Should You Pay A Higher Annual Fee On a Secured Card for a Lower APR?

Advertiser Disclosure

Last updated on August 24th, 2023

When choosing a secured card, it can be difficult to decide which option to go for. After all, there are plenty of secured credit card offers from issuers big and small. When it comes to issuers that specialize in credit repairs, such as Green Dot or First Progress, however, it becomes apparent that there are different interest rates and annual fees to select from. So, should you consider paying a higher annual fee for a lower APR? Or is it just a waste of money?

Pay In Full to Avoid Interest

When it comes to secured credit cards, building a positive credit history is the name of the game. Since secured cards require a deposit, they are easier to get than unsecured credit cards. Because of this greater accessibility, secured cards are the perfect way to repair a bad credit score.

Building credit requires making on-time payments and keeping your credit utilization low. Credit utilization refers to the amount of available credit a person actually uses and should be below 30% at minimum, and below 10% ideally.  Since credit use and payment history account for 65% of a FICO Score, it only makes sense to use a secured card sparingly to boost a credit score.

Using this scenario, a card with a higher APR won’t be an issue. That’s because paying the balance in full won’t incur interest charges. This, in turn, negates the APR entirely. Cards with which you can employ this strategy include the Green Dot Visa® Secured Credit Card or the First Progress Platinum Select Mastercard® Secured. After all, if you plan on paying in full, it makes sense to get a card with a lower annual fee. In the aforementioned cards’ case, that fee is $39 for both.

Paying a Higher Annual Fee Can Save Hundreds on Interest Payments

In the real world, however, paying the entire statement balance every month just isn’t possible for everyone. For some, paying in full is a luxury. This scenario is especially true for millions of Americans stuck in a cycle of credit card debt – but wanting to break out.

For these individuals, the ability to carry a balance is a necessity, so a secured card that doesn’t bury them under a mountain of interest is a great perk. Fortunately, both Green Dot and First Progress offer products with this goal in mind. Both the Green Dot primor® Secured Visa® Gold Card and the First Progress Platinum Prestige Mastercard® Secured offer an unbeatable APR on purchases, allowing individuals to pay down their balances over time – at a rate almost 10% lower than the national average for secured credit cards. While this great rate comes at a higher annual fee ($49 for both), it’s a price worth paying for those who need an excellent interest rate.

Opt for the Middle Choice for Versatility

But what about those who plan on paying in full and want the flexibility to carry a balance if needed? Both issuers also offer a mid-tier secured card – the Green Dot primor® Secured Visa® Classic Card and First Progress Platinum Select Mastercard® Secured Card – both of which feature a modest APR and the same $39 annual fee as the Platinum Elite and Green Dot Secured Cards, respectively.

Summing It Up

Picking the right secured credit card may seem tricky, but it doesn’t have to be. Take the time to consider your current credit situation, your debt, and your ultimate goal. Using this information, you can formulate a plan which takes into account how likely you will need to carry a balance with your new secured card. From there, you can scout the wide selection of credit card offers to find the one that suits you best. Don’t be afraid to pay a slightly higher annual fee, as it may save you hundreds – or even thousands – of dollars in interest.

Related Article: How to Bounce Back from a Subprime Credit Score

Editorial Disclosure – The opinions expressed on's reviews, articles, and all other content on or relating to the website are solely those of the content’s author(s). These opinions do not reflect those of any card issuer or financial institution, and editorial content on our site has not been reviewed or approved by these entities unless noted otherwise. Further, lists credit card offers that are frequently updated with information believed to be accurate to the best of our team's knowledge. However, please review the information provided directly by the credit card issuer or related financial institution for full details.

About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

Advertiser Disclosure

BestCards is an independent, Florida-based credit card comparison platform. Many of the card offers that appear on this site are from companies from which BestCards receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). BestCards does not include all card companies or all card offers available in the marketplace.