Bank of America offers a secured credit card option for those looking to build or improve their credit score. The Bank of America Unlimited Cash Rewards Secured Credit Card is designed to help individuals establish a strong credit history by providing responsible financial management opportunities. With its simple rewards structure, potential for graduation to an unsecured card, and free access to your FICO score, this card stands out as a popular choice for credit-conscious consumers.
This credit card not only comes with no annual fee, but it also offers cash-back rewards while reporting to the three major credit bureaus, making it a comprehensive choice for reaching credit goals. However, it is essential to consider other secured cards in the market, as some may offer lower deposit amounts or other unique benefits. Bank of America provides an automatic credit review feature to support customers in their credit-building journey, monitoring progress and potentially opening up possibilities for credit line increases or account upgrades.
In this article, we will delve into the specifics of the Bank of America Unlimited Cash Rewards Secured Credit Card, examining its features, benefits, potential drawbacks, and comparing it to other secured cards available in the market. By understanding the details surrounding this offering, individuals can make an informed decision about whether this card is the right fit for their financial needs and credit-building goals.
Bank of America Secured Credit Card Overview
Features and Benefits
The BankAmericard® Secured Credit Card from Bank of America is specifically designed to help establish, strengthen, or rebuild credit. The card offers a straightforward approach to help you enhance your credit score. Here are some key features and benefits you can expect from this secured credit card:
- Security Deposit: The card requires a minimum security deposit of $200 to open the account, with a maximum deposit of $5,000. Your credit line will be equal to your security deposit, helping secure your credit utilization rate.
- No Annual Fee: The BankAmericard® Secured Credit Card does not have an annual fee, making it more affordable for users looking to build their credit score.
- Graduation to Unsecured Card: The bank periodically reviews your account, and based on your responsible credit usage and timely payment history, you may be eligible to graduate to an unsecured credit card and receive your security deposit back.
- Free FICO® Score Access: You can access your FICO® Score for free, which helps keep track of your credit progress.
How the Secured Credit Card Works
A secured credit card functions similarly to a traditional credit card, but there is a fundamental difference: a cash deposit must be paid upfront to guarantee your credit line. Here’s how the BankAmericard® Secured Credit Card works:
- Apply for the card: Submit your application for the BankAmericard® Secured Credit Card with the required personal and financial information.
- Pay the security deposit: Once your application is approved, you need to make a security deposit, ranging from $200 to $5,000. This amount will determine your credit line.
- Use the card responsibly: Just like any other credit card, you can use the BankAmericard® Secured Credit Card for purchases, bill payments, and cash advances. Make sure to stay within your credit limit and pay your balance on time including interest charges, if applicable.
- Repay your balance on time: Timely repayment of your balance helps build a positive payment history, which is vital for improving your credit score.
- Monitor your credit progress: Regularly check your FICO® Score and other credit reports to measure your progress and identify areas that need improvement.
- Graduate to an unsecured card (if eligible): If your responsible credit usage and payment history demonstrate good financial behavior, Bank of America may offer you the opportunity to upgrade to an unsecured credit card and receive your security deposit back.
Fees and Interest Rates
The Bank of America Secured Credit Card has no annual fee. This makes it an ideal choice for users who want to build or rebuild their credit without incurring additional costs.
APR and Balance Transfer Fees
For the Bank of America Secured Credit Card, the APR is 25.99% variable. Although this is considered a high APR, it’s not uncommon for secured cards aimed at individuals with poor or no credit history. When it comes to balance transfer fees, the card charges:
- 3% of the transferred amount or
- A minimum of $10.
Cash Advance and Foreign Transaction Fees
Using the Bank of America Secured Credit Card for cash advances can be costly. The card has a cash advance fee of:
- 5% per transaction or
- A minimum of $10.
In addition to this, the card comes with a 3% foreign transaction fee when making purchases overseas.
The Bank of America Secured Credit Card imposes penalty fees for late payments and returned payments. The fees are as follows:
- Late payment fee: Up to $40
- Returned payment fee: Up to $29
It’s important to note that the card does not have a penalty APR, meaning that your interest rate won’t increase due to late payments.
Credit Building and Financial Tools
Credit Score and Credit History
The Bank of America Secured Credit Card is designed to help individuals build or rebuild their credit. Cardholders receive free access to their monthly FICO® credit score, allowing them to track their progress and take appropriate actions to improve it. By making timely payments and keeping balances low, users can positively impact their credit history, which in turn, can lead to a higher credit score.
Bank of America Mobile Banking
Bank of America offers its cardholders a robust mobile banking app, making it easy to manage their finances on-the-go. Users can access their account information, view transactions, pay bills, locate nearby ATMs, and even deposit checks through the app. In addition, the mobile banking app provides financial education tools to help users understand credit and make informed decisions.
Overdraft Protection and Direct Deposit
To further support responsible financial behavior, the Bank of America Secured Credit Card offers overdraft protection when linked to a Bank of America checking or savings account. This feature helps cardholders avoid overdraft fees, as funds are automatically transferred from their credit card to cover any shortfall in their account.
Additionally, the card supports direct deposit, allowing cardholders to have their paycheck, social security, or other eligible income deposits directly into their account. This can help users better manage their finances and avoid late fees by ensuring funds are available when needed.
Digital Wallet Technology
The Bank of America Secured Credit Card is compatible with major digital wallet platforms including Apple Pay, Google Pay, and Samsung Pay. This allows cardholders to make secure, contactless payments by simply holding their mobile device near a payment terminal. By integrating their credit card with a digital wallet, users can benefit from the added security and convenience provided by these systems.
Application and Deposit Requirements
Applying for the BankAmericard Secured Credit Card
To apply for the BankAmericard Secured Credit Card, you will need to complete an application either online or in person at a Bank of America branch. During the application process, you will need to provide your personal information, including your income and employment details. A credit check will also be conducted to determine your eligibility for the card.
Minimum and Maximum Security Deposit
The BankAmericard Secured Credit Card requires a minimum security deposit of $200. This deposit acts as collateral for the bank and determines your initial credit limit. The maximum security deposit is $5,000, providing you with the flexibility to choose a deposit amount that suits your financial situation and desired credit limit.
Deposit Return and Credit Line Increase
After demonstrating responsible credit card usage and making timely payments, you may become eligible for a deposit return. If approved, your security deposit will be refunded, effectively transitioning your secured card to an unsecured card. Additionally, responsible usage may also result in periodic reviews of your account, potentially leading to a credit line increase without requiring an additional security deposit.
Rewards and Cash Back
Earning Cash Back on Purchases
The Bank of America Unlimited Cash Rewards Secured Credit Card allows users to earn unlimited 1.5% cash back on all purchases. This means that there is no limit on the amount of cash back rewards you can accumulate. Furthermore, the earned rewards don’t expire, providing ample time for users to redeem them as needed.
The Bank of America Customized Cash Rewards Secured Credit Card offers a more flexible approach, as it enables users to earn 1% to 3% cash back on different purchase categories. Cardholders can select the 3% cash back category from a list of available options, tailored to their personal spending habits.
Rewards Program Information
Both the Unlimited Cash Rewards and the Customized Cash Rewards Secured Credit Cards are part of Bank of America’s rewards program. This program ensures the cash back earned is automatically accumulated in the cardholder’s account.
The rewards program allows users to redeem their rewards in various ways, including statement credits, deposits into eligible Bank of America or Merrill accounts, or as a credit towards eligible travel and dining purchases. Additionally, the rewards can be used as gift cards or charitable donations if desired.
In summary, Bank of America’s Secured Credit Cards provide cardholders with opportunities for cash back rewards on their purchases, along with a flexible rewards program for optimal convenience and usefulness.
Comparing Competitor Secured Cards
Capital One Platinum Secured Credit Card
The Capital One Platinum Secured Credit Card is an excellent choice for people looking to build or rebuild their credit. It features a $0 annual fee and a low minimum security deposit of $49, $99, or $200 depending on your creditworthiness. The card comes with several benefits including:
- Access to a higher credit line after making your first five monthly payments on time
- Ability to monitor your credit score through CreditWise®
- Fraud liability protection
However, unlike the Bank of America secured card, the Capital One Platinum Secured Card does not offer any cash back rewards.
Discover It® Secured Credit Card
The Discover It® Secured Credit Card is another strong contender among secured credit cards. This card offers rewards, which sets it apart from many other secured cards. Cardholders can earn:
- 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter
- Unlimited 1% cash back on all other purchases
Moreover, Discover provides a first-year cashback match, which doubles all the cash back earned in your first year as a card member. Similar to the Capital One Platinum Secured Card, there is no annual fee, and the minimum security deposit is $200. Discover also conducts automatic account reviews starting at eight months for potential graduation to an unsecured card.
Both the Capital One Platinum Secured Credit Card and the Discover It® Secured Credit Card offer competitive options for those looking to build credit. While neither card charges annual fees, they differ in their reward structures and initial security deposit requirements.
Customer Service and Fraud Alerts
The Bank of America Secured Credit Card offers reliable customer service to its cardholders. In case of any issues or inquiries, cardholders can contact Bank of America’s customer support team through various channels, such as phone or online chat. One noteworthy benefit is the $0 fraud liability feature. This means that cardholders won’t be held responsible for unauthorized charges, providing them with an added layer of security against fraud.
Foreign Currency and Transactions
When using the BankAmericard Secured Credit Card for foreign transactions, it’s essential to be aware of the associated fees. Typically, cardholders may encounter a foreign transaction fee, which can vary depending on the card’s specific terms and conditions. In addition, the variable APR (Annual Percentage Rate) for the card might fluctuate, leading to different interest charges when carrying a balance. It’s important to be mindful of these factors when making transactions in foreign currency so that cardholders can manage their credit and expenses efficiently.