Boost Bad Credit with the Bank Americard® Secured Card: Review
When your credit score needs improvement, it's harder to qualify for loans or get low interest rates on what you borrow. If you need to establish, rebuild, or just improve your credit, a secured credit card is one way to you reach that goal.
The BankAmericard® Secured Credit Card is designed to help you build credit for the first time or improve a bad credit score. It works like any other credit card, with one exception - a cash deposit is required to open your account. The upside is your deposit is refundable when you close your card, if you pay your balance off.
Besides being a convenient way to pay, this card comes with some built-in features to help you work your way to better credit. Keep reading our review to learn more about this card's benefits.
Build Credit History
The BankAmericard® Secured Credit Card can be used for purchases, cash advances, and balance transfers. Its main purpose is improving credit.
How Does it Work?
Secured credit cards are a little different from traditional credit cards. You have to pony up a cash deposit to open an account. Your deposit is the bank’s security in case you default.
With the BankAmericard® Secured Credit Card, the minimum deposit is $300. Your income, creditworthiness, and the amount of your deposit determine your credit limit. The maximum credit limit is $4,900.
After 12 months, Bank of America will review your account history. If you’ve been using the card responsibly, you could get your deposit returned to you. Essentially, your card then becomes a traditional, unsecured card.
Using the Card to Build Credit
The BankAmericard® Secured Credit Card isn’t a prepaid debit card. When you open an account, your activity is reported to each of the three major credit bureaus: Equifax, Experian, and TransUnion.
The following tables shows the main component of your FICO credit score, the credit scored used by most major U.S. lenders:
FICO Credit Score Factors and Their Percentages
|FICO credit score factors||Percentage weight on credit score:||What it means:|
|Payment history||35%||Your track record when it comes to making (at least) the minimum payment by the due date.|
|Amounts owed||30%||How much of your borrowing potential is actually being used. Determined by dividing total debt by total credit limits.|
|Length of credit history||15%||The average age of your active credit lines. Longer histories tend to show responsibility with credit.|
|Credit mix||10%||The different types of active credit lines that you handle (e.g., mortgage, credit cards, students loans, etc.)|
|New credit||10%||The new lines of credit that you've requested. New credit applications tend to hurt you score temporarily.|
The best thing you can do to grow your credit score with the BankAmericard® Secured Credit Card is to always pay your bill on time. A single late payment can drag your score down by as much as 100 points.
Keeping the balance low is also crucial. Your credit utilization ratio is a fancy credit term for the amount you owe compared to your total credit limit. Using up more of your available credit works against your score. Keeping your credit usage at 30% or less can help you in the long-term.
Tip: Still confused about how the BankAmericard® Secured Credit Card can help you snag a better score? Take a minute or two to learn how your score is calculated.
Is There a Rewards Program?
Earning cash back, miles, or points can save you money on the things you buy. Unfortunately, the BankAmericard® Secured Credit Card doesn’t have a rewards program. For that, you’d have to look at one of Bank of America’s other card offerings.
Get Smart About Good Credit
Choosing the BankAmericard® Secured Credit Card is the right move if you’re in the dark about how credit works. As a member, you have access to Bank of America’s credit education resources. You can read up on responsible credit card use, how to make a budget, and more.
Besides that, you have free access to your FICO credit score each month. This score is based on the information in your TransUnion credit report. Being able to check your score on a regular basis means you can easily track how you’re doing. You’ll also be able to see which factors are hurting or helping your score.
Tip: Check out MyBankTracker’s uncomplicated guide to hacking your perfect credit score for more credit-boosting strategies.
Credit Score Ranges and Quality
|Credit Score Ranges||Credit Quality||Effect on Ability to Obtain Loans|
|300-559||Very Bad||Extremely difficult to obtain traditional loans and line of credit. Advised to use secured credit cards and loans to help rebuild credit.|
|560-649||Bad||May be able to qualify for some loans and lines of credit, but the interest rates are likely to be high.|
|650-699||Average/Fair||Eligible for many traditional loans, but the interest rates and terms may not be the best.|
|700-749||Good||Valuable benefits come in the form of loans and lines of credit with comprehensive perks and low interest rates.|
|750-850||Excellent||Qualify easily for most loans and lines of credit with low interest rates and favorable terms.|
Other Card Benefits
Your BankAmericard® Secured Credit Card comes packed with features that help make managing your account easier. Here’s what you enjoy as a cardmember:
- ShopSafe protection - Shopping online is convenient but you always have to be on the lookout for identity thieves. ShopSafe lets you create a temporary card number so your account stays secure when you buy things online.
- $0 liability guarantee - If someone steals your credit card information, the last thing you want is to be on the hook for what they charge. Luckily, you’re covered by Bank of America’s $0 liability guarantee if fraudulent purchases show up on your account.
- Digital wallet capability - If you want even more peace of mind when you shop, you can link your card to Apple Pay®, Android Pay™, or Samsung Pay for added security.
- EMV chip technology - Your card is equipped with an EMV chip, which secures your information when you shop in-store.
- Account alerts - The last thing you want is to miss your payment due date. Fortunately, you can set up account alerts to remind you when a payment is due or let you know when your balance reaches a certain threshold.
- Online, mobile, and text banking - Bank of America makes it easy to manage your account from just about anywhere. You can check your balance, pay your bill and more from your laptop or mobile device.
- Overdraft protection - Overdraft fees can eat away at your checking account balance if you’re not careful. If you have a Bank of America checking account, you can use your BankAmericard® Secured Credit Card as a backup method of overdraft protection.
The Fine Print
Before you sign up for any credit card, you should know what the fees and interest rate are. These determine how much the card’s going to cost you on a monthly and annual basis.
How the Fees Add Up
The BankAmericard® Secured Credit Card charges a handful of fees. First, there’s a $39 annual fee. That’s not exactly a deal-breaker but it’s something to keep in mind if you were hoping to build credit with no annual fee.
Balance transfers and cash advances will cost you $10 or 3%, whichever is greater. If you’re using your card as overdraft protection, there’s a $12 fee for that service. The returned payment fee goes up to $27 and the late fee can be as much as $37.
A 3% foreign transaction fee applies when you use your card outside the U.S. If you take a lot of trips abroad, a different card may be the better choice.
Annual Percentage Rate (APR)
This card charges the same variable APR for purchases, balance transfers, and cash advances. There’s a higher APR if you take a cash advance directly from a bank. If you pay late, be prepared for a penalty APR to kick in.
Get a Head Start on Building Your Credit History
If you need to get your credit on track, the BankAmericard® Secured Credit Card can help you do that. It’s not, however, the only credit-building card Bank of America offers. If you’re a student, the card profiled below might be a better fit.
BankAmericard® Credit Card for Students
Establishing credit while you’re still in college is wise if you plan to get a car loan or buy a home down the line. The BankAmericard® Credit Card for Students is suited for students who want to build good credit early on without paying an annual fee.
You don’t need a cash deposit to open an account. That’s a big plus if you haven’t built up a lot of savings yet. If you’re under 21, you will need a co-signer unless you can show that you have enough income to make your minimum payments. A credit check is part of the application process.
One of the best features about this card is the introductory offer for balance transfers. You’ll pay no interest on transfers for the first 18 billing cycles. There’s a 3% balance transfer fee and you have to complete the transfer within 60 days of opening your account to score this deal.
Final Verdict: Should You Get This Card?
The BankAmericard® Secured Credit Card is a solid pick if you want to use a credit card to improve your credit score. We wouldn’t suggest this one if you want to get out of paying an annual fee or earn rewards. If you’re good about paying your bill on time each month and you don’t plan to carry a balance, this card could be a stepping stone towards better credit.