When you think of a credit card for bad/fair credit, probably the last thing that comes to mind is rewards, let alone good ones. But surprisingly that is exactly what this new version of the Household Bank credit card will give you! But is 2% cash back too good to be true? Should you apply even if you have great credit? Here are some points you need to consider…
2013 Update: Unfortunately this offer has once again been discontinued for new applicants (and this time, it looks like it will be gone for good). For the next best thing if you have fair or troubled credit, check out these top cards for fair credit.
What are your rewards?
Obviously this is the most enticing aspect of the card so let’s talk about it first.
You get 2 points per dollar spent on all purchases. In the fine print it says that cash back redemption starts at $25 for 2,500 points, which equals out to be a staggering 2% rebate.
If you don’t want cash back, you can redeem for merchandise, magazines, and the usual things you come to expect these days from a credit card rewards program. However they don’t provide additional details except for saying “other reward redemptions start at 500 points” so it’s not possible to evaluate what value you would get by opting for the other options. My advice? Stick with the cash back because that equals 2 percent!
Is there a fee?
There are two versions of the Household Bank rewards card. One is an unsecured card with a $0 annual fee and the other is a secured card with a $39 annual fee.
Unfortunately there are not separate applications for each. Rather there is just one Household Bank credit card application – when you submit it, whether you get the unsecured (free version) or the secured will be entirely based on your credit.
Given that this is a card geared towards those with subpar credit, I would guess anyone with average credit and above has a good chance of getting the free unsecured version.
Do you have great credit?
“Should I apply for the Household Bank card even if I have great credit?” There’s already a discussion on the forum asking that and here are my thoughts…
If you have good credit, obviously you would likely receive the no annual fee version. So essentially you would have a free card that gives 2%. Now there is one other free 2% card in existence from Fidelity, but the only drawback with that one is you have to have a Fidelity account to qualify. If you don’t want to do that, then this Household Bank offer is pretty darn compelling as far as the 2% rebate is concerned.
With that said you there is a drawback to consider and that is the customer service. I tried calling them myself to get additional details on the card- a recording answered telling me I need to have an account to get support and then it hung up on me. So if that’s any clue, I think it’s safe to say you can’t expect the world from the Household Bank customer service dept. (which by the way is a subsidiary of HSBC). Furthermore, the APR for the unsecured version is high at 19.9%. But if you’re willing to endure those drawbacks for the higher 2% payout, then by all means go for it.
Do you have bad/fair credit?
The secured Household Bank card offers free reporting to the 3 major credit bureaus, online account management, and periodic credit limit increases for those who qualify. The minimum deposit is a low $200 (much lower than many other secured cards).
To be completely honest with you, if you have poor credit or are looking at rebuilding credit, this is probably the best deal out there right now, assuming your goal would be to earn rewards and not carry a balance. The $39 annual fee is quite reasonable and the interest rate for the secured is only 7.9% (but remember, pay your bill in full because it won’t make sense to earn 2% cash back and pay 7.9% interest).
As mentioned above, I wouldn’t expect the red carpet treatment from the customer service department, but for poor/fair credit, that is unfortunately what you can typically expect regardless of the issuing bank.
How to get this offer, bad and good credit alike?
As an advertising partner of Household Bank, here is the current offer CreditCardForum is featuring for this card. You can use this to check first if you pre-qualify: