Credit Card Customer Service Is Critical to Attracting Customers Says New Study

by Cory Santos
credit-card-customer-service-is-critical-to-attracting-customers-says-new-study

Last updated on February 20th, 2024

Credit cards are an essential part of everyday life for millions of Americans. With credit cards comes the need for customer service, due to fraud, mistakes, and other issues. A new study highlights just how vital credit card customer service is – and how it can actually entice consumers to change their card preferences.

Credit Cards and Customer Service

According to research from the payment industry website, PYMNTS, better customer service may be the key to luring new customers from their current credit card to a new credit card offer. Data shows that approximately 28% of consumers would seriously consider changing cards to a company with excellent customer service.

Millennials are the age group most likely to switch allegiances based on good customer service. The study found that 43% of millennials are “extremely likely” to switch to a company with excellent customer service.

The study, Delivering Cardholder Customer Service Report, also indicates that the most pressing issues customers face with customer service include billing and statement questions, fraud, and other serious concerns. In addition, 80.9% of consumers contact representatives via phone, surpassing chat and email significantly. Those who felt their experience was handled poorly were most likely to say they’d consider switching card issuers.

Customer Service and Coronavirus

Due to the coronavirus pandemic, customer service has taken on a new dimension. Keeping customers up-to-date with relevant information is just one facet of retaining cardholders. No sector of the credit card space has struggled more due to COVID-19 than airline rewards customers.

Due to a severe decline in air travel, many airlines are struggling to retain cardholders. As a result, some, like United, are changing the ways users can spend miles. This includes helping them offset the high annual fees that come with membership for their cards. 

Discover Is an Example of Customer Service Excellence

When discussing customer service, the first name that often pops up is Discover. Discover is known for its exceptional customer service, offering U.S.-based representatives and fast, courteous service. The quality of their customer care continuously gains praise. The company also frequently ranks highest in customer satisfaction by J.D. Power & Associates.

Maintaining Customer Satisfaction Is Critical

Regardless of the means, it’s certain that customer service will play a critical role in how companies attract new consumers well into the future. From coronavirus relief to unique distractions to special rewards, keeping the customer happy takes a lot of effort. But it’s effort that pays long-term dividends.

Here Is What Happens If You Don’t Pay Your Credit Card Bill

by Cory Santos
what-happens-if-you-dont-pay-your-credit-card-bill

Last updated on January 29th, 2024

Credit card payments can be stressful – especially during the coronavirus pandemic. Sometimes people forget when their bill is due and miss payments. Typically, this isn’t an issue if they make their payment promptly. But what happens if you decide to stop paying your credit card bill for good? Here’s what you can expect if you don’t pay your credit card bill.

Penalties and Fines

Late Fees

The first thing you can expect if you forget to pay your credit card bill is a variety of late fees and interest charges.

Many credit card companies offer a grace period for customers. This period lets cardholders pay their bill later than expected without additional penalties. The grace period varies by the issuer but is typically around 15 days.

Failure to pay on time will result in late fees. As of January 2020, card companies can charge about $29 for the first late payment and up to $40 for any late payments within six months. Fortunately, this late fee cannot exceed the statement balance, so smaller missed payments will get a smaller charge.

Penalty APR and Interest

Failure to pay your credit card bill will also result in your bank applying a penalty APR. Penalty APR is a way to reprimand cardholders who habitually make late payments. This rate applies for a period of between six-to-twelve months and is around 29.99% on average. Paying at least the minimum balance for six months can potentially reduce this penalty rate.

Of course, as the months pass, the interest on your bill will keep growing. Because of this continual interest accrual, even small statement balances can eventually result in thousands of dollars in debt if left unchecked.

Your Credit Score Plummets

According to FICO, your credit score relies heavily on paying your bills on time. Timely payments make up 35% of FICOs credit score formula, and payments 30 days late or more can stay on your credit report for seven years. This double whammy means skipping out on paying your bill can come back to bite you for years to come.

Difficulty with Future Finances

The lower your score drops, the less likely you’ll be to get new credit. It isn’t just banks that check credit scores and credit reports. Landlords check credit reports to see how likely a tenant is to miss paying rent. Approximately 70% of employers also run credit checks to see how responsible potential hires are with their finances. Skipping your credit card bills can make it tough to find a job – or a home – in the future.

Debt Collections

If you don’t pay your credit card bill for a long enough time, expect debt collectors to start calling. Credit card companies are willing to negotiate debts with customers – to a point. After several months, however, they may sell your account to a debt collector. Once this sale takes place, the card issuer will no longer discuss your debt.

Debt collectors might be willing to negotiate your bill, but this isn’t a guarantee. The collection agency may call you at home, at work, or on your personal cell phone. They might even get the IRS involved, who may garnish your wages to secure payment. Like late payments, debt collections stay on your credit report for seven years. Because of the complexity of issues like unsecured debt collections, always consider legal advice when dealing with unscrupulous creditors.

Summing It Up

Failure to pay your credit card bill can have severe consequences. These possible issues include late fees, penalty interest rates, wage garnishments, debt collections, and a severely damaged credit score. Fortunately, many card issuers provide a grace period for customers who happen to miss their due date. Additionally, contacting your issuer should be your first action if you are late with a payment. They may be able to provide forbearance options to help you get your account current. However, your primary responsibility should be to never miss a payment and to always pay at least the minimum balance due on your statement.

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

Best Cards for Repairing Credit Mercury Mastercard vs. Total Visa

by Cory Santos
best-cards-for-repairing-credit-mercury-mastercard-vs-total-visa

Last updated on August 23rd, 2023

Bad credit is a reality for millions of Americans.  Bad credit is also known as “subprime” because it is below what lenders consider a safe level of risk for themselves when extending new credit lines. Because of this “subprime” distinction, even fair – or average – credit can mean higher interest rates, lower credit limits, and other less-than-desirable terms. While there are plenty of credit builder credit cards on the market, how can you know which is best? Let’s compare two of the best cards for repairing credit: The Mercury Mastercard and the Total Visa.

What Card Has the Best Interest Rates?

Part of repairing your credit is showing financial responsibility. This process includes keeping your credit utilization ratio down – ideally below 10%. Keeping your credit use this low means trying to pay your balance in full every month. Paying your whole statement balance regularly eliminates the worry about interest rates or APR.

That said, some people do carry a balance, and for those individuals, the Mercury Mastercard is the better choice. The card features a variable APR between 25% and 29%. The Total Card, on the other hand, has a higher fixed APR. Paying in-full essentially makes the interest rate irrelevant. Otherwise, however, Mercury offers a better rate.

Related Article: The Best Ways to Fix Your Credit

Fees Comparison

The Mercury Master card features no annual fee, which is an excellent perk. The Total Visa, on the other hand, has a number of fees, including an annual fee. There’s an annual fee of for the first year, plus a one-off setup fee. Fortunately, the annual fee drops in year two. Unfortunately, there is also a monthly maintenance fee, though Total waives this for the first year. Since the Total Visa is a good option for rebuilding credit, the charges are understandable. Lower credit might mean lenders are taking a bigger risk. For those with fair credit, the Mercury is the best bet.

Limitations of the Mercury Card

While the Mercury Card has significant benefits, it also has drawbacks. The biggest of its limitations is the customer service aspect of card membership. Online forums, such as MyFICO, feature critiques of the cardmember experience. Complaints include poor customer service, lack of transparency, and other issues. While each customer’s experience is different – and there are happy customers – it is still something to consider before applying.

Limitations of the Total Visa

The Total Visa also has its imperfections, though these are mainly the fees the card charges. The other significant negative is the purchase APR. This rate, however, is entirely avoidable by paying each statement balance in full every month.

So, Which Is the Best Card for Repairing Credit?

What’s the best card for repairing credit? The Mercury Mastercard and Total Visa are somewhat similar but each offers  something different. For those with a credit in the low to mid-600s, the Mercury is the better option. The card offers a lower APR, no annual fees, and higher credit limits.

For those with slightly better credit, the Total Visa is a quality option to consider. The Total Card offers better acceptance odds for people in the rebuilding stage of credit. The card also reports to the three major credit bureaus regularly. This consistent reporting is key to steadily building credit with responsible use.

Related Article: What Are the Best Unsecured Cards for Rebuilding Credit?

How Bad Credit Can Cause Problems in Everyday Life

by Cory Santos
how-bad-credit-can-cause-problems-in-everyday-life

Last updated on August 24th, 2023

According to statistics from Experian, one of the major credit bureaus, 16% of Americans suffer from a bad credit score. Bad credit causes serious harm financially, making it tough to get a mortgage, car loans, or the best credit cards. People with a low credit score also receive higher interest rates when they can get credit, making it more expensive to borrow. A bad credit score can cause problems in everyday life, too. Here’s how bad credit can impact your daily life (and what to do about it).

Everyday Things a Bad Credit Score Can Cause Problems With

Here are some of the ways in which bad credit can cause problems in your everyday life.

Renting an Apartment

One of the biggest ways a bad credit score can impact your life is by making it tougher to find an apartment to rent. Renting a home or apartment requires a credit check. This process helps a landlord understand how much of a risk a tenant poses before they approve their application. A bad credit score, including a history of late payments, can keep you from securing a new place to live.

Insurance and Bills

Bad credit also makes it more challenging to pay bills and get insurance. A poor credit score can make utility companies warier of accepting you as a customer. As a result, they may require a deposit before turning on the electricity, gas, or water.

In the same way, insurance companies also look at your credit before giving you a quote. Bad credit correlates directly with higher insurance premiums. This fact is most apparent with auto insurance, as insurers believe those with lower credit scores are more likely to submit a claim.

Employment

According to statistics, up to 70% of employers conduct credit checks during the hiring process. Companies conduct these checks to gauge the responsibility levels of potential hires. While bad credit doesn’t mean someone is unreliable, employers may see it as a red flag and choose another candidate instead.

Relationships

A bad credit score can indirectly cause problems in your personal life. The inability to get a mortgage, rent an apartment, or even find a car loan can cause strife in family and personal relationships. If you are constantly getting calls from bill collectors or collection agencies, this can also cause problems at home.

How to Fix a Bad Credit Score

The good thing about having a bad credit score is that you can fix poor credit with hard work and determination. There are several steps you can take to repair your credit, including:

  • Using a credit monitoring service like MyFICO or TransUnion to monitor your score for updates and mistakes.
  • Consolidating or refinancing your existing debts to make monthly payments more manageable.
  • Only using credit cards for small purchases.
  • Paying your credit card balances in full every month.

Using Credit Cards to Repair Your Credit

The last two steps require using credit cards to fix your credit. People with a poor credit score struggle to find credit cards, but there are options available.

Secured credit cards are the easiest option. These cards require a security deposit, making them easy to get. Secured cards are best for building credit: Make a small initial deposit, pay your balance in full each month, and watch your credit score rise.

For more information secured cards, how they work, and their benefits, visit our Secured Credit Cards page and read our helpful guide at the bottom of the page.

If you don’t have the money for a security deposit, there are still unsecured credit cards for bad credit. These cards require no deposit but feature high interest rates, and most have an annual fee. Some of the more popular options include the Indigo Platinum Mastercard, the Milestone Mastercard, Total Visa, and the Mercury Mastercard.

For more information on repairing your credit, visit our Bad Credit page or read our Credit Card Advice in the News & Articles section.

What’s the Best Card for Rebuilding Credit? Mercury Mastercard vs Reflex Mastercard

by Cory Santos
whats the best credit card for rebuilding credit

Last updated on August 23rd, 2023

Millions of Americans suffer from bad credit. A bad credit score, or subprime credit score, ranges from 300 to 669 with FICO’s scoring model. This scale includes fair credit, since that is also subprime, meaning applicants receive higher APRs, lower credit limits, and other less-than-desired terms. However, there are plenty of great credit cards for repairing credit. Two of the more popular options are the Reflex Platinum Mastercard and the Mercury Mastercard. When comparing the Mercury and Reflex, however, what’s the best credit card for rebuilding credit? Here’s how the two cards stack up against each other:

What’s the Best Card for Rebuilding Bad Credit or No Credit?

The Reflex Card has an edge on the Mercury Mastercard for those with no credit history or a very bad credit score. The Mercury Card is designed for those with fair credit, whereas the Reflex Mastercard welcomes those with bad credit or no credit. This versatility makes the Reflex an excellent option for those at the beginning of their credit repair journey. The Mercury, on the other hand, is ideal for those further along on the road to rebuilding their credit score.

Related Article: How Bad Is My Credit Score?

Which Card Has the Lowest Interest Rate?

Both cards feature a variable APR on purchases. Since the Mercury focuses on those with higher credit scores, the interest rates are lower than those of the Reflex. That said, the difference in APR isn’t large, with Reflex cardholders getting a rate of about .75% higher than Mercury Cardholders. Considering the Reflex accepts a wider credit profile of applicants, that’s a fair trade-off.

 What Card Has the Lower Annual Fee?

The Mercury Master card features no annual fee. The Reflex, on the other hand, does. Since the Reflex is for poor-to-average credit scores, the yearly charge is understandable. Lower credit scores mean a higher risk for lenders. For those with average credit, the Mercury is the best bet. For those with poor credit, however, the Reflex’s annual fee is reasonable.

Unique Features

One of the unique features of the Reflex Card is something called “Continental Credit Protection.” This service provides a debt cancellation program, should the cardholder lose their job or develop a disability. The cardholder pays $0.99 for every $100 of the outstanding balance each month. This fee acts as insurance, protecting the cardholder from debt should anything unfortunate happen. This feature is excellent for those new to rebuilding credit or those in gig economy jobs.

The Reflex also offers a chance at a credit line increase with on-time payments. This feature provides cardholders with the motivation to make their payments on time each month and to learn proper financial habits. Both of these skills are vital to rebuilding credit quickly.

The Mercury Card has no standout features, but that’s not what it’s designed for. The card is for repairing credit and does this well.

So, Which Card Is Better?

What’s the best card for rebuilding credit? The Mercury and Reflex Platinum Mastercard’s are similar but offer something unique to different people. For those with an average credit score, the Mercury is the winner. That’s because the card charges no annual fee. Sure, the APR is high, but that shouldn’t be a factor for those repairing credit. After all, paying in full each month means no interest charges to worry about.

For those with credit scores in the 580s or a low 600s credit score, the Reflex is ideal. The Reflex Card has an annual fee but offers a competitive APR, a debt cancellation program, and the opportunity for a higher credit limit.

Ultimately, it is the credit score of the applicant that determines which card is right for them. Confident in your credit? Then consider the Mercury. If, however, you aren’t sure you’ll get accepted for the Mercury Card, the Reflex Mastercard is a quality option to consider.

Related Article: Are There Unsecured Credit Cards for Bad Credit?

What Is a Fair Credit Score?

by Cory Santos
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Last updated on August 24th, 2023

According to data from the major credit bureaus, over a third of Americans have subprime credit, with 17% of those having a fair credit score. But what is a “fair” credit score? And does having average credit mean you can’t get a decent credit card?

Average Credit Scores in FICO and VantageScore

According to Experian, a “fair” credit score is any FICO Score between 580 and 669. The FICO scoring method is the preferred credit score model of most lenders. Approximately 90% of banks use FICO to judge an applicant’s creditworthiness, with the other 10% using VantageScore.

VantageScore is a scoring model created by the three major credit bureaus (Experian, Equifax, and TransUnion). This model defines a “fair” or average credit score as one between 601 and 660.

What Does Fair Credit Mean?

What does having “fair credit” mean? According to lenders, most people with a credit score in the 600s are “subprime” borrowers. Banks view subprime borrowers as a bigger credit risk than people with an excellent score. Because of this larger risk, people with average credit can expect higher interest rates, lower credit limits, and an inability to qualify for the best credit cards.

Average credit scores aren’t all bad news, however. A 600+ credit score means an applicant won’t have to rely on secured credit cards. Instead, they can get unsecured cards that require no deposit. This can free up personal finances for other things, like bills, paying down debt, and additional costs.

Average credit also means individuals might be just a year (or less) away from reaching a good credit score. Displaying financial responsibility can boost credit scores quickly, and fresh-start unsecured cards are a great way to accomplish this goal. By making on-time payments, paying statement balances in full, and avoiding other pitfalls, credit scores can rise by as much as 50 points in a matter of months.

What Are the Best Credit Cards for Average Credit?

There is a wide selection of credit cards for average credit. These include some popular names, like Credit One Bank and their Credit One Bank Platinum Visa.

However, Credit One isn’t the only bank offering credit cards for subprime credit. Several smaller banks also cater to those with fair credit, with cards like the Total Visa, Reflex Platinum Mastercard, and First Access Solid Black Visa being popular options.

Two cards worth highlighting are the Milestone® Gold Mastercard® and the Indigo® Platinum Mastercard®. Both cards offer an unsecured line of credit and are ideal for those with a fair or bad credit. Both cards feature a fixed-rate APR and monthly reports to the major credit bureaus – making them ideal for building credit.

For more information on repairing credit and recommendations on the best credit cards for credit repair, visit our comprehensive guides to bad credit and fair credit on our “credit needed” category pages.

Do Credit Card Perks Also Apply for Authorized Users?

by Cory Santos
do-credit-card-perks-also-apply-for-authorized-users

Last updated on February 20th, 2024

There are a vast number of exceptional travel credit cards on the market today. And many of these provide impressive rewards, perks, and benefits to those with good-to-excellent credit scores. When individuals can’t get the travel credit cards they want, they turn to friends and family, becoming an authorized user on their account. So, do those fancy credit card perks also apply to authorized users?

What Is an Authorized User?

First things, first: what is an authorized user? An authorized user is someone added to a credit card account by the account holder. Authorizing a user gives them access to the line of credit and their own credit card that they can use to make purchases.

One of the benefits of adding an authorized user to a credit card is that the user gains the benefits of the primary account holder’s good credit. If the primary account holder continues to use the card responsibly and make on-time payments, they can build a positive credit history for the authorized user and get rewards cards of their own.

Signup Bonuses

One of the top reasons why people love rewards cards is the impressive signup bonuses they offer. Some of the top-tier travel credit cards, including the Platinum Card from American Express, the Chase Sapphire Reserve, and the Citi Prestige, offer huge introductory bonuses.

While adding an authorized user won’t double the points on offer, authorized user spending does count towards the required amount to earn these bonus rewards. For cards that offer 100,000 miles/points or more, having more than one person working towards that threshold can make them much easier to reach.

Authorized Users, Credit Card Perks, and Elite Status

Like signup bonuses, travel cards often benefit from elite status in loyalty programs. Except for the ultra-premium cards, most cards come with entry or mid-tier levels in these programs, with additional spending necessary to reach further levels – and perks.

Adding an authorized user increases the chances of reaching the tiers, thanks to multiple cardholders spending towards the same goal. Multiple spenders, however, only have one benefactor. Introductory status boosts through spending requirements only count towards the loyalty status of the primary account holder in most cases. This rule means that the authorized user can help the account holder reach the best tiers with their own spending, but they can’t enjoy those benefits themselves.

Statement Credits

Like elite-tier status, authorized users also don’t get to enjoy their own statement credits. Cards like the Platinum Card from Amex offer impressive statement credits, including travel credits, Saks Fifth Avenue credits, and more. These credits are for the entire account – and not each user.

Card Perks and Benefits

Typically, rewards credit cards grant the benefits of the card to all authorized users. This means that everyone on the account enjoys the lounge access, room upgrades, and other luxurious card features.

This extension of benefits to all users on the account sometimes comes with an extra charge. The Platinum Card, for instance, charges $175 per card, while the Sapphire Reserve charges $75 per authorized user. For additional users who plan to make use of these prestigious cards, however, the costs of obtaining the card are well worth it.

Should You Become an Authorized User?

So, should you try and become an authorized user on a friend or family member’s travel card? Conversely, should you consider adding a family member or friend to your own card?

Adding an authorized user requires a great deal of trust. After all, not only does the authorized user’s credit score stand to gain from the account holder, but account owner is dependent on the new user to use the credit card responsibly. If the authorized user misuses the card, they hurt both their credit score and that of the account holder.

If, however, the authorized user intends to use the card correctly, and they plan to make the most of the impressive benefits these cards provide, adding authorized users is a no-brainer that offers exceptional value to all involved. The card issuer enjoys increased spending, the account holder earns big bonuses and higher loyalty tiers, and access to credit card perks they otherwise couldn’t receive for the authorized user – what’s not to like?

What Is Green Dot? Here’s Everything You Need to Know

by Cory Santos
what is green dot

Last updated on October 3rd, 2023

Green Dot is a name that pops up a lot thanks to the unique credit cards they issue. Many people, however, aren’t familiar with the bank and what it offers. So, precisely what is Green Dot Bank?

The Global Leader In Prepaid Debit Cards

In the world of credit and banking, Green Dot might not be the first name that comes to mind. That said, the bank is one of the premier card issuers for people with subprime credit scores. Additionally, the Green Dot Corporation is the largest prepaid debit card company in the world.

The company is one of the pioneers of prepaid debit cards, first getting into that business in the late 1990s. To date, individuals can find Green Dot prepaid cards at major retailers across the United States, plus through the bank’s website. You might notice the company’s money cards at Walmart, Target, CVS, Walgreens, and other stores.

Green Dot Credit Cards

While Green Dot enjoys immense popularity for its prepaid debit cards, the bank is also gaining a reputation for its high-quality credit cards for bad credit scores.

Continuing with the company’s ethos of providing payment solutions to those overlooked by other banks, the company issues credit cards to those identified as “underbanked” or “unbanked.” In other words, this issuer offers credit cards to people without access to bank accounts, as well as individuals without adequate access to credit card products.

Primor Credit Cards

Green Dot credit cards classify as secured credit cards. A secured card requires a deposit, which acts as collateral for the card and as its credit limit. Green Dot secured cards require a minimum deposit of just $200, making them very affordable for those struggling to repair their credit score – or who are entirely new to credit.

Secured cards typically charge an annual fee – and Green Dot cards are no different. These annual charges range from $39 to $49, depending on the card. While an annual fee is never ideal, the yearly rate is significantly lower than many unsecured credit cards for bad credit. Those cards usually have an annual fee considerably higher than anything Green Dot offers. Some of these cards also charge a monthly maintenance fee, further increasing the cost of membership. Those cards also typically have much higher APRs, making them more challenging to live with day-to-day.

The following are the current Green Dot secured card offers:

Green Dot Visa® Secured Credit Card

The Green Dot Visa® Secured Credit Card is a no-nonsense secured card for those new to credit. The card offers a fixed interest rate which compares with other secured card products on the market. This card is an excellent choice for those either new to credit or banking, as a bank account isn’t a requirement. Plus, the issuer reports activity to all the major credit bureaus, letting cardholders quickly build credit with on-time payments.

Green Dot primor® Secured Visa® Gold Card

The Green Dot primor® Secured Visa® Gold Card is at the other end of the spectrum from the Visa Secured. The Gold Card features one of the lowest interest rates on the market today, at 9.99% fixed. In fact, the APR with the Gold Card bests most other credit cards on the market – no matter the issuer of the credit score required!

The Gold Card has a slightly higher annual fee ($49), but for that cardholders enjoy the same low minimum deposit and reporting to the major credit bureaus. Plus, the cash deposit on the Gold Card earns interest, meaning the card offers a return on investment if used correctly.

Green Dot primor® Secured Visa® Classic Card

The  Green Dot primor® Secured Visa® Classic Card is another offering from Green Dot, which is a mid-range secured card. The card offers the perfect middle ground for those who don’t want to pay the extra $10 in fees each year but still want a great rate. The Classic Card features a fixed-rate APR which is extremely competitive for a secured card. The low rate is on-par with many low APR credit cards for people with excellent credit, meaning it offers the ability to carry a balance – without the punishment of costly interest payments each month.

Should You Consider a Green Dot Prepaid Card or Secured Credit Card?

This issuer prides itself on offering quality products to those who lack access to many other traditional banking services. The bank’s ethos of serving those who lack access to banking and credit card progress continues to attract new customers. Secured credit card offers particularly entice thanks to the bank’s exceptional interest rates and low annual fees.

The issuer’s customer service also earns rave reviews. The company has millions of satisfied customers across the United States. This is thanks to its no-nonsense cards that avoid hidden fees and provide value-for-money.

Related Article: What Is the Easiest Credit Card to Get for Bad Credit?

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

by Cory Santos
should-you-pay-a-higher-annual-fee-on-a-secured-card-for-a-lower-apr

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

7 Reasons Why You Should Consider Getting the OpenSky Secured Visa

by Cory Santos
7-reasons-why-you-should-consider-getting-the-opensky-secured-visa

Last updated on July 27th, 2020

There are lots of credit cards on the market for people with bad credit or no credit. One of the more popular options, however, is the OpenSky Secured Visa from Capital Bank. What is it about this card that potentially makes it a better choice than others? Here are seven reasons why you should consider the OpenSky Secured Visa credit card:

No Credit Check

Perhaps the best reason to consider adding the OpenSky Visa credit card to your wallet is that it requires no credit check. Most credit cards – including secured cards – require a credit pull. These credit checks can keep applicants with bad credit from getting approval – even for a secured card.

OpenSky, on the other hand, only requires some necessary information to decide an applicant’s eligibility. This information includes:

  • Full name
  • Current address
  • Contact information, such as email and phone number
  • Social Security Number
  • Financial information, including income and monthly housing payments

No credit check dramatically improves the odds of being approved for the OpenSky Card, making it an ideal option for those who struggle to find an issuer willing to extend a line of credit.

Simple Application Process

The application process with the OpenSky Secured Visa is straightforward and takes just a few minutes. Approval is equally quick, making the entire process as painless as possible.

Set Your Credit Limit

Secured cards allow applicants to set their own credit limits through the security deposit these cards require. With the OpenSky Secured Visa, the minimum deposit is $200, while the maximum deposit is $3,000. This allows applicants to put as much – or as little – money into their deposit as they’d like within the specified range, letting them decide how much credit they’d like to have.

Quickly Repair Your Credit

Secured cards are an excellent way to raise your credit score. With on-time payments and only using the card for smaller purchases, users can put their bad credit days behind them and build a positive credit history. Repairing credit isn’t an overnight process. That said, with continual practice and smart use, the OpenSky Secured Visa can help users boost their credit score significantly in as little as three months.

Increase Your Credit Limit

While security deposits won’t appeal to everyone, the deposit, plus no credit check, make the OpenSky Secured Visa card an excellent option for people with average credit who want to boost their credit score quickly. Thanks to no hard inquiry on their credit report, a person on the cusp of a “good” credit score can open an OpenSky Visa account, make a large deposit, and instantly increase their available credit. This new credit line will also significantly reduce their credit utilization, raising their credit score with no adverse effects.

Free Educational Tools

Part of repairing damaged credit is learning the skills to use credit properly. OpenSky is great in this aspect, as they provide cardholders with free access to their knowledge base.

The OpenSky knowledge base offers a range of articles on building credit. These topics include how to receive a free copy of your credit score, how credit scores are calculated, and tips on boosting credit.

OpenSky also provides a collection of inspirational stories to help boost morale – and confidence – of those with imperfect credit. While this feature may seem like a bit of a gimmick, for those who feel that their credit history will never improve, a confidence boost can go a long way.

Use It Anywhere

Even though it’s a secured card, the OpenSky Secured Visa Card is a genuine Visa credit card. The Visa payment network is the largest in the world, currently accepted in over 200 countries. This means that wherever your travels take you, your OpenSky Visa will likely be accepted.

Related Content: OpenSky® Secured Visa® Review

opensky® Secured Visa® Credit Card

opensky® Secured Visa® Credit Card
Apply Now Terms & Conditions
Poor-No Credit Required
BestCards refers to a variation of FICO Score 9, which is one of many different types of credit scores. A financial institution may use a different score when deciding whether to approve you for a credit card. Please note that the range shown here is our own estimation and not a guarantee of credit needed to be approved for any given card. Recommended Credit: Poor / No Credit Required
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$35 Annual Fee

opensky® Secured Visa® Credit Card

  • 23.89% (variable) Regular Purchase APR
  • 23.89% (variable) Cash Advance APR

At a Glance

The opensky® Secured Visa® is a secured credit card that offers requires a low minimum deposit and features no credit checks for approval. The card, issued by Capital Bank, provides an easy route to better credit by offering credit limits as low as $200, a moderate fixed-rate APR, and a reasonable $35 annual fee.

  • Best Benefits
  • Rates & Fees
  • Why Should You Apply?
  • Earn up to 10% cash back on everyday purchases
  • No credit check required – 89% approval rate with zero credit risk to apply!
  • Boost your credit score fast—2 out of 3 opensky® cardholders see an average increase of 47 points after 6 months
  • Track your progress with free access to your FICO® score in our mobile app
  • Build your credit history with reporting to all three major credit bureaus: Experian, Equifax, and TransUnion
  • Seamless payments—add your card to Apple Pay, Google Pay, and Samsung Pay
  • Start with just $200—secure your credit line with a refundable deposit
  • Fast and easy application—apply in minutes with our mobile-first experience
  • Flexible payment options—pick a due date that works for you
  • More time to fund—spread your security deposit over 60 days with layaway
  • Join 2 million+ cardholders who have used opensky® to build better credit!
  • Regular Purchase APR: 23.89% (variable)
  • Cash Advance APR: 23.89% (variable)
  • Cash Advance Transaction Fee: Either $6 or 5% of the amount of each cash advance, whichever is greater.
  • Annual Fee: $35
  • Foreign Transaction Fee: 3% of each transaction in U.S. dollars
  • Late Payment Penalty Fee: Up to $41
  • Return Payment Penalty Fee: Up to $25
  • Minimum Deposit Required: $200
  • You're struggling to get accepted for other secured credit cards
  • You don’t have a credit history
  • You have bad credit and want to improve your credit score
  • You have a large deposit and want a quick pick-me-up for their credit score
  • You want access to a useful knowledge base of credit information and resources
opensky® Secured Visa® Credit Card

opensky® Secured Visa® Credit Card

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How to Repair Your Credit from Your Couch

by Cory Santos
how-to-repair-your-credit-from-your-couch

Last updated on February 20th, 2024

Finding yourself in quarantine with nothing to do? Why not consider taking some steps to boost your credit score and improve your finances? Here are four helpful suggestions on how to repair your credit from your couch.

Monitor Your Credit Report

When repairing credit, the first thing a person should do is check their credit report and credit score. Your credit report details your complete credit history, allowing lenders to see how good of a borrower you have proven to be. If they don’t like what they see, your chances of boosting your credit could go up in smoke. Because of the importance of credit reports, you must make sure everything in yours is correct.

There are plenty of free credit score apps, plus quality paid services from leading names such as MyFICO, and TransUnion. While free services provide insight into your credit score, paid plans give you all the information on your credit report. These paid services also allow you to easily spot and dispute inaccuracies in your report, as well as comprehensive fraud monitoring and unlimited access to your credit reports 24/7.

Increase Your Credit Limits

Part of understanding what your credit score is means knowing what factors impact your credit score the most. The FICO Score is the most popular scoring model, favored by over 90% of lenders.

FICO prioritizes five factors when determining a credit score:

  • Payment history
  • Credit utilization
  • Credit history
  • Types of credit
  • New applications

Of these five factors, payment history and credit utilization are the most important, counting for 65% of your credit score. While payment history is relatively self-explanatory, credit utilization is slightly trickier.

Credit utilization refers to the total amount of your available credit you actually use versus your total credit limit. If you have a $1,000 credit limit, for instance, but use just $450 of it, that is a credit utilization rate of 45%. Ideally, you want to keep your credit use below 30% for maintaining credit – and below 10% for building credit.

Reduce Credit Utilization with a Secured Card

Repairing credit is all about getting the figures right. One of the easiest ways to decrease credit utilization is to increase your overall credit limit. One way to do this is to contact your current credit card companies and ask for a credit limit increase. For those with a good payment history and a long relationship, it might be as simple as a brief phone call. For those with imperfect credit, however, a secured credit card offers an excellent alternative.

Secured credit cards work by requiring a cash deposit. This deposit acts as the security for the lending risk and as the credit limit. The higher the deposit, the higher the credit limit. Because these cards require a deposit, they are much easier to get than other types of credit cards, making them great for quickly building credit.

Cards like the OpenSky Secured Visa require no credit check, meaning getting the card can’t hurt your credit score – only help it. Placing a large deposit on the card can quickly increase your available credit, and (with responsible budgeting and spending) reduce your credit utilization – quickly.

Consolidate Existing Debt

One of the biggest issues Americans face when repairing their credit is high-interest payments. Most credit cards feature an APR in the 15% to 25% range – or higher. Because of the burden credit card debt causes, paying off outstanding balances can seem impossible.

One of the easiest ways to reduce debt burdens is through consolidation. There are a variety of debt consolidation groups available, with rates considerably lower than what typically comes from a credit card. Groups like American Debt Enders are great for helping people find solutions for too much debt, for instance.

For those looking for a different approach, products like the Upgrade Card are another option. Upgrade works by extending a line of credit of up to $20,000 through their Visa credit card. The cardholder can then use that credit to pay off existing debts, consolidating them into one payment. Upgrade then converts the new balance into an installment payment plan of up to 60 months. Even better, interest rates with the card start as low as 6.99% – considerably lower than most credit cards on the market today.

Consider a Personal Loan

Like the Upgrade Card, personal loans typically offer lower interest rates than credit cards. These loans are another option for people looking to reduce their monthly payments and free up some of their budget for other things (including paying debt).

Many consolidations or personal loans are easy to apply for from your phone, laptop, or tablet, with decisions made in minutes. They also usually offer quick turnaround times, meaning the money can be in your bank account within the same day – or a few days at most. Some popular personal loan options include OppLoans, Smarter Loans, and Even Financial.

How to Bounce Back from a Subprime Credit Score

by Cory Santos
how-to-bounce-back-from-a-subprime-credit-score

Last updated on September 21st, 2023

Subprime credit is a serious problem for many Americans, keeping them from homeownership and a variety of other life milestones. Many people don’t realize just how prevalent bad credit is in America. Here are some sobering stats about bad credit – and how to bounce back from a subprime credit score.

34.8% of Americans Have Bad Credit

According to Experian, one of the three big credit report bureaus, a whopping 34.8% of American adults have a subprime credit score. A subprime credit score is a score between 300 and 689 on the FICO scoring model, which 90% of lenders prefer to use to judge an applicant’s creditworthiness. This accounts for both “bad” credit scores (300 to 629) and “fair” credit scores (630 to 699).

Another 10% of Americans Have No Credit

Surprisingly, another study shows that 10% of American adults – or 26 million people – have no credit at all. According to the Consumer Financial Protection Bureau (CFPB), these people are known as “credit invisible.”

No credit doesn’t necessarily mean a person has never had credit. No credit score also does not mean no credit history. Rather, a person with no credit history experiences one or more of the following:

  • No credit accounts open during the last seven years
  • Limited credit history, but not enough to create a credit score
  • No credit experience at all

The Dangers of Subprime Credit Scores

Having a subprime credit score can impact many aspects of your day-to-day life. Those with bad credit receive significantly higher interest rates on everything from credit cards to auto loans to mortgages. Throughout a 30-year fixed mortgage, for example, the difference between a bad – and good – credit score can equate to hundreds of thousands of dollars in interest.

Bad credit also impacts things like apartment hunting and even job applications. This is because potential landlords and employers can view your credit report. If they see bad credit and a series of late payments, you might lose that new apartment or dream job.

People in certain socio-economic communities are at greater risk from both subprime credit and credit invisibility. Groups at the greatest risk include Hispanic and African American communities, as well as those in low-income areas.

Subprime Borrowers Don’t Have Much More Debt Than People with Excellent Credit

Despite the dangers that subprime credit presents from a borrowing standpoint, people with bad credit don’t have that much more debt than other Americans with good or excellent credit scores. The average credit card debt amount for a subprime borrower is approximately $6,500. The average credit card debt for a person with good credit is only slightly lower, at roughly $6,200. Subprime borrowers also owe less on installments like mortgages and personal loans, but these may reflect the difficulty in obtaining those loans for people with a poor credit score.

The Good News Is That Subprime Credit Is Reversible

While bad credit is a reality for a considerable percentage of Americans, it can change with patience, persistence, and hard work.

Here are five tips to quickly rebuild your credit score:

Check Your Credit Report

One of the simplest ways to begin improving your credit score is by signing up for a credit monitoring service. Using a monitoring service, like MyFICO or TransUnion, allows you to inspect your report and make sure everything it contains is accurate.

Dispute Negative Remarks and Late Payments

If you see anything incorrect on your report, make sure you dispute it as quickly as possible. Sometimes payments go unreported, leading to accounts ending up in collections. Proving these mistakes were not your fault can boost your credit score fast by removing missed payments and other damaging remarks.

Contact Lenders About Consolidation or Refinancing of Debt

Those struggling with existing debt should also consider applying for a debt consolidation loan to eliminate multiple monthly payments. Alternatively, discussing refinancing options with your existing lenders can be a painless way of reducing your monthly payments – just make sure to be nice!

Get Additional Credit Cards

Adding more credit might seem counter-intuitive, but another credit card can help increase your credit quickly. There are two types of credit cards for people with subprime credit: “fresh start” unsecured cards and secured credit cards.

Secured Cards for Bad Credit

Secured credit cards are an excellent option for those looking to repair their credit score. The reason for this is because they are easier to receive than most unsecured credit cards. A secured card requires a deposit, which acts as the “security” for the account. This security makes lenders more willing to provide credit for those with subprime credit scores – and those with no credit score at all.

Because the security deposit on these cards also acts as the credit line, secured cards make perfect sense for people that want the flexibility to determine their own credit limit. A larger credit limit, for instance, allows you to lower your credit utilization significantly, while also increasing your overall credit limit – both which will increase your credit score. Of course, not everyone can afford a large deposit, so secured cards also make sense for those who plan on making a much smaller deposit – often as low as $200.

Some secured cards, like the First Progress Platinum Prestige Mastercard®, feature an APR under 10%. This interest rate is exceptional for any credit card – at any credit score – so to find it on a credit builder card is impressive.

Related Article: What are the best secured cards of 2020?

Unsecured Credit Cards for Bad Credit

For those who either prefer not to opt with a secured card or who simply cannot afford the deposit requirement, there are also a variety of unsecured credit cards for people with bad credit scores.

One of the benefits of some unsecured cards is the ability to receive a credit limit increase with responsible use. Two cards that offer this perk, the Reflex Mastercard and the First Access Visa Card, feature modest credit limits of $300, which the bank may increase in time.

Other popular options include the Indigo® Platinum Mastercard® and the Milestone® Gold Mastercard®  which offer pre-qualification, saving you the headache of potential rejection.

For those struggling to find a credit card for their damaged credit score, the Group One Platinum Card is a worthwhile option that offers ease of acceptance. This card offers a $750 unsecured line of credit to the Horizon Outlet – an online shopping portal. The shop provides an impressive list of products, meaning the cards provide excellent value.

The beauty of all these cards, however, is that they report to the major credit bureaus every month. This means if you pay your balance and keep your credit utilization low, you can quickly raise your credit score by 10, 20, or even 30 points in as little as six months. That, in turn, can open the door to better credit options, lower interest rates, and reduced debts.

Related Article: 5 Tips to Manage Your Finances After Losing Your Job

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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.