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Credit Cards

Review: PenFed Launches 1.5% – 2% Power Cash Rewards Credit Card

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

The information related to Citi® Double Cash Card – 18 month BT offer has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.

PenFed, a credit union that anyone can join (more on that later) has just introduced a new cash back rewards credit card, PenFed Power Cash Rewards Visa Signature® Card. The card pays a high, flat cash back rate and brings a credit union approach to fees (low and not many of them) and simplicity. Here are the details on the cash back that you can earn:

  • Anyone with military service earns 2% cash back through their PenFed HonorsAdvantage on all spending, with no limits or restrictions. That is the highest flat cash back rate in the market.
  • Anyone with a PenFed Access America Checking account (restrictions apply) earns 2% cash back on all spending, with no limits or restrictions. (If you keep $500 in the checking account, there is no fee and you earn 0.20% APY on the money).
  • If you do not have military service or a checking account, you can earn 1.5% unlimited cash back. At 1.5%, the card matches Capital One® Quicksilver® Cash Rewards Credit Card, but it is still beat by Citi® Double Cash Card – 18 month BT offer.
  • There is a minimum redemption amount of $5 for the cash back that you have earned.
  • There is a bonus offer: get $100 Statement Credit When you spend $1,500 in the first 90 days.

In addition to the cash back, here are some additional features:

  • Chip with pin functionality: if you travel overseas, you might find chip + signature limiting. For example, trying to use a card with only signature functionality at kiosks across Europe (like the London Underground) can be challenging.
  • No annual fee and no foreign transaction fee.
  • APR range of 11.99% - 17.99% Variable. If you have excellent credit, the APR at Citi (on the Citi® Double Cash Card – 18 month BT offer) is 15.74% - 25.74%* (Variable). For people who revolve occasionally, this could be a better option. (Although our advice remains to pay your balance in full and on time. If you need to borrow money, personal loans and balance transfers remain cheaper options).

Our Verdict

Best Cash Back Credit Card for Military: 2% is the gold standard for a flat rate cash back credit card, and PenFed delivers for men and women who have served. This is better than any competing flat-rate cash back credit cards because of the lower APR and lack of foreign transaction fees.

Best Cash Back Credit Card for Spending Abroad: If you use Citi® Double Cash Card – 18 month BT offer, you would be hit with a foreign transaction fee of 3%. So, you would earn 2% but be forced to pay 3% in fees. Before this card, Capital One® Quicksilver® Cash Rewards Credit Card was our top choice because of a 1.5% Cash Back on every purchase, every day and no foreign transaction fees. PenFed’s PenFed Power Cash Rewards Visa Signature® Card now wins because (a) if you put $500 into a PenFed Access American Checking account you can earn 2% on this card, and (b) the card offers chip and pin functionality. If you spend $1,000 overseas this year, you would pay $10 to Citi, (2% cash back – 3% fees = -1%), would earn $15 with Capital One and would earn $20 with PenFed.

Tie: Best Flat-Rate Cash Back Credit Card: With both Citi® Double Cash Card – 18 month BT offer and PenFed you can earn up to 2%. Each card has its own unique differences, which is why they are tied for best flat-rate card in the market.

  • PenFed: You need to join the credit union, open a checking account and fund the account with $500 (or sign up for direct deposit) to ensure you get the full 2% and avoid fees. Financially it will make sense, but there are a number of obstacles to get the full rewards (unless you are military).
  • Citi® Double Cash Card – 18 month BT offer: It is easy to apply and get the card (no credit union membership or Citi checking account required). Earn 2% cash back on purchases 1% when you buy and 1% as you make payments for those purchases.

There are still options to earn higher cash back rates in certain categories. You can find the best cash back credit cards by every category here. For example, with the Fort Knox Federal Credit Union Visa® Platinum Card, you can Earn an unlimited 5% cash back on gas and 1% cash back on all other purchases.

If you want to learn more or apply, you can visit PenFed’s website.

PenFed Power Cash Rewards Visa Signature® Card

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on PenFed Credit Union’s secure website

Requirements To Earn 2%

Here are the details on how to ensure you get the full 2% earn rate:

Military: You are eligible to earn 2% if the primary or joint applicant is in military service, the National Guard, the Reserves, an honorary discharged veteran or retired from the United States military. Military members receive the 2% upon completion of the application – no further action is required.

Checking Account: If you do not meet the military requirements, you would need to open a checking account with PenFed. The account is called the “AccessAmerica Checking Account.” There are some decent benefits to the account (you can earn 0.20% APY interest on balances up to $20,000 and 0.50% APY on balances between $20,000 and $50,000). If you shift your monthly direct deposit of at least $500 to this account, you will not have a monthly fee. However, if you do not want to shift your direct deposit, you can deposit $500 and keep it there to meet the required minimum balance. This is actually the easiest way to earn the 2%, cash back rate and, given the 0.20% interest on the checking account, it can be financially worthwhile.

Join the Credit Union: There are multiple ways to join the credit union. If you are active or retired military, you are eligible to join for free. If you work for the US government or are a relative of a member, you can also join for free. But don’t worry if you are unable to meet those requirements. You might belong to an eligible organization (check here). You can also join an organization to become eligible for credit union membership. You can pay $17.00 (one time and non-refundable) to join Voices for America’s Troops or the National Military Family Association. By supporting a good cause, you become eligible for credit union membership. In addition to the credit card, PenFed is known for low rates on auto loans and mortgages.

Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Nick Clements
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Nick Clements is a writer at MagnifyMoney. You can email Nick at [email protected]

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Building Credit, Credit Cards

How (and why) to Request a Credit Limit Increase With Capital One

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Credit Limit Increase with Capital One

Getting a credit limit increase may be beneficial — as long as you maintain responsible spending habits. Here, we’ll tell you how to increase your limit when on a Capital One credit card.

First, it’s important to understand that each credit card company has different requirements for limit increases. Before sharing the criteria Capital One uses to grant or deny a limit increase request, let’s discuss why you might want a credit limit increase in the first place.

How to increase your credit limit with American Express and Barclays

Why increase your Capital One credit limit?

Capital One offers flexible credit cards for personal or business use that provide several benefits and perks, from bonus rewards and Uber ride discounts to  cashback and 0% intro APR promotions. While the perks of using a Capital One credit card are nice, if you are spending near or close to your limit each month, your credit may be taking a negative hit. It’s important to ensure you’re using credit cards for convenience and to improve your credit, not because you need them in order to get by.

Keeping your utilization below 30% of your credit limit each month is ideal for credit-building. Plus, if you are spending less than 30% of your credit limit, it will be easier to pay off the balance in full in month, allowing you to avoid paying high interest rates. Even if your card currently has a 0% APR for a limited time, it’s best to get into the habit of paying off your balance in full each month, because that promotion won’t last forever.

With that being said, a credit limit increase may help improve your credit score, just as long as you don’t inflate your spending. If you keep your spending at the exact same level after the credit limit increase, your utilization will automatically drop. For example, say you spend $300 a month on a card with a $1,000 limit – a 30% utilization rate. You requested an increase and now have a $2,000 limit, but continue to spend just $300 a month. Without doing anything differently, you’ve lowered your utilization to 15%, which could help improve your credit score.

What to know when considering a Capital One Credit Line increase

Capital One allows users to request a credit line increase either online or by phone. Accounts not eligible for a credit line increase include those that are less than three months old, as well as those that have received a credit line increase or decrease within the past six months.

When you submit a credit line increase request, Capital One looks at a variety of factors, such as on-time payment history, average monthly payment amount and your credit score. A credit score of 700 and above is generally considered good.

They will also look at your current utilization rate. If you are responsibly using your card and paying more than the minimum each month, this tells Capital One that you can handle potential increased monthly payments if they offer you a credit increase.

What’s nice about this process is that it will not negatively affect your credit. When you submit a request to increase your credit limit, Capital One will use the information they normally receive from the credit bureaus each month, so your credit report will not be pulled.

How to request a Credit Limit increase with Capital One

Requesting a credit limit increase is easy, and it only takes a few minutes. First, we’ll walk you through how to do it online, then explain how the phone option works.

Step 1

Once you’ve logged in, click on ‘I Want To…”.

Step 2

Under Offers and Updates, click on Request Credit Line Increase.

 

Step 3

Fill out the short form to the best of your ability, then click Submit Request.

In some cases, Capital One says they can approve credit limit increase requests immediately. If they do not, you will be taken to a confirmation page. As stated on the confirmation page, Capital One will notify you with the outcome of your request in two to three business days if you are signed up for a paperless account, or within 10 business days if you receive paper statements.

If you prefer to request a credit line increase by phone, you can call 1-800-955-7070 and choose the ‘More Options’ prompt to get to the credit line increase request option.

What’s next?

If you’re denied a credit limit increase, Capital One allows you to apply again at any time, but there’s no guarantee your request will be approved. It’s best to work on addressing the reason or reasons why you were declined in the first place.

In addition to making payments on time, and making more than the minimum payment each month, Capital One recommends you keep your income and employment information up to date, as these factors are crucial for determining  if you’re eligible for a credit limit increase. They will also help you to build a strong credit score overall.

If you’re approved, your new credit line will be available immediately. Try to stick to responsible spending habits, and continue using your card wisely.

Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Chonce Maddox
Chonce Maddox |

Chonce Maddox is a writer at MagnifyMoney. You can email Chonce at [email protected]

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Credit Cards

Unsecured Credit Cards for Bad Credit

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Unsecured cards are the most popular type of credit cards available — they are simply regular credit cards. The term “unsecured” means that you don’t need to deposit money or use any other collateral in order to receive a line of credit — credit card issuers extend credit based on your credit history and various other factors.

That’s why, if you have bad credit, it can be difficult to qualify for most good credit card deals. Poor credit is considered at or below a 579 credit score, and it signals to lenders that you’re a high-risk borrower.

Poor credit doesn’t make it impossible to access credit cards, however, but the key is to use credit responsibly so your credit score will improve and you’ll have a chance at qualifying for better deals.

We’ve put together this guide to help you understand the best options for people with bad credit.

Our top picks

Unsecured card: Credit One Bank® Platinum Visa® with Cash Back Rewards

Credit One Bank® Platinum Visa® with Cash Back Rewards

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on Credit One Bank’s secure website

Credit One Bank® Platinum Visa® with Cash Back Rewards

Regular Purchase APR
20.24% - 26.24% Variable
Annual fee
$0-$99
Rewards Rate
1% on eligible purchases, terms apply

Credit One is hardly the best credit card out there, with a host of potential fees that make it expensive to carry. On the plus side, however, it is accessible to those with poor credit. It offers several cards that carry the potential for 1% on eligible purchases, terms apply. People with bad credit will find it hard to qualify for credit cards and harder to qualify for cards with rewards. Therefore, the cashback feature is a good perk of Credit One cards. But remember — not everyone will qualify for a cashback card.

Terms

  • Regular purchase APR: 20.24% - 26.24% Variable
  • Cash advance APR: 26.24% Variable
  • Annual membership fee: $0-$99
    Depending on your account, the annual membership fee will be divided into 12 equal portions and billed monthly or it will be billed yearly for the second and each following year your account is open
  • Authorized user participation fee: $19 annually (if applicable)
  • Cash advance fee: Either $5 or 8% of the amount of each Cash Advance, whichever is greater, or $10 or 3% of each Cash Advance, whichever is greater.
  • Late payment fee: Up to $39
  • Returned payment fee: Up to $39

What to watch out for

The annual fee will hit your account right away — eating into your total available limit. The fine print of the terms and conditions explains:

NOTICE: If your Account has an Annual Membership Fee, it will be billed to your Account when it is opened and will reduce the amount of your initial available credit. For example, if your Account is established with a credit line of $300 and your First year Annual Membership Fee is $75, your initial available credit will be $225.

This is key to realize if you are charged an annual membership fee. You can quickly see your credit limit decrease when opening your account; especially if you are charged the highest annual fee.

Another term to be aware of is the authorized user participation fee at $19 annually. Most personal credit cards do not charge a fee for authorized users so this is an added fee Credit One charges if you decide to add an authorized user.

Secured card: Discover it® Secured

Discover it® Secured

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on Discover Bank’s secure website

Rates & Fees

Read Full Review

Discover it® Secured

Regular APR
25.24% Variable
Annual fee
$0
Rewards Rate
2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.
Minimum Deposit
$200
Credit required
bad-credit
Poor/New

The Discover it® Secured is our top pick for secured cards for numerous reasons — from the automatic monthly account reviews starting at 8 months to the cashback program, this card provides exceptional benefits for cardholders.

Pros:

  • Automatic monthly account reviews: Starting at 8 months, Discover will review your account to see if you qualify for receiving your security deposit back. If you have responsible credit management across all your credit products, you may be graduated to an unsecured card and recieve your security deposit back.
  • Cashback program: This card has a unique feature that’s uncharacteristic of secured cards — a cashback program where you can earn 2% cashback at restaurants or gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cashback on all your other purchases.
  • Free FICO® Credit Score: You receive your free FICO® Credit Score with Discover Credit Scorecard as well as other credit information, like recent inquiries and revolving utilization. This is a great way to track your credit progress and checking your score doesn’t affect hurt your credit.

Cons:

  • High APR: Most secured cards have high APRs, and this one does, too. But, if you pay your balance in full each month, you won’t be charged interest.

Read our review of the Discover it® Secured. 

The risks of unsecured cards for bad credit

The majority of unsecured cards that accept people with bad credit have numerous fees that can have you questioning if the card is really helping you.

Here are several drawbacks you may see with unsecured cards for bad credit:

  • High APRs: Typical cards have APR ranges that max out around 25%, but unsecured cards for bad credit can have APRs near 30%. Also, since you have bad credit, you most often will receive the highest APR listed in the terms and conditions.
  • Annual fee: Many credit cards in general have annual fees, but this can often be outweighed by the added benefits provided. However, unsecured cards for bad credit often lack the added benefits that cards for good credit offer.
  • Program or processing fee: Unsecured cards for bad credit often charge a program or processing fee that serves to open your account and lets you access your credit. This is something you won’t find with unsecured cards from major banks and credit card issuers.
  • Monthly service fee: This fee is characteristic of some unsecured cards and is another cost you have to keep in mind before applying since it can effectively lower your line of credit.

Credit card options when you have bad credit

Store credit cards

Odds are you’ve been asked to apply for a credit card while checking out at a store or online. The card offers often entices you with a rewards program or discount on your current purchase, and gets you thinking if you should apply. The card that you’re being offered is a store credit card and these cards can only be used at the issuing store. Since they are more likely to approve you compared with regular credit cards, they may seem like an easy way to establish credit, but there are some pitfalls to keep in mind.

Pros:

  • Good approval odds: Store cards are more likely to extend you credit than regular credit cards.
  • Rewards and discounts: Store cards often give you rewards for each purchase you make and send you card member discounts. This can be a great way to save money at stores where you frequently shop.

Cons:

  • Limited use: You most likely can only use your card in the issuing store. For example, a Target REDcardTM Credit Card can only be used for Target purchases.
  • High interest rates: Store cards tend to have higher interest rates than regular cards, so make sure you pay your statements in full and on time to avoid interest charges.

Store card options

Walmart Credit Card®

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on Walmart’s secure website

Walmart Credit Card®

Regular Purchase APR
19.15% - 25.15% Variable
Annual fee
$0
Rewards Rate
Save 3% on Walmart.com purchases including Grocery Pickup, 2% on Murphy USA & Walmart gas, and 1% at Walmart & anywhere your card is accepted.

Target REDcard™ Credit Card

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on Target’s secure website

Target REDcard™ Credit Card

Regular Purchase APR
25.15% Variable
Annual fee
$0
Rewards Rate
5% at Target & Target.com

Lowe’s Advantage Card

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on Lowe’s secure website

Lowe’s Advantage Card

Regular Purchase APR
26.99% Variable
Annual fee
$0
Rewards Rate
Get 5% off your eligible purchase or order charged to your Lowe’s Advantage Card.

Home Depot Consumer Credit Card

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on Home Depot’s secure website

Home Depot Consumer Credit Card

Regular Purchase APR
17.99%-26.99% Variable
Annual fee
$0

Secured credit cards

A secured credit card requires you to deposit money upfront, which acts as collateral in case your account defaults. The amount you deposit typically becomes your line of credit. For example, if you put down a $200 security deposit, that means you likely have a $200 credit limit; deposit more and your credit limit will increase. Typical security deposits are $200, but you can be asked to deposit more or less depending on the card.

Pros:

  • Less chance of overspending: Since your credit limit is equal to the amount you deposit, it’s unlikely you will have a high credit limit. This can prevent you from charging large amounts and falling into debt.
  • Great way to build or improve:Secured cards are our favorite way to build or improve credit since you are more likely to be approved for a secured card with bad credit, and you can see your score rise with proper credit behavior and spending as little at $10 a month.

Cons:

  • Security deposit required: You may not have the money available for the required security deposit, therefore possibly ruling out your chances of a secured card.
  • Low credit limit: Your line of credit is equal to your security deposit and most people don’t have the money available to deposit hundreds or thousands of dollars, making your available line of credit lower than unsecured cards.

Secured card options

Capital One® Secured Mastercard®

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on Capital One's website

Capital One® Secured Mastercard®

Regular Purchase APR
26.99% (Variable)
Annual fee
$0
Minimum Deposit
$49, $99, or $200

The Capital One® Secured Mastercard® is a good option for people who may not be able to afford a $200 security deposit since they also offer a $49 or $99 deposit — but take caution that you don’t choose your deposit, Capital One® does. So you may not receive the lower deposit.

Pros:

  • Potentially low security deposit: You may qualify for a $49 or $99 deposit instead of the $200 deposit depending on your creditworthiness. If you qualify for one of the lower deposits, you will still receive a $200 line of credit.
  • Access to a higher credit line: When you make your first 5 monthly payments on time, you receive a higher credit line.
  • Account reviews: Capital One® reviews your account to see if you can be transitioned to an unsecured card and receive your deposit back. However, there is no set time frame for when your account will be reviewed.

Cons:

  • High APR: Similar to other secured cards, this card has a high APR that can be an issue if you carry a balance. A good rule of thumb is to pay each bill in full and on time to avoid interest charges.

Read our review of the Capital One® Secured Mastercard®.

Credit builder loans

A credit builder loan is when a lender (typically a credit union) puts funds into a savings account or CD and a borrower makes monthly payments until the amount is paid off. Typically, the borrower cannot access the funds until the balance is paid in full. Your savings act as collateral for the lender, so if you don’t make payments they know they won’t lose money.

The monthly payments you make include interest fees and often occur over a 12-, 18- or 24-month term. Credit builder loans can be a good way for you to improve your credit score and act as a forced savings since you can’t withdraw funds until you repay the amount you borrowed.

Pros:

  • Report to the credit bureaus: Credit builder loans report to the major credit bureaus, allowing you to rebuild or establish credit history — as long as you follow the terms of your loan and make timely payments.
  • Source of savings: Since the funds are placed in a savings account or CD, you have a forced savings that is accessible at the end of the loan term.

Cons:

  • Funds are locked: You can’t withdraw money borrowed until your loan is paid off. So if you need money upfront, a credit builder loan isn’t a good option.

Options

Self Lender

Credit builder loans at Self Lender offer 12 or 24 month loans where you pay back a loan from $525 to $1,700. Funds are deposited into a CD that’s FDIC-insured and earns interest. However, you cannot access the funds until the loan is paid off. There is a $5 non-refundable administration fee that you pay when you open your account. After that, you pay equal monthly payments for the term of your account (these payments include interest charges). Once you pay off the amount borrowed, you can access your funds plus interest earned.

Republic Bank

At Republic Bank, you can take out a credit builder loan for 12, 18 or 24 months with loan amounts of $500, $1,000 or $1,500. Your funds are placed in a CD that earns interest and is only accessible once the loan is paid. There is a $10 processing fee when you open your account. When you complete your monthly payments (which include interest), you can either withdraw your funds or leave them in a CD.

Unsecured credit card options for bad credit

An unsecured credit card is simply a regular credit card. Unlike secured cards, there is no minimum security deposit required to access a line of credit. These cards often provide higher credit limits than secured cards and can help you build credit when used responsibly.

Pros:

  • You won’t need to make a deposit to access your line of credit.
  • Unsecured cards typically have higher credit limits than secured cards. And, the two cards mentioned below both have credit limits starting at $300.

Cons:

  • Many secured cards for bad credit come with annual fees, so you’ll have to make sure the fee is worth it. If the unsecured card has an annual fee but no rewards, look for alternatives.

Capital One® QuicksilverOne® Cash Rewards Credit Card

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on Capital One’s website

Capital One® QuicksilverOne® Cash Rewards Credit Card

Annual fee
$39
Rewards Rate
1.5% Cash Back on every purchase, every day
Regular Purchase APR
26.96% (Variable)
Credit required
bad-credit
Average/Fair/Limited

The Capital One® QuicksilverOne® Cash Rewards Credit Card is a good unsecured card for those looking to earn cash back while building credit — just watch out for the $39 annual fee.

Pros:

  • You can earn 1.5% cash back on every purchase, every day. This is a decent rate considering this is a card for those with average/fair/limited credit.
  • When you make your first five monthly payments on time, you receive a higher credit line.

Cons:

  • This card comes with a $39 annual fee. Annual fees are common for cards aimed at people with poor credit, but you can find cards without annual fees like the Capital One® Platinum Credit Card mentioned below. With this card, if you spend $2,600 a year, you’ll earn enough cash back to recoup the fee.
  • This card comes with a high APR that can be an issue if you carry a balance. Try to always pay on time and in full so you don’t incur interest charges.

Capital One® Platinum Credit Card

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on Capital One’s website

Capital One® Platinum Credit Card

Annual fee
$0
Rewards Rate
Non-rewards Card
Regular Purchase APR
26.96% (Variable)
Credit required
bad-credit
Average/Fair/Limited

The Capital One® Platinum Credit Card is a decent option if you want a no-frills, unsecured credit card that can allow you to build credit without the distraction of rewards.

Pros:

  • When you make your first five monthly payments on time, you receive a higher credit line.
  • This card is no-frills, but that may be the best option for you if you think you may be tempted to overspend with a rewards card. You can use this card to build credit and work toward a higher credit score.

Cons:

  • Similar to most cards for less-than-stellar credit, there is a high APR. However, if you pay your balance on time and in full each month, this won’t be an issue.

Total VISA® Credit Card

Total VISA® Credit Card

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on TOTAL’s secure website

Terms and Conditions

Total VISA® Credit Card

Annual fee
See Terms
Regular Purchase APR
See Terms
Credit required
bad-credit
Bad Credit
The Total VISA® Credit Card is also accessible to those with poor credit, but it comes at a steep price —  a long list of fees. Apply with caution.

Terms

  • Regular purchase APR: See Terms
  • Cash advance APR: See Terms
  • Program fee: If approved, just pay an $89.00 program fee to open your account and access your available credit.
  • Annual Fee: See Terms
  • Monthly servicing fee: None for first year (introductory). After that, $75 annually ($6.25 per month).
  • Additional card fee: $29 annually (if applicable)
  • Cash advance fee: None for first year (introductory). After that, either $5 or 5% of the amount of each cash advance, whichever is greater.
  • Late payment fee: Up to $39
  • Returned payment fee: Up to $39

What to watch out for

The Total VISA® Credit Card has numerous fees that make this card quite expensive to use, and many fees are not typical of mainstream credit cards. The APR is one of the highest on the market (See Terms for APR), and typical credit cards have APRs that max out around 25%.

Similar to Credit One, the annual fee (See Terms) for the Total VISA® Credit Card is deducted from your initial credit line, lowering your available credit until the fee is paid off:

Notice: The Annual Fee will be assessed before you begin using your card and will reduce the amount of credit you initially have available. Based on your initial credit limit of $300.00, your initial available credit will only be $225.00 (only $196.00 if you choose to have an additional card).

There is a monthly servicing fee of $75 annually ($6.25 per month) associated with this card that is quite steep and characteristic of cards for bad credit. Also, if you take out additional cards, you will be charged $29 annually. Considering the program fee, annual fee and monthly service fees, you’re looking at a jaw-dropping amount of fees with this card. In the first year, if you’re only considering the program and annual fee, you would be charged $164 and subsequent years would incur $123 in fees from the annual fee and monthly servicing fees.

On the plus side, one fee it doesn’t have is a credit limit increase fee. This is a fee some cards for people with bad credit charge when your credit limit increases, but the Total VISA® Credit Card does not charge this fee. So, going from a credit limit of $400 to $500 will not incur a fee.

Learn more

How to build credit

As someone with bad credit, it’s important to practice responsible credit behavior and follow several rules so you can improve your credit.

  1. Pay your bills on time: When you receive a bill, pay it as soon as possible and always before the due date. By paying on time, you won’t be charged a late payment fee and the lender won’t have to report your bad credit behavior to the credit bureaus. Use autopay features or set calendar alerts so you don’t forget.
  2. Pay your statement balance in full every month: Don’t carry a balance on your card because you’ll be charged interest on any overdue amounts and can fall into debt.
  3. Don’t max out your card: If you receive a $500 credit limit, don’t spend the full amount each month because that shows lenders you’re a risky client and negatively impacts your credit score. The amount of your available credit you use is known as utilization and the goal is to have a 20% or lower utilization rate — so spend $100 on a card with a $500 credit limit.

Advertiser Disclosure: The products that appear on this site may be 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 financial institutions or all products offered available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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