2017 USAA Secured Credit Card Review – WalletHub Editors
This content is not provided or commissioned by any issuer. Opinions expressed here are the author’s alone, not those of an issuer, and have not been reviewed, approved or otherwise endorsed by an issuer.
The Verdict: USAA offers a pair of secured credit cards — an Amex and a Visa — that cater the exact same middle-of-the-road terms to the military families who are eligible for membership. That’s right; you need a military affiliation to get either offer. And, unfortunately, that doesn’t get you much.
Both the USAA Secured American Express Credit Card and the USAA Secured Card® Platinum Visa® charge a $35 annual fee, which is moderate as far as secured cards go, considering that some offers are free to use while others cost as much as $125 per year. Both also require a $250 minimum security deposit, the amount of which serves as your spending limit, and allow you to put as much as $5,000 down. But, again, neither amount really stands out, either positively or negatively, relative to other secured cards.
One of this card’s most interesting features is a regular APR that can be as low as 4%, depending on your creditworthiness and active-duty status. But that rate has the potential to be more than five times as high and carrying a balance from month to month with a secured card is ill advised. After all, it basically entails paying interest on your own money, seeing as you must self-fund your credit line.
So with that being said, USAA’s secured credit cards are a fine option for building or rebuilding your credit; they just won’t help you do so at the lowest possible cost. You can learn more about why that’s the case in our breakdown of the offer below.
Can Help You Build Or Rebuild Credit: Like all credit cards, whether secured or unsecured, the USAA Secured Amex and Visa report account information to the major credit bureaus on a monthly basis. As long as this information reflects responsible behavior — particularly on-time payments — your credit standing will gradually improve.
This positive information will either devalue negative marks on your credit report or build on a thin credit file. Depending on your exact starting point, you should be able to graduate to a no-annual-fee unsecured credit card within 12 to 18 months.
Security Deposits Accrue Interest In A CD: One of the downsides to many secured cards is the fact that cardholder deposits do not accrue interest. Rather, they are stuck in a non-interest-bearing deposit account, preventing your funds from even keeping up with inflation while you’re working to improve your credit standing. That, however, is not the case with USAA’s secured cards.
Your deposit will be placed in a certificate of deposit (CD) while your account is open and in good standing, growing at an annualized rate of 0.54%. Now, that obviously isn’t much, but that shouldn’t be a surprise considering the depressed state of CD rates of late. And it’s better than you’ll get from most other secured cards, according to WalletHub’s analysis of more than 50 offers.
The only downside to this deal is that the CD in question has a two-year maturity, which means closing your account and withdrawing your security deposit before then could trigger a penalty fee. Based on the card’s terms and conditions, however, it appears that only interest earnings are subject to the charge. It generally takes 12 to 18 months to improve bad credit to the point that a decent unsecured card is attainable, so this may or may not be an issue in your case.
- $35 Annual Fee: Paying $35 for a better credit score is a bargain in the grand scheme of things but not in the context of currently available secured credit cards. Not only are a few secured cards completely free to use, but the average card’s first-year annual fee is only about $32, according to WalletHub data. That means you’ll be technically overpaying if you wind up getting this card.
- $250 Minimum Deposit: Some secured cards require deposits of as little as $200, giving users an extra $50 (relative to USAA’s offers) that can be used for monthly bill payments and other necessities. That also provides users with added flexibility, especially when you consider that you’ll have the freedom to add to your deposit over time, thereby boosting your spending power.
Other Things To Consider
Choice of Visa or Amex: How do you choose between credit-card offers that are identical save for their card network? Well, consider what card networks ultimately dictate: where a card can be used and what peripheral benefits the holder receives. In this case, Visa has a decided advantage over Amex in terms of usability, as 40 million merchants in 200+ countries take Visa, compared to 19 million in 130 countries for Amex, according to corporate releases and Nilson Report data.
When it comes to network benefits, extended warranties provide the best basis for comparison, with Amex offering a policy far superior to Visa’s, according to a WalletHub Report. Other benefits, such as price protection and travel insurance, differ based on the issuer and thus provide no help choosing in this case. For what it’s worth, though, rental-car insurance is probably the most significant such feature available to cardholders, and USAA’s policy ranks second best overall, according to WalletHub’s report.
- USAA Military Benefits: As an organization with deep military ties, USAA extends certain protections and conveniences to service members, particularly those on active duty, beyond what the Servicemembers Civil Relief Act mandates. This includes a 4% APR on balances (and waiver of some fees) for up to 12 months if changing stations or when deployed, whereas the law stipulates only 6% for the length of the deployment period. And if you receive a campaign medal, USAA will refund all interest that you incurred on your account during the campaign.
- No Foreign-Transaction Fee: If you’re planning some international travel or a big order from a merchant based outside the U.S., the lack of a foreign surcharge is sure to make your wallet happy. And that will be the case whether you have the Visa or Amex. The market-average foreign fee, in case you’re wondering, is currently 1.64%.
- No Penalty APR Or Overlimit Fee: You won’t get slapped with a rate hike after missing a payment or spending in excess of your credit limit (if such a transaction even goes through). That’s certainly nice to know, but you shouldn’t count on this accommodating feature, as it’s best to never need it.
Compared To The Competition
Below, we compared the USAA Secured Credit Card to the market’s most popular secured alternatives in terms of six essential elements that collectively drive secured-card costs. For the purposes of this comparison, we assumed that you would receive the highest interest rate offered by each card, in light of the importance of planning for the worst.
While USAA’s Secured Visa is displayed in the table, given Visa’s network advantage over Amex, the comparison also holds true for the USAA Secured Amex in light of its identical terms.
USAA Secured Cards® American Express®
USAA Secured Card® Platinum Visa®
Navy Federal Credit Union nRewards® Secured Credit Card
Capital One® Secured Mastercard®
Discover it® Secured Card - No Annual Fee
|Rewards Rate||N/A||N/A||1 point / $1||N/A||1 - 4% Cash Back|
|Purchase Intro APR||Not Offered||Not Offered||Not Offered||Not Offered||Not Offered|
|Transfer Intro APR||Not Offered||Not Offered||Not Offered||Not Offered||10.99% for 6 months|
Transfer Fee: 3%
|Regular APR||10.90% - 20.90% (V)||10.90% - 20.90% (V)||9.99% - 18% (V)||24.99% (V)||23.99% (V)|
|Editors’ Rating||2.9 / 5||3.0 / 5||N/A||5.0 / 5||5.0 / 5|
|Details, Rates & Fees||Learn More||Learn More||Learn More|
Rates & Fees
|Learn More||Learn More|
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