USAA offers a Secured Card American Express Credit Card designed to help individuals improve their credit scores. This card is geared towards those whose credit is not quite up to the standards of traditional banks but are eager to take steps to build or rebuild their credit history. With a security deposit requirement and a range of interest rates, this card can be an effective tool in credit score improvement when used responsibly.
Customers have provided mixed reviews about USAA’s secured credit card with an average rating of 3 out of 5. However, many appreciate the card’s availability to those with fair credit, limited history, or bad credit. As with any financial tool, the success of using this credit card to improve credit depends on the user’s commitment to responsible spending and making on-time payments.
It’s important to note that the USAA Secured Card American Express Credit Card comes with fees and an annual percentage rate (APR), which may vary depending on the customer’s creditworthiness. In any case, the cardholder’s responsible use and understanding of the terms and conditions can help pave the way to a better credit score and, eventually, access to more traditional credit options.
USAA Secured Credit Card Overview
Benefits and Features
The USAA Secured Credit Card is designed for USAA members who are looking to build or rebuild their credit. This card offers a variety of valuable benefits, including:
- Credit reporting: USAA reports your payment history to the three major credit bureaus, helping you establish or improve your credit score with responsible use.
- No foreign transaction fees: This benefit makes the card ideal for members who travel internationally.
- Security deposit: Cardholders are required to make a minimum security deposit of $250, which becomes their credit limit. This acts as collateral to help protect the issuer from potential losses.
- APR: Depending on your creditworthiness, you may qualify for a competitive interest rate.
Card Types: Visa and American Express
USAA offers two types of secured credit cards for members with limited credit history or repairing their credit score: the USAA Secured Card® Platinum Visa® and the USAA® Secured American Express® Card.
| Card Type | USAA Secured Card® Platinum Visa® | USAA® Secured American Express® Card |
|---|---|---|
| Annual Fee | $0 | Variable, based on creditworthiness |
| Credit Reporting | Yes | Yes |
| Minimum Security Deposit | $250 | $250 |
| Foreign Transaction Fee | None | None |
Both cards share similarities, such as no foreign transaction fees, credit reporting, and a minimum security deposit requirement. However, the USAA Secured Card Platinum Visa has no annual fee, while the annual fee for the USAA Secured American Express Card depends on the cardholder’s creditworthiness. It’s important for potential cardholders to carefully review all the terms and conditions of each card before selecting the one that best fits their needs.
Eligibility and Application Process
USAA Membership and Military Service
To apply for the USAA Secured Credit Card, you must be a USAA member. USAA membership is available to active, retired, and honorably separated officers and enlisted personnel of the U.S. military. Additionally, eligible family members include widows, widowers, un-remarried former spouses of USAA members, and children of USAA members.
Approval Factors and Credit History
The approval process for the USAA Secured Credit Card considers factors such as your credit score and credit history. Although having a poor credit score may not necessarily disqualify you, having a good credit history improves your chances of getting approved.
To apply for this card, follow these steps:
- Sign in: If you’re an existing USAA member, sign in to your account on the USAA website. If you aren’t a member yet, start by creating an account and becoming a member.
- Complete application: Once signed in, navigate to the credit card application section and fill out the required information, including personal and financial details.
- Submit your application: After reviewing your information, submit your application for further review and wait for an approval decision.
If approved, you will need to open a Certificate of Deposit (CD) as your card’s security deposit. The amount you deposit into the interest-earning CD depends on your card’s credit limit, which starts at $250 and can go up to $5,000. Your CD earns interest, and the amount deposited is not used to make your payments. To use the card, simply follow the card usage guidelines provided by USAA.
Costs and Fees
Annual Fee and Interest Rates
The USAA Secured Credit Card has an annual fee of $35, a moderate amount compared to other secured credit cards. The card offers a competitive interest rate, with the APR for purchases and balance transfers standing at 11.90% to 21.90% depending on your creditworthiness (as of Jun 08, 2023). Keep in mind that these interest rates are variable and may change over time.
If you fail to make timely payments, the card may impose a penalty APR. It is important to be aware of potential penalties and stay on top of your payments to avoid any negative impact.
Foreign Transaction and Cash Advance Fees
For those who frequently travel abroad or make purchases in foreign currencies, the USAA Secured Credit Card charges a foreign transaction fee of 1% on each transaction. This fee is relatively low compared to many other credit cards on the market.
Regarding cash advances, the card imposes a cash advance fee of 3% of the amount advanced (with a minimum fee of $200). Additionally, the cash advance APR is set at 24.90%, which is higher than the purchase APR. It’s wise to use cash advances sparingly, as they can become costly.
Remember to keep track of your spending and make timely payments to benefit from the USAA Secured Credit Card. Keeping a close eye on your fees can help you improve your credit and move towards a stronger financial future.
Credit Limit and Security Deposit
Certificate of Deposit and Savings Account
The USAA Secured credit card requires a minimum security deposit of $250, which is held in a 2-year Certificate of Deposit (CD) account, earning interest at variable rates. The credit limit on the card is equal to the deposit made, and the maximum security deposit allowed is $5,000. You can fund the security deposit with either a checking or savings account.
Interest rates on the CD depend on market conditions but may provide a helpful return that partially offsets the costs associated with using the secured card. It’s important to be mindful of foreign transaction fees when using the card internationally, as these additional charges can quickly add up.
Graduation to Unsecured Card
Over time, responsible use and timely payments on the USAA Secured credit card can help improve your credit score. Graduation to an unsecured card is possible when you make consistent, on-time payments and demonstrate good financial management. Keep in mind that the decision to graduate is at the discretion of the issuing bank, and each institution has its own criteria for determining eligibility.
When upgrading to an unsecured card, the security deposit held in the CD account becomes available to you again, as your improved credit score may enable you to qualify for a credit card without a collateral requirement.
Rewards and Perks
Cash Back and Bonus Categories
The USAA Secured Card American Express offers a rewards program designed to help cardholders earn points for their spending. Cardholders earn 1 point for every dollar spent on all purchases, with no cap on the number of points they can accumulate. These points can be redeemed for cash back, travel, merchandise, and gift cards.
Travel Benefits and Insurance Coverage
The USAA Secured Card American Express offers various travel benefits and insurance coverage to cardholders. These include:
- Travel accident insurance: This card provides coverage for accidental death or dismemberment while traveling on a common carrier (such as a bus, train, or airplane) when the fare has been charged to the card.
- Trip cancellation and interruption coverage: If a trip is canceled or interrupted due to a covered reason, such as illness or severe weather, the cardholder can receive reimbursement for non-refundable, pre-paid travel expenses up to a certain limit.
- Auto rental coverage: When renting a vehicle and charging the rental to the card, cardholders can receive secondary collision damage waiver coverage, which provides reimbursement for damage due to collision or theft, up to the actual cash value of the rental vehicle.
- Baggage delay reimbursement: If your checked luggage is delayed by more than 4 hours, the card provides reimbursement for the purchase of essential items, such as clothing and toiletries, up to a specified limit.
Please note that these benefits are subject to certain terms and conditions, so it is essential to review the Cardmember Agreement for complete details.
The USAA Secured Card American Express does not offer some popular travel perks, such as priority boarding or complimentary lounge access. Balance transfers are also not available with this card.
Nonetheless, the USAA Secured Card does provide extended warranty protection on eligible purchases, which can add up to one additional year to the manufacturer’s warranty. This can be valuable when cardholders purchase big-ticket items or electronics with their card.
Building and Managing Credit
Credit Utilization and On-Time Payments
The USAA Secured Credit Card is an excellent option for individuals looking to build or improve their credit history. By offering a credit line based on a security deposit, cardholders can start with a credit limit between $250 and $5,000, which provides ample room for responsible spending without tipping the credit utilization ratio.
Credit utilization is an important factor in credit scoring, and ideally, you should keep your credit utilization ratio below 30% of your total credit limit. The USAA Secured Credit Card makes it easy to monitor and manage your credit utilization, helping you build a good credit score over time.
Another crucial aspect of building credit with the USAA Secured Credit Card is making on-time payments. By consistently paying off your statement balance on or before the due date, you can develop a strong repayment history and avoid interest charges and potential negative impacts on your credit score.
Customer Service and Reviews
USAA is known for providing excellent customer service, and their Secured Credit Cards are no exception. There is a zero liability policy in place, protecting cardholders from unauthorized transactions and providing a sense of security for those using their card.
In addition, the USAA Secured Credit Card has no foreign transaction fees, making it suitable for international use, and there are no fees for cash advances. While the card doesn’t offer rewards like some other products aimed at individuals with good credit, it is an excellent tool for building credit and establishing a solid foundation for future opportunities.
Customer reviews for the USAA Secured Credit Card are mostly positive. The card’s regular APR appears to be competitive, and many reviewers are pleased with the ease of managing their account and making payments.
In summary, the USAA Secured Credit Card offers a great opportunity for individuals with bad credit or no credit history to build and manage their credit responsibly. By carefully monitoring credit utilization, making on-time payments, and enjoying the perks of USAA’s excellent customer service, cardholders can pave the way for a brighter financial future and work towards escaping the cycle of debt.
Frequently Asked Questions
Credit score impact?
A secured credit card like the USAA Secured Card American Express can help improve your credit score if used responsibly. By making on-time payments and keeping your credit utilization low, you can demonstrate good credit habits and increase your credit score over time.
Graduation to unsecured?
Graduating to an unsecured card depends on the card issuer and your credit habits. While some card issuers have policies in place for upgrading secured cards to unsecured cards once you’ve demonstrated responsible credit usage, there is no specific information available on the USAA website regarding graduation to an unsecured card.
Comparing with Amex?
The USAA Secured Card American Express is processed by American Express, making it a unique option among secured cards. However, it is important to note that this card is a USAA product and not directly issued by American Express. Thus, the benefits and terms may differ from those offered by mainstream American Express cards.
USAA card benefits?
USAA credit cards come with several benefits including fraud protection, identity theft resolution services, travel insurance, and rental car insurance, as well as access to USAA-exclusive member discounts and opportunities. Keep in mind that specific benefits may vary depending on the card you choose.
Any downsides?
One potential downside of the USAA Secured Card American Express is that it is only available to USAA members, which means you must be active military, ex-military, or have a parent or spouse who is a USAA member to be eligible. Additionally, the card may have a higher annual fee compared to other secured cards on the market.
Best alternative cards?
If the USAA Secured Card American Express is not the right fit for you, there are alternative secured cards to consider. Some popular options include the Discover it® Secured Card, the Capital One Platinum Secured Credit Card, and the Skylight ONE Visa® Prepaid Card. Be sure to compare fees, interest rates, and benefits when evaluating your options.
