 0% intro APR for 18 months on purchases. Again, this card is only available to TruWest Credit Union members. This card has one of the lowest starting variable APR ranges at 7.45%-21.75% variable, which is beneficial for anyone who qualifies for the low rate and may carry a balance after the intro period ends (though we recommend paying off debt beforehand).

TruWest Platinum Points Visa Rewards Credit Card

TruWest Platinum Points Visa Rewards Card

APPLY NOW Secured

on TruWest Credit Union’s secure website


The TruWest Platinum Points Visa Rewards Credit Card has a competitive 0% intro period at 18 months on all purchases and balance transfers. After the intro period, the purchase APR is 9.40%-16.40% variable. As with the other TruWest cards, this one is only available to members. You can benefit from a rewards program where you automatically earn up to 1 point for every $1 you spend, and earn up to 10 extra points per dollar spent. However, this is a low rewards rate compared to other 0% intro purchase cards on this list.

U.S. Bank Visa® Platinum Card

U.S. Bank Visa<sup>®</sup> Platinum Card

APPLY NOW Secured

on U.S. Bank’s secure website


The U.S. Bank Visa® Platinum Card offers a long 0% intro period at 18 months for purchases and balance transfers (variable APR is 11.49%-23.49% when the promotional period ends); however, this card offers few other benefits. There is no rewards program, but there is cellphone protection that can reimburse you for damage or theft up to $600 (with a $25 deductible), for up to two claims ($1,200) per 12-month period when you pay your cellphone bill with your card.

Bank of Hawaii Visa Signature® Card with MyBankoh Rewards

Bank of Hawaii Visa Signature<sup>®</sup> Card with MyBankoh Rewards

APPLY NOW Secured

on Bank Of Hawaii’s secure website


Similar to the other myBankoh Rewards card, the Bank of Hawaii Visa Signature® Card with MyBankoh Rewards offers 18 months 0% intro APR on purchases and balance transfers. Afterward, the ongoing APR is 15.48% or 18.49% variable. This card is open to most U.S. residents (details above), and cardholders earn one point per dollar spent, as well as a 10% annual year-end bonus of the points earned on purchases.* If you’re not a resident of Hawaii, Guam or the Northern Mariana Islands, you must also have a deposit relationship with Bank of Hawaii to apply for this card. All U.S. residents (except those of Iowa and Puerto Rico) can apply.*

15 Months 0% Intro APR

The Amex EveryDay® Credit Card from American Express

The Amex EveryDay® Credit Card from American Express

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees


The The Amex EveryDay® Credit Card from American Express offers an intro 0% for 15 Months on purchases and balance transfers. After that, your APR will be 14.49%-25.49% Variable. This card is a great choice for people who want to take advantage of the 0% intro periods and earn rewards. With the cash back program, you can earn 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x), 1x points on other purchases.

Chase Freedom Unlimited®

Chase Freedom Unlimited<sup>®</sup>

The Chase Freedom Unlimited® provides a 0% Intro APR for 15 months
on purchases and a 0% Intro APR for 15 months on balance transfers — that is shorter than other flat-rate cash back cards. After those 15 months, purchases are subject to a standard APR of 16.49% - 25.24% Variable. With the cash back program, you can earn unlimited 1.5% cash back on every purchase – it’s automatic.
The information related to the Chase Freedom Unlimited® Card has been collected by MagnifyMoney.com and has not been reviewed or provided by the issuer of this card.

Chase Freedom®

Chase Freedom<sup>®</sup>

APPLY NOW Secured

on Chase’s secure website


The 0% Intro APR on Purchases for 15 months on purchases and 0% Intro APR on Balance Transfers for 15 months means that the Chase Freedom® offers is complemented with a cash back program that is great for those looking to maximize cash back in bonus categories. You can Earn 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories every 3 months. Unlimited 1% cash back on all other purchases. After the promotional period, the purchase APR is 16.49% - 25.24% Variable.

Chase Slate®

Chase Slate<sup>®</sup>

APPLY NOW Secured

on Chase’s secure website


The Chase Slate® has a decent 0% Intro APR on Purchases for 15 months, then 16.49% - 25.24% Variable APR, but you can find other cards with longer periods, and/or rewards. This card is predominantly known for its balance transfer offer where you get 0% Intro APR on Balance Transfers for 15 months and an intro Intro $0 on transfers made within 60 days of account opening. After that: Either $5 or 5%, whichever is greater.

BankAmericard® Credit Card

BankAmericard® Credit Card

APPLY NOW Secured

on Bank Of America’s secure website


The BankAmericard® Credit Card has an average intro period for purchases at 0% intro APR for 15 billing cycles (after that, the purchase APR is 13.49%-23.49% variable). There are no rewards; however, this card shines with its balance transfer period of 0% intro APR for 15 months and $0 intro balance transfer fee for transfers made within 60 days of account opening. After that, the fee for future balance transfers is 3% with a minimum of $10.

Blue Cash Everyday® Card from American Express

Blue Cash Everyday® Card from American Express

APPLY NOW Secured

on American Express’s secure website

Terms Apply

Rates & Fees


The Blue Cash Everyday® Card from American Express offers an introductory 0% for 15 months on purchases and balance transfers. After that, your APR will be 14.49%-25.49% Variable. There is also a cash back program — earn 3% cash back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%). 2% cash back at U.S. gas stations and at select U.S. department stores. 1% cash back on other purchases.

Citi ThankYou® Preferred Card

Citi<sup>®</sup> ThankYou<sup>®</sup> Preferred Card

APPLY NOW Secured

on Citibank’s secure website


The Citi ThankYou® Preferred Card offers a competitive intro 0%* for 15 Months on purchases when compared to other dining rewards cards. (After the intro period, the APR will be 14.99% - 24.99%* (Variable), based on your creditworthiness.) The rewards program benefits frequent diners and those who enjoy entertainment — earn two points per dollar spent on dining out and entertainment, and one point per dollar on all other purchases.

Wells Fargo Platinum Card

Wells Fargo Platinum Visa® Card

APPLY NOW Secured

on Wells Fargo Bank’s secure website


The Wells Fargo Platinum Card has a long period for you to pay off debt with a 0% intro APR for 15 months on purchases and balance transfers. Following the intro period, the variable APR on purchases will be 16.65%-26.49%. Besides the promotional APR, this card is fairly basic. It does have one other notable perk: You can receive up to $600 of cellphone protection (subject to $25 deductible) against eligible reasons when you pay your monthly cellphone bill with your card.*

PNC Core® Visa® Credit Card

PNC Core<sup>®</sup> Visa<sup>®</sup> Credit Card

APPLY NOW Secured

on PNC Bank’s secure website


The PNC Core® Visa® Credit Card is a basic card that offers 0% intro APR for 15 billing cycles on purchases for the first 15 billing cycles, then 11.49% to 21.49% variable APR, based on your credit. There is no rewards program or noteable perks. However, there is U.S.-based customer service available 7 days a week.

Truly Simple® Credit Card from Fifth Third Bank

Truly Simple<sup>®</sup> Card from Fifth Third Bank

APPLY NOW Secured

on Fifth Third Bank’s secure website


This card offers a decent intro period at 0% APR for 15 billing cycles, however this card is restricted to residents of Ohio, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, North Carolina, Tennessee and West Virginia. There is also no penalty APR if you miss a payment. The standard APR of 13.49%-24.49% variable applies after the intro period ends.

BB&T Bright Card

BB&T Bright Card

APPLY NOW Secured

on BB&T’s secure website


The BB&T Bright Card offers a good intro period from a community bank at 0% intro APR for 15 months on purchases and balance transfers (variable 12.65%-21.65% variable APR after). Note that this card is restricted to residents of Alabama, Florida, Georgia, Indiana, Kentucky, Maryland, North Carolina, New Jersey, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, D.C., and West Virginia.

APGFCU Visa® Platinum Preferred Rewards Credit Card

Visa<sup>®</sup> Platinum Preferred Rewards from APG FCU

APPLY NOW Secured

on Aberdeen Proving Ground FCU’s secure website


This card offers a competitive 0% intro APR on purchases and qualified balance transfers compared to other credit unions at 0% intro for 15 months (11.99%-17.99% variable after). To qualify for this card you need to live, work, worship, attend school, or volunteer in Harford or Cecil County or certain areas in Middle River, Maryland. There is a subpar rewards program where you can earn one point for every dollar spent on purchases.

KeyBank Latitude® Credit Card

KeyBank Latitude<sup>®</sup> Credit Card

APPLY NOW Secured

on KeyBank’s secure website


The KeyBank Latitude® Credit Card has a decent intro period at 0% on purchases and balance transfers for the first 15 billing cycles (11.49%-21.49% variable APR after, based on creditworthiness). This card is restricted to people who live in Alaska, Colorado, Connecticut, Florida, Idaho, Indiana, Maine, Massachusetts, Michigan, New York, Ohio, Oregon, Pennsylvania, Utah, Vermont and Washington. There is no rewards program.

Deferred versus Waived Interest

Not all 0% offers are created equally. Some credit card companies offer “deferred” interest, whereas others off “waived” interest.

Let’s take a simple example. You spend $1,000 on a credit card with an APR of 18%. You will make payments of $75 every month. There is a special offer that gives you 0% interest for 12 months. On “Credit Card A” interest is deferred. On “Credit Card B” it is waived. After making 12 payments of $75, the remaining balance in month 13 would be $100.

Credit Card A: Deferred Interest

With a “deferred” interest offer, the bank does not forgive the monthly interest accrual. Instead, the bank just keeps track of the interest that would have accrued. If you do not pay the balance in full during the promotional period, you will get retroactively charged the interest at a high interest rate. In the example above, you would be charged approximately $117 in month 13. (I use “approximately” because credit card companies have slightly different ways of calculating and charging interest. But it is safe to assume that you would be charged more than $100 of interest on your remaining $100 balance.)

Credit Card B: Waived Interest

Waived interest is very different. For every month of the promotional period, the credit card company actually forgives the interest. There will never be a retroactive catch up after the promotional period ends. In our example, you would only be charged $3.26 of interest in month 13, compared to more than $100 in the deferred example.

Deferred interest products are surprisingly common. If you are being offered 0% financing by a retailer, you are probably being offered a deferred interest product.

How To Qualify For A 0% Purchase Credit Card

In order to qualify for a 0% intro purchase credit card, you will need to have good credit. If your credit score is above 700, you are highly likely to be approved by one of the issuers. If your score is between 650 and 700, you still have a good chance.

With a credit score below 650, it is highly unlikely that you would be approved, though you may want to check to see if you are pre-qualified for a card before applying. Many of the banks let you check to see what deals they are specifically targeting to you, and you can see a list of them here. Checking what you’re pre-qualified for won’t show up on your credit report or score.

In addition to your credit score, the credit card company will want to ensure that you are employed. And most credit card companies will look at your debt burden.

If your debt burden is more than 50%, it is unlikely that you will be approved.

The lower your debt burden, the better your chances. You calculate your debt burden by dividing the monthly payments on your credit report (which would include your mortgage, auto loans, student loans, personal loans and credit cards) by your monthly paycheck before taxes are taken out.

When Is A Personal Loan Better?

There is no lower interest rate than 0%. So, if you are able to use a 0% credit card to make a purchase, that is your best bet. However, there are a few circumstances where a personal loan might be a better option:

  • Your credit score is too low for a 0% offer. Personal loan companies are offering increasingly competitive interest rates, especially for people with lower credit scores.
  • You need to borrow money for a big cash expense. For example, you might need to pay a contractor who does not accept credit cards. If you need cash, a personal loan is always a better deal than a credit card.
  • You don’t trust yourself with credit cards. Some people feel nervous with credit cards. You might be tempted to spend more than you want. Or, you might be tempted to only pay the minimum due, extending the repayment term. A personal loan can be an easy way to borrow a set amount of money for a set period of time.

If you want to consider a personal loan, you can compare and apply using our personal loan comparison tool. You can check your interest rate and see if you are approved without hurting your credit score at most lenders.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

MagnifyMoney
MagnifyMoney |

Have a question to ask or a story to share? Contact the MagnifyMoney team at info@magnifymoney.com

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Best of

Best Secured Credit Cards with Low Deposit Requirements – April 2018

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 credit cards
iStock

Secured credit cards are used as a tool to build credit history from scratch or put positive information on a credit report after negative incidents such as bankruptcy, missed debt payments or accounts in collections. By feeding positive information into a credit report, you can improve a credit score, which is essential for getting the best financial products on the market.

In order to be eligible for a secured credit card, you must provide a minimum deposit. This deposit typically serves as your line of available credit, but in some cases your line of credit may be higher. Plenty of secured cards require rather hefty minimum deposits of $300 or more, which may be prohibitive for many Americans living paycheck-to-paycheck.

Fortunately, alternatives to the high deposits exist. We’ve pulled together a list of the best secured cards that require a deposit and/or credit union membership fee of $200 or less.

$200 minimum deposit: Discover it® Secured Card - No Annual Fee

Discover it<sup>®</sup> Secured Card - No Annual Fee The Discover it® Secured Card - No Annual Fee has a minimum deposit of $200. This is our favorite secured credit card for a number of reasons including: no annual fee, the ability to earn cash back, and our favorite feature — automatic monthly reviews of your account that start at month eight. However, the one downfall of this card is the high ongoing APR, but you should always pay your bill on time and in full so you avoid interest charges.

Here are the benefits of the Discover it® Secured Card - No Annual Fee in more detail:

Automatic monthly reviews starting at month 8: Discover will start automatic monthly reviews of your account at month 8. If you qualify, you could be transitioned to an account with no security deposit. Even better, you could potentially be eligible for a bigger credit limit. This feature really sets Discover apart from the competition – and your goal should be to get back your deposit as quickly as possible through responsible credit behavior.

No annual fee: There is a $0 annual fee for this card.

Bankruptcy? No problem: If you have filed Chapter 7 bankruptcy in the past, you can still qualify for this card. It is a great way for people to rehabilitate their credit.

Earn cash back: Most secured credit cards do not offer any rewards. With the Discover it® Secured Card - No Annual Fee, you have the opportunity to earn cash back while earning rewards. You can earn 2% at restaurants and gas stations (on up to $1,000 of spend each quarter). Plus, get 1% cash back on all your other purchases. Earning cash back is not the primary reason to select a secured credit card, but it is a nice option to have available.

Free FICO® Credit Score: Discover will provide you with a copy of your official FICO® credit score. A good step in proper credit behavior is to monitor your score each month.

Read our review for more information on the Discover it® Secured Card - No Annual Fee.

How to go from a secured card to unsecured card: Discover will automatically review your account starting at month eight to see if you can be transitioned to a card without a security deposit. If you qualify, you can receive an unsecured card and your security deposit will be refunded. Note that the reviews are based on various factors, including responsible credit management across all of your credit cards and loans.

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

$49, $99, or $200 minimum deposit: Capital One® Secured Mastercard®

Capital One<sup>®</sup> Secured Mastercard<sup>®</sup>

Annual fee

$0

Minimum Deposit

$49

Regular Purchase APR

24.99% (Variable)

APPLY NOW Secured

on Capital One’s secure website

The Capital One® Secured Mastercard® offers a minimum deposit as low as $49, depending on credit worthiness. If you don’t receive the $49 minimum deposit, you may receive a deposit of $99 or $200. This may be a good option if you don’t have $200 to deposit, just remember that the $49 deposit is not guaranteed. If approved for the card, once you make your minimum required security deposit, you will receive a credit line of $200.

How to go from a secured card to unsecured card: Capital One has a new feature where they will automatically review your account for on time payments and will inform you if you’re eligible for an upgrade. If eligible, you will be refunded your security deposit and will receive an unsecured card. The catch is that there is no time frame for when your account will be reviewed. Capital One said that it depends on various credit activities.

$200 minimum deposit: Citi® Secured Mastercard®

Citi<sup>®</sup> Secured MasterCard<sup>®</sup>

Annual fee

$0

Minimum Deposit

$200

Regular Purchase APR

23.99%* (Variable)

APPLY NOW Secured

on Citibank’s secure website

The Citi® Secured Mastercard® is a no frills secured credit card. There is a $0 annual fee and a $200 minimum deposit requirement, like most cards on this list. Unfortunately, there are no rewards associated with this card — however that’s typical for a secured card. When coupled with responsible credit behavior, this card can help you build credit and work your way to an unsecured card.

How to go from a secured card to unsecured card: Citi will hold your security deposit in a Collateral Holding Account for 18 months. Prior to the 18-month term ending, Citi will send you a notification in the mail informing you if you will be transitioned to an unsecured card. If transitioned, you will receive an unsecured card and your deposit back. If not, you will still have your secured card. The status of your account at the end of the 18-month term and whether you get back your deposit depends on your account history and other credit factors.

$100 minimum deposit: Visa Classic Secured by Justice FCU

Visa Classic Secured Card from Justice FCU

Annual fee

$0 For First Year

$0 Ongoing

Minimum Deposit

$100

Regular Purchase APR

16.90%

Variable

APPLY NOW Secured

on Justice Federal’s secure website

You can join Justice FCU if you are an employee, retiree, or family member of the Department of Justice, Department of Homeland Security, United States Courts or another qualifying group. If that doesn’t apply, don’t fret. Anyone can join JFCU by first becoming a member of an eligible JFCU association like the National Sheriff’s Association, charges a $41 membership fee for auxiliary or student members. It only costs $5 for eligible individuals to join JFCU, so that would raise the total cost of membership to $46. Credit limits range from $100 to 110% of pledged shares.

How to go from a secured card to unsecured card: Justice FCU doesn’t provide automatic reviews of your account or a simple way to transition to an unsecured card — you need to initiate the upgrade to an unsecured card. To do this, apply for one of their unsecured credit cards. Then, upon approval, your secured card will automatically be cancelled and you will receive your security deposit back. Note that your approval for an unsecured card depends on your creditworthiness.

Best Strategy for Rebuilding Credit

The strategy for building a strong credit score with a secured card is simple. Make one small purchase each month ($10 or less), wait for your statement to come in, pay your bill on time and in full and then repeat the next month. By making just small purchases, you’ll be using a very low amount of your overall credit limit (also called utilization), which helps drive your credit score up faster because it shows you’re responsible.

Keep an Eye on Your Credit Score and Credit Report

Once you’re in the process of building or rebuilding your credit, it helps to have a benchmark. The easiest way will be to establish a profile with one of the free credit score websites: Credit Sesame, Quizzle, Credit Karma. Do a monthly check in with your credit score to see how it’s improving.

In addition, you should also keep tabs on your credit report by downloading the report from each of the three bureaus. By law, you’re entitled to one free report from each bureau per year. You can download them all at once or space them out throughout the year. Go to annualcreditreport.com to download your free reports. Monitoring your reports will ensure all the information there is accurate and alert you about anything that may be damaging to your score, like an item in collections or reported missed payments.

A Word to the Wise

Never carry a balance on your secured card. The point of a secured card is to be building (or rebuilding) your credit history. Make one small purchase a month and pay it off on time and in full. Follow those two steps and you’ll see your credit score start to raise quickly.

Find other secured card options on our secured card comparison table.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

MagnifyMoney
MagnifyMoney |

Have a question to ask or a story to share? Contact the MagnifyMoney team at info@magnifymoney.com

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