Navigating the U.S. credit system can be tricky for Americans and newcomers alike. A secured credit card can be a helpful stepping stone—applicants can get approved even if they have “bad” credit or no credit at all.
To get a secured card, credit card companies require you send a refundable security deposit. With the OpenSky® Secured Visa® Credit Card, you can make a deposit between $200 to $3,000, which will determine your credit line. You’ll get the deposit back when you close your account, assuming you’ve paid off the balance.
A secured credit card can be a great way to get started in the U.S. credit system and build credit without taking out a loan. But there are also many secured cards to choose from, and some are better than others. The OpenSky® Secured Visa® Credit Card stands out because you don’t need a credit history or bank account to get the card, but it also has fees that you can avoid with other options.
Alternative credit cards to consider
The OpenSky® Secured Visa® Credit Card stands out as a good secured card for those who don’t have a bank account and haven’t established their credit, or have poor credit and don’t want a credit check. But as a newcomer to the U.S. you may be able to qualify for a great card that offers similar credit-building opportunities but has fewer fees and more rewards.
Depending on your home country, you may want to start your search by reviewing American Express credit card offers. Nova Credit and American Express have formed a partnership, and applicants with a credit history from Australia, Canda, India, Mexico or the UK may be able to apply for an Amex card in the U.S. based on that credit history.
Here are a few top picks, along with some options from other issuers.
American Express Cash Magnet® Card
If you’re looking for easy-to-use rewards and no annual fee, the American Express Cash Magnet® Card could be a good fit. Using the card, you’ll earn 1.5% cash back on your purchases and new cardholders can qualify for introductory bonus cash back rewards. But depending on your travel and purchase plans, you do want to watch out for the 2.7% foreign transaction fee.
Blue Cash Everyday® Card from American Express
The Blue Cash Everyday® Card from American Express also doesn’t have an annual fee, although it charges the same 2.7% foreign transaction fee, and it has a tiered rewards program. You can earn 3% cash back on your purchases at U.S. supermarkets (up to $6,000 in purchases per year), 2% cash back at U.S. gas stations and select U.S. department stores, and 1% cash back on your purchases elsewhere. Depending on your shopping habits, this could be more rewarding than a flat-rate rewards program. And, new cardholders can qualify for an intro bonus cash back offer.
One of the Deserve credit cards
If you don’t have credit history that will help you qualify for an Amex card, or prefer something else, consider one of Deserve’s three unsecured cards. You don’t need a credit history to qualify. Instead, Deserve can approve an application based on information from a linked U.S. bank account. The three cards don’t have an annual fee or foreign transaction fee, and two of the cards offer a rewards program. One drawback is that they only report your accounts to two of the three major U.S. credit bureaus, TransUnion and Experian.
Petal® Visa® Credit Card
You can also consider the Petal® Visa® Credit Card, which doesn’t have an annual fee, reports to all three credit bureaus and offers cash back rewards on purchases. The card also doesn’t have a foreign transaction fee or late payment fees. However, while you don’t need a U.S. credit history to qualify, you will need to link an eligible U.S. bank account to apply.
OpenSky® Secured Visa® Credit Card highlights
No U.S. credit score or history required
No credit check or hard pull
You don’t need a U.S. bank account to qualify
Apply with a Social Security number (SSN) or Individual Tax Identification Number (ITIN)
Reports your account to all three major credit bureaus: Equifax, Experian and TransUnion
Has a $39 annual fee
Requires at least a $200 security deposit, which will determine your credit limit
High interest rate
No rewards and few cardholder benefits
There’s a 3% foreign transaction fee
Where the OpenSky® Secured Visa® Credit Card shines
The OpenSky® Secured Visa® Credit Card may be a good option if you’re looking to build credit in the U.S. Here are a few reasons why:
No credit check
While secured credit cards are designed for people who are new to credit or have poor credit history, some of these cards still require a credit check—when the issuer reviews your credit report. But that’s not the case with the OpenSky® Secured Visa® Credit Card. There’s no credit check and no “hard pull,” a record of a credit check that can sometimes hurt credit scores.
You can still get denied for the card if:
Your monthly income is lower than your monthly expenses
You already applied for a card from Capital Bank (which offers this card) four or more times within the previous 60 days
You have two or more open credit cards from Capital Bank
You have an account with Capital Bank that’s in bad standing
However, it may be easier to get approved for this card than others that require a credit check.
No bank account required
Every secured credit card requires that you send the issuer a refundable security deposit—that’s what makes it “secured.” Often, you’ll need to do this by sharing your bank account information and letting the card issuer pull the funds from your account.
However, if you don’t have a U.S. bank account yet, you can send in your security deposit for the OpenSky® Secured Visa® Credit Card with a check, money order or Western Union transfer. If you have a checking account, the fastest way to open a OpenSky® Secured Visa® Credit Card is to use your debit card to send the security deposit.
Apply with an ITIN
Some credit card issuers let you apply for a card using an Individual Tax Identification Number (ITIN), or even your passport, which can be helpful for U.S. newcomers who don’t qualify for an Social Security Number (SSN).
Reports to all three bureaus
Your OpenSky® Secured Visa® Credit Card account and monthly activity will be reported to Equifax, Experian and TransUnion, the three major consumer credit bureaus in the U.S. Having credit reports and credit histories with all three bureaus can be important because you don’t know which credit report other financial institutions will want to review.
For example, if you apply for a loan, the lender may want to review your Equifax credit report. But if you only have accounts that send information to Experian and TransUnion, you won’t have an Equifax credit history.
It’s not always an issue as the lender may be able to check one of your other credit reports instead, but having a card that reports to all three bureaus can help prevent potential delays.
Drawbacks of the OpenSky® Secured Visa® Credit Card
The OpenSky® Secured Visa® Credit Card could be a good option if you don’t have a U.S. bank account or credit history. However, there are downsides to consider, and other cards may be a better fit if you’re trying to build credit in the U.S. Here are a few things to watch out for:
There are several fees
Many credit cards in the U.S. have fees that you can avoid depending on how and where you use your card. Some cards also have an annual fee, which you pay when you first sign up for the card and annually on your cardholder anniversary.
The OpenSky® Secured Visa® Credit Card has a $35 annual fee, which is in line with the annual fee you’ll pay for other secured cards. However, there are secured cards that don’t have an annual fee and can help you build credit just as well.
There are also several usage-based fees, such as a 3% foreign transaction fee, which is added to any transaction made outside the U.S. or in non-U.S. dollars. There are also late fees (if you don’t pay your bill on time) and a cash advance fee if you use your card to take out cash from an ATM or at a bank. Avoid these costly fees by making sure you submit at least the minimum payment on time and only using your card for purchases.
There are no balance transfer fees, but that’s because you’re not allowed to transfer a balance to the card. You can see an overview of the fees and other details of the card within the cardholder agreement—which is linked to in the card application page.
You may pay a lot in interest if you carry a balance
As with other credit cards, you can use your card for purchases and only pay off part of the balance. If you do, the unpaid portion of your balance gets carried over (or “revolves”) to the next month and begins to accrue interest based on your card’s annual percentage rate (APR). Your purchases will also start to accrue interest immediately.
The OpenSky® Secured Visa® Credit Card has the same APR for all cardholders, and it can vary over time. It’s not especially high compared to other secured cards, but you could still wind up paying a lot of interest.
If you’re focused on building credit, try to only use your card for a few small purchases each month and don’t use a lot of your available credit. For example, if your credit limit is $200, only make $20 worth of purchases. Then, pay your bill in full by the due date to avoid interest.
There are no rewards and few cardholder benefits
The OpenSky® Secured Visa® Credit Card doesn’t offer many additional cardholder benefits, such as extended warranties on purchases or travel insurance. It also doesn’t have a rewards program. These aren’t common on secured credit cards, but you may qualify for other cards that offer benefits or rewards and don’t require a credit history in the U.S.
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