When your credit is on the rocks you may find yourself needing a credit card to help you rebuild — but unable to get approved for one. If you’ve had delinquencies or a bankruptcy in the past, you will probably have to start from the ground up — a secured credit card.
With these cards there are several drawbacks (like the security deposit, lack of benefits, and fees). However, the major benefit is that almost virtually anyone over 21 can get approved even if your credit history has had a checkered past. But is the Bank of America secured credit card the best way to go?
Quick Overview: Compared with other secured cards, Bank of America’s offer is pretty good. I think the best way to look at BofA’s offer is thinking of it as a fully secured card (which it is) with a $39 annual fee.
Check out these reviews of the best secured credit cards to see how BofA stacks up against the competition.
Now, here’s how Bank of America runs their program…
The BofA secured Visa card in a nutshell
- This is now a fully secured card, so every $1 of your deposit = $1 worth of credit limit. In the past Bank of America used to offer partially secured (a $500 limit for a $99 deposit) that anyone could openly apply for, but they stopped that during the recession. Now it’s rarely offered, as the only time I hear about it is when they send it as a targeted offer to certain banking customers.
- The amount of the security deposit can range from $300 to $4,900 (don’t ask me why they do $4,900 instead of an even $5k, but that’s how it is). They used to allow you to do a higher deposit of up to $10,000 (which meant a $10k credit limit) but sometime back in 2010 or 2011 they chopped that down to the $4,900 maximum.
- The annual fee is $39. This is actually fairly reasonable when compared to other secured offers on the market that charge $50 or more.
- The APR is 20.24 percent at time of this review and according to the application, everyone is given the same rate (no better, no worse).
- The card comes with an EMV chip. As with most U.S.-issued EMV cards, this one has chip-and-signature technology (Bank of America doesn’t do chip-and-PIN, which is the norm abroad). Still, it’s a nice feature to have on a secured card, given that EMV is most commonly offered on premium cards.
The compliments and complaints?
Pro: Possible conversion of secured to unsecured
Con: You may have to wait a very long time!
The credit card’s application says this:
Sounds good, right? Well the main complaint about this is that whether or not you’re eligible for a conversion might not be entirely based on how well you manage the secured credit card from Bank of America.
Instead – if you look above that term – you will see your credit limit is based on “income, ability to pay, and security deposit.”
So even if you maintain a perfect history with your secured account, it might not be enough to score an unsecured conversion. This is by far the #1 complaint I see about this card.
I have read reviews from customers on the forums who say they have had this credit card for 2 or almost three years and still don’t qualify for the conversion! The reason? Their credit report doesn’t show enough other accounts to qualify.
For example one poster said that BofA refused to upgrade him because his only other line of active credit was a car loan he had through BofA. Even though the loan was almost three years old and the secured credit card more than two years old, they wouldn’t do it because they wanted to see even more active credit accounts on file. Plus, even after you’re upgraded to an unsecured account and get your deposit back, the annual fee may still continue to be charged. For a card with few extra benefits, that’s not a good deal.
Conclusion? In order to qualify for the unsecured upgrade, you will probably have to build up a credit history. And by that time you might as well just apply for an unsecured card elsewhere.
PRO: The annual fee is low.
CON: You don’t get much in return… just a basic Visa with few benefits.
Still, $39 is pretty low in comparison to some other secured cards on the market. You’re getting the card for credit building — not for earning rewards.
PRO: Bank of America is huge, with branches coast to coast.
CON: On the entry and mid-tier credit cards, customer service complaints are common… especially for this one.
However in my personal opinion, the sub-par phone support department isn’t a maker or breaker because let’s be honest… most cards in the secured category will be the same.
I think the biggest drawback is that you can’t get much help from Bank of America branches for your credit card. In the past I’ve gone in and asked for assistance in dealing with an issue (and this is for an unsecured card) but all they tell me is to call customer support because the branches don’t handle credit card support. If I stop and really think I guess it makes sense with these huge bank holding companies – their operations are completely segregated in different lines of business, so it probably shouldn’t be surprising a bank teller couldn’t help with a credit card issue.
So logic would tell you that getting a card from BofA might make sense since you would have a local branch to walk in to and ask a question or pay your bill. But, because their local branches don’t deal with the cards, it’s basically no different than dealing with a card issuer a thousand miles away.
Worth it or not?
I’d say go for it if you’re already a customer of theirs for your checking/savings. HOWEVER, part of rebuilding credit is having accounts from multiple creditors. So you should get more than one credit card.
I would recommend trying out this card finding tool to see if there are any offers you are matched for – and best of all this tool won’t require the pulling of your credit report.
This post was written or last updated February 2016