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OpenSky® Secured Visa® Credit Card snapshot
When you’re trying to establish credit for the first time or rebuild your score after a bankruptcy, foreclosure, or other rough financial spot, a secured credit card, when used responsibly by you can be a lifesaver. The OpenSky® Secured Visa® Credit Card is one you may want to consider, whether you’re starting out or you’re starting over. You can apply for the card without a credit check and it takes just a few minutes to apply for an account. If you need a secured card to get your credit on track, take a close look at our review of the OpenSky® Secured Visa® Credit Card and compare this card with others you are considering and you may find one that fits your needs.
OpenSky® Secured Visa® Credit Card highlights
|OpenSky® Secured Visa® Credit Card At a Glance|
|Initial Deposit:||as low as $200 and up to $3,000|
|We Think it's Great For:||Someone who's building credit for the first time
Someone who's interested in repairing bad credit
|We Think These Folks Should Do More Research:||Someone who wants to earn rewards on their spending
Someone who wants to be able to transfer a balance
Someone who carries a balance from month to month
|Additional Note:||Terms and conditions apply|
How does a secured card work?
If you’ve never had a secured credit card before you might not understand how they work. Here’s a quick rundown. To open a secured credit card account, you have to make a cash deposit to the card issuer. The amount of your deposit is usually, but not always, the amount of your credit limit. However, your monthly payments don’t come out of your deposit – your deposit is held as collateral in case you fail to pay your payment due. With a secured card you still have to pay off your charges each month, in short, you need to pay at least your minimum payment due on time each month. Anytime you make a transaction such as a purchase or cash advance, your available credit is reduced by that amount. After your payment is credited to your account, your available credit goes back up.
Later on when you upgrade to a traditional credit card or close the account for any other reason, your deposit will be returned to you in full, assuming you’ve paid your balance in full and met all your financial obligations on the secured card.
OpenSky® Secured Visa® Credit Card basics
The OpenSky® Secured Visa® Credit Card allows you to make your security deposit from as low as $200 and up to $3,000, so you have some flexibility when it comes to determine how much credit you will have with the Card.
The OpenSky® Secured Visa® Credit Card reports to all three major credit bureaus, so your account history will factor into your credit score. Not all secured cards report to all three bureaus. This is an important detail to ask about, since documenting how you are handling your account and building a credit history depends on the card issuer reporting your account details to all three major credit bureaus.
The Annual Percentage Rate (APR) for purchases is a variable rate of 19.64%. This card does not charge a fee to apply but it does come with a $35 annual fee.
OpenSky® Secured Visa® Credit Card does not offer unsecured credit card accounts, so you’ll have to keep an eye on your credit and consider applying for a traditional card from another issuer after six to twelve months after you have demonstrated consistent responsible management of all your credit obligations.
OpenSky® Secured Visa® Credit Card vs. other secured options
It’s always a good idea to shop around. We’ve chosen three other options we think are worth a look for anyone who’s considering a secured card to improve their credit.
First Progress Platinum Prestige Mastercard® Secured Credit Card
Card highlights we want to feature:
- No credit history or minimum credit score required for approval
- Your credit line is secured by your fully-refundable deposit of $200 – $2,000 submitted with your application
- 10.74% variable Annual Percentage Rate (APR) for purchases, this APR will vary based on the Prime Rate
- $49 annual fee
- Reports monthly to all three major credit bureaus
The First Progress Platinum Prestige Mastercard® Secured Credit Card is issued by Synovus Bank. Your credit line is secured by your fully-refundable deposit of $200 – $2,000 submitted with your application. Your security deposit is always 100% refundable providing you have met all your financial obligations that are due on the card.
The annual fee is a few bucks higher then the OpenSky® Secured Visa® Credit Card but the purchase APR is quite a bit lower. That could make this card more valuable than the OpenSky® Secured Visa® Credit Card if you aren’t able to pay off in full what you charge each month. Your balances and payment activity will be reported to the credit bureaus monthly and will show up on your credit reports.
This card will not convert to a traditional credit card, so after six to twelve months after you have demonstrated consistent responsible management of all your credit obligations, consider looking for a traditional card elsewhere.
They have a nationwide program though not yet available in NY, IA, AR, or WI.
Discover it® Secured
Card highlights we want to feature:
- There is no annual fee
- Discover will begin automatic reviews starting at 8 months to see if they can transition you to an unsecured line of credit and return your deposit
- 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases.
- There is an introductory offer: Discover automatically matches all the cash back you’ve earned at the end of your first year, for new cardmembers only
If you want to earn cash back on purchases, look at the Discover it® Secured card. This is a secured credit card with no annual fee, which immediately saves you $35 over the cost of the OpenSky® Secured Visa® Credit Card. The catch is a higher interest rate, the standard variable Annual Percentage Rate (APR) for purchases for the Discover it® Secured card is 24.99% so you want to pay off your entire balance each billing cycle and have the payments credited to your account before or by the due date to avoid paying interest charges on your purchases.
This card offers something that most secured credit cards don’t – cash rewards – 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases. There is an introductory offer, Discover automatically matches all the cash back you’ve earned at the end of your first year, for new cardmembers only. If you plan to use the card regularly for everyday purchases and you’re able to pay the balance off in full each month, with the cash back rewards you earn on this card, that could potentially result in saving you money on your purchases.
With the Discover it® Secured card establish your credit line by providing a refundable security deposit of at least $200 after being approved. Be prepared, you will need to provide your bank information when submitting your security deposit. Discover has automatic reviews starting at 8 months to see if they can transition you to an unsecured line of credit and return your deposit.
U.S. Bank Secured Visa® Card
Card highlights we want to feature:
- Open your account with your security deposit of $300 to $5,000, in hundred dollar increments only
- Variable Annual Percentage Rate (APR) of 20.99% for purchases and balance transfers, balance transfer fee of either 3% of the amount of each transfer or $5 minimum, whichever is greater.
- $29 annual fee
- Automatic bill pay – an easy way to pay bills online
The U.S. Bank Secured Visa® Card offers one of the highest credit lines of any secured card, with your initial deposit of up to $5,000.
A word about utilization ratio
A higher credit line can work in your favor where your credit score is concerned because it affects your credit utilization ratio. Your utilization ratio is how much debt you have compared to your total credit limit. If you have a high credit line but you use only a small percentage of it, that helps your credit score. Your credit score is inversely proportional to your utilization. In other words, the more of your available credit that you use, the lower your score will be (all else equal).
Here’s an example. Let’s say you charged $250. If your secured card has a $500 limit, your utilization is 50%. People with top credit scores tend to use no more than about 7% of their credit limit. Let’s say instead that you have a $5,000 limit on your secured card. Now you’re only using 5% of your credit. The higher credit limit on the very same card can put you elbow-to-elbow with people who have credit scores of 800 or higher.
Credit Sesame data shows members are using too much of their available credit
If you’re dealing with a high utilization, don’t worry, you’re not alone. According to data gathered from a subset of Credit Sesame’s 8 million members, we discovered that more than half are using 70% or more of their available credit. (Your utilization is directly tied to a credit letter grade, which is why the lower the utilization rate, the higher your letter grade, as it shows in the pie chart below.)
*Data from the pie chart gathered from a subset of Credit Sesame’s 8 million members August 2015.
The purchase APR is a little higher on the U.S. Bank Secured Visa® Card than it is on the OpenSky® Secured Visa® Credit Card, but the annual fee is lower. Again, the purchase APR is a moot point if you pay your purchase balance in full every month. Most credit card issuers will not charge you any interest on your purchases if you pay your entire balance by the due date each month (payment must be credited to your account by the due date). Be sure to read the terms and conditions for any card you are considering applying for to see how interest is charged.
Does OpenSky® Secured Visa® Credit Card offer rewards?
The OpenSky® Secured Visa® Credit Card doesn’t have a rewards program. That means you won’t earn any cash back, points or miles when you make purchases with the card.
OpenSky® Secured Visa® Credit Card pros
So what do we think are the OpenSky® Secured Visa® Credit Card’s strong points?
The application process is fairly straightforward, you can sign up online and there is no credit check necessary to apply.
You can open the account with as low as $200, however if you provide a security deposit of $3,000 you can get the maximum credit limit, which isn’t as high as some of the other cards listed here but it’s still pretty high.
This card can be used anywhere Visa® is accepted.
OpenSky® Secured Visa® Credit Card cons
No credit card is 100% perfect and the OpenSky® Secured Visa® Credit Card falls short on a couple of different counts.
The regular purchase APR means this card doesn’t come cheap if you carry a balance. If you just pay the minimum payment due each month, you’ll still build a credit history but at a premium, meaning you will be paying finance charges on any of your balances that you carry.
The lack of a rewards program is also something some card members may find discouraging. After all, who doesn’t want to put a little money back in their pockets while they spend?
Should you get the OpenSky® Secured Visa® Credit Card?
If your number one goal is growing your credit score and you’re not as concerned with lots of bells and whistles, the OpenSky® Secured Visa® Credit Card may be worth a closer look from you. As long as you pay your bills on time (at least the minimum balance due) and keep your balance low in relation to your credit limit, this card can be used as a tool to help put you on the path to a better credit score. Remember it’s ultimately up to you to handle your credit responsibly.
To get a feel for your starting point, take a look at your free credit report card from Credit Sesame.
Independent Review Disclaimer: All the information about the U.S. Bank Secured Visa® Card credit card has been collected independently by CreditSesame.com and has not been reviewed or provided by the issuer of this card. The U.S. Bank Secured Visa® Card credit card is not available through CreditSesame.com.
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