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EDITOR’S NOTE: All the credit card offers mentioned in this article are expired and are no longer available
Centennial® Classic Credit Card snapshot
A low credit score can make your financial life harder in some ways, particularly if it prevents you from qualifying for loans or snagging optimal interest rates on what you borrow. Used responsibly, a secured credit card can be a tool for putting your credit back on course.
As far as the best credit cards for bad credit go, you’ve got a few options available for people who hope to raise their credit score or establish credit for the first time.
If you fit into either category of looking to raise your credit score or establish your credit, keep reading to learn more about First Premier Bank’s Centennial® Classic Credit Card as well as other secured credit card options.
|Centennial® Classic Credit Card highlights|
|Annual fee||$75 the first year; after that, $45|
|Monthly service fee||$0 introductory fee the first year; after that, $6.50 per month ($78 annually)|
|Credit line increase fee||25% of the amount of the increase|
|Minimum initial deposit||$150 minimum deposit, which translates to a $300 credit limit|
|We think it's great for:||Someone who needs to rebuild or establish credit|
|Someone who can't qualify for any other card|
|We think these folks should do more research:||Someone who desires a higher credit limit|
|Someone who wants a secured card with rewards|
|Someone who carries a balance|
The basics: How this card works
The Centennial® Classic Credit Card is a secured credit card and if you don’t know what that means, a secured credit card, it’s pretty simple. When you open a secured credit card account, you have to give the card issuer a cash deposit which they hold as collateral. You still have to pay your bill every month, just as you would for a traditional credit card. The deposit is held in case you default. With this card, a $150 deposit will get you a $300 credit limit.
As you make purchases, that reduces your available credit and you’ll need to make a payment to increase it again. The Centennial® Classic Credit Card has a $75 annual fee the first year, which is deducted from your credit line upon account opening. After the first year, the annual fee is $45. This card also has a monthly service fee of $6.50, (annually $78), which kicks in after the first year.
First Premier Bank reports your account activity to the credit reporting bureaus, so as long as you’re making your payments on time and keeping the balance low on this account and any other credit or loan accounts that you have, you should see your score gradually rise over time as you use the card.
Centennial® Classic Credit Card vs. other secured card options
When you’re trying to pin down the best secured credit cards, it’s worth your while to cast a wide net to see what’s available. We’ve selected a few other secured cards that compete with the Centennial® Classic Credit Card.
Navy Federal nRewards® Secured Credit Card
Card features we want to mention:
- Minimum $500 security deposit
- Earn 1 rewards point per net $1 spent on net purchases
- Low variable APR range for purchases and balance transfers
- No annual fee
The Navy Federal nRewards® Secured Credit Card is a standout choice for building credit among the armed forces, the DoD, veterans and their families. You have to be a member of the Navy Federal Credit Union to apply and there’s a $500 minimum deposit required and if you’re approved for this card, this card can pay off in more ways than one.
With responsible use by you, you can use it to establish or rebuild credit and you can earn rewards on what you spend. You’ll get one point per dollar on net purchases made with the card, which can be redeemed for gift cards, merchandise and cash back starting at 1,000 points.
The nRewards® Secured Credit Card has a variable annual percentage rate (APR) of 10.74% – 18.0% for purchases and balance transfers, rates are based on creditworthiness and will vary with the market based on the Prime Rate. There’s no annual fee.
U.S. Bank Secured Visa® Card
Card features we want to mention:
- Initial security deposit deposit ranging from $300 to $5,000
- $29 annual fee
If you’ve got a U.S. Bank checking or savings account, you might think about getting a U.S. Bank Secured Visa® Card to meet your credit-building needs. This card doesn’t come with any rewards but if your application is approved it offers generous credit lines ranging from $300 to $5,000, your credit limit is equal to the amount of your security deposit.
The $29 annual fee cost is low compared to the Centennial® Classic Credit Card. Other card features of the U.S. Bank Secured Visa® Card include auto rental insurance, zero fraud liability and fraud protection.
DCU (Digital Federal Credit Union) Visa® Platinum Secured Credit Card
Editor’s Note: The DCU (Digital Federal Credit Union) Visa® Platinum Secured Credit Card offer mentioned in this article has expired and is no longer available
Card features we want to mention:
- 12.75% variable annual percentage rate (APR) for purchases, balance transfers and cash advances
- No balance transfer or cash advance fees
- No annual fee
The Digital Federal Credit Union offers an outstanding Visa® Platinum Secured credit card. You won’t earn any rewards with this card but you do have the advantage of paying no annual fee and a 12.75% variable annual percentage rate (APR) for purchases, balance transfers and cash advances.
Compared to the rates other secured cards typically charge, this card could save you money on purchases you repay over time.
To be eligible for this card, you need to be a member of DFCU. You are eligible if you meet one of the requirements on this page (click the “Who may join” tab). If you don’t meet one of those requirements, you can join a member organization and the membership cost varies based on the organization. The various organizations are dedicated to noble causes, like funding schools and protecting the natural environment. Whichever organization you choose, it’s a nice path to DCFU membership.
Does the Centennial® Classic Credit Card offer rewards?
The Centennial® Classic Credit Card doesn’t have a rewards program, which means you won’t earn any points, miles or cash back when you make purchases. That’s fairly standard with most secured credit cards but as the Navy Federal nRewards® Secured Credit Card demonstrates, there are secured cards that you can use to put money back in your pocket.
The pros: What we like about this card
This card reports to the credit bureaus so with responsible use by you it can help you if your number one goal is establishing a credit history or repairing a bad one. The application process is easy and you can apply for an account online in just a few minutes.
You can use the card anywhere Mastercard® is accepted which is convenient if you travel.
The cons: Why another card may be better
First Premier has a reputation for issuing credit cards with very unfriendly terms. First, the purchase APR is quite high. Currently, the annual percentage rate (APR) for purchases is set at 36%. That same rate applies to cash advances (which are also subject to a fee of either $6.00 or 5% of the amount of each Cash Advance, whichever is greater) so if you’re pulling cash off the card or you don’t pay your purchases off in full, you’re going to pay a heck of a lot in interest.
The biggest down side on this card is its fee schedule. The $75 annual fee is high compared to other secured credit cards. Other secured cards are available for one-half, one-third or even less in terms of an annual fee. And right off the bat your initial credit line shrinks to $225 until you pay the fee. Not only do you have less spending power but you’ve clocked in a 25% utilization ratio without even making a purchase. The annual fee does drop to $45 after the first year but also after the first year there is a $6.50 per month maintenance fee just to have the card. If you keep your account open after the first 12 months, it’ll cost you $123 a year between the annual fee and the monthly fee.
You’ll contend with a late payment fee of up to $38 and a returned payment fee of up to $35 if there’s ever an issue with your payment.
An interesting (not good) thing about the Centennial® Classic Credit Card
Does your credit card charge a fee to raise the credit limit? You should know that this one does.
A real kicker on this card is the credit limit increase fee. Your account will be periodically reviewed for a credit limit increase, whether you ask for that or not. If First Premier determines that you are eligible for an increase, you’ll automatically get it and you’ll be charged a fee equal to 25% of the increase. In other words, if First Premier decides to increase your limit by $100, you’ll see a $25 charge on your bill. In the fine print you’ll find a refund clause that covers the automatic credit limit increase fee: if you decline the automatic increase within 30 days after the date of the billing statement on which the fee is billed that will result in a reversal of the credit limit increase and a refund of the credit limit increase fee. If you ever want an increase, though, prepare to pony up. This credit limit increase fee is highly unusual.
Should you get the Centennial® Classic Credit Card?
First Premier Bank has been the subject of Consumer Financial Protection Bureau scrutiny more than once on the subject of fees. On this card and others, First Premier charges the absolute most that it can under federal law. It’s legal, but not very nice. For example, federal law prohibits card issuers from charging fees that amount to more than 25% of the credit limit in the first year. In this case, $75 is the max, and that’s what you’ll pay. The law allows for greater charges in subsequent years, and First Premier accordingly slaps more onto your tab.
If you can’t qualify for another secured card with friendlier terms, and you’re considering opening a Centennial® Classic Credit Card, use it responsibly for six months. Then consider finding another card. There are plenty of secured cards that feature fewer fees and a lower APR, which means more savings for you in the long run and you still get the benefit of being able to work on your credit score.
Independent Review Disclosure: All the information about the Centennial® Classic Credit Card, Navy Federal nRewards® Secured Credit Card, and DCU (Digital Federal Credit Union) Visa® Platinum Secured Credit Card has been collected independently by CreditSesame.com and has not been reviewed or provided by the issuers of these cards. The Centennial® Classic Credit Card, Navy Federal nRewards® Secured Credit Card, and DCU (Digital Federal Credit Union) Visa® Platinum Secured Credit Card credit cards are not available through CreditSesame.com.
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