When your credit is shot, these days you don’t have much choice when it comes to rebuilding credit. If you’ve had delinquencies or a bankruptcy, you will probably have to start from the ground up – a secured credit card.
Now I’m not going to lie… obviously there are many drawbacks with them (like the security deposit, lack of benefits, and fees). However the major benefit is that almost anyone can get approved, even with jacked up credit history is. But is the Bank of America secured credit card the best way to go?
Quick Overview: In all fairness, it isn’t a “bad” offer, as long as you (1) are okay with applying at a branch, because you can’t apply online, and (2) don’t apply with the assumption it will automatically become unsecured. Instead, I think the best way to look at BofA’s offers 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. My favorite one for 2013 is this:
And here’s the full 411 on 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 $39.00. This is actually fairly reasonable when compared to many other secured offers on the market.
- There’s a 20.24% APR at time of this review and according to the application, everyone is given the same rate (no better, no worse).
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 3 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 3 years old and the secured credit card over 2 years old, they wouldn’t do it because they wanted to see even more active credit accounts on file.
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 any ol’ unsecured card elsewhere, so what’s the point?!
PRO: The annual fee is low.
CON: You don’t get much in return… just a basic Visa with few benefits.
$39 is pretty low in comparison to some others on the market. But there are secured credit cards with lower fees than this.
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 subpar 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 help 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.
So logic would tell you that getting a card from BofA might make sense since you would have a local branch to go to. But in actuality since 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 to see if there are any offers you are matched for:
This post was written or last updated November 8, 2013