Last year, CNN Money included it in their “best cards for bad credit” list. Is it really deserving of the hype?
Over a year ago, back in spring 2012, CNN Money ran an article where a journalist listed what they considered to be the 8 best cards for bad credit. Number 3 on that list was the Digital Federal Credit Union secured card.
Is it really one of the best? Here’s a review of the pros and cons…
- Easy approval: Since it’s secured, your credit history in and of itself won’t prevent you from being approved. Having no history, a bad history or even bankruptcy is accepted. How good or bad your credit score is has no bearing on the approval process.
- No annual fee: Perhaps the biggest selling point of this card is that there’s no annual fee. Most secured cards charge fees ranging from $20 to $50 so this is definitely a pleasant surprise.
- Low interest rate: The card carries an 11.5% variable APR. This is less than what many other secured cards charge. Of course as is the case with this and every other card, if you pay your bill in full each month you won’t have to worry about paying any interest.
- Same APR for transfers and cash advance: Most cards charge a few extra percentage points on cash advances, but not this one.
- Visa Platinum benefits: Of course having a “platinum” credit card doesn’t mean anything these days (and it’s no longer the highest tier of Visa) but it’s still nice to get benefits like auto rental collision damage waiver and common carrier travel accident insurance on eligible purchases.
- You must be a DCU member to apply: You can’t even access the application for DCU’s secured card unless you have a login for their credit union. If you’re not a member, you can join under a qualifying “field of membership” which includes being a participating employer (mostly Massachusetts and Georgia based companies) or living in selected GA and MA cities. Alternately, you can join if someone in your immediately family is already a member. If you don’t meet any of the above requirements, you can still get a membership by paying dues (ranging from $10 to $120) to one of several non-profit organizations.
- High minimum security deposit: Most secured accounts accept deposits as low as $200 or $300. However the secured credit card from DCU requires at least $500 to open the account.
- No upfront game plan on graduation: Many secured cards will “graduate” into unsecured, or at least earn credit limit increases which are unsecured. One thing that is alarming is that DCU has no publicly published policy on their website about this. If they do it, they’re certainly not shouting it from the rooftops. I have yet to see any customer reviews of it graduating, but that’s not to say it doesn’t happen.
Verdict for 2013?
Hype? It’s justified. The DCU Visa Platinum secured card makes a lot of sense if you’re already a member of their credit union. If you’re not a member and don’t meet the qualifications (mentioned above) then it’s probably not worth getting, since you would have to pay a membership due to one of the non-profits they endorse. So even though the credit card itself is free, the due you would pay would still be costing you money.
If you’re in the process of building or re-building your credit, then remember it’s best to have at least a couple forms of credit. The DCU card can be one, but what about the other? If you need a suggestion, I highly recommend this one which coincidentally was also the first one listed in the same article that listed DCU.
This article was written or last updated May 2013