Here are three of the worst secured credit cards. They top our worst secured credit card list because of their high fees and high interest rates. They also tend to be stingy with granting credit limit increases.
1. Applied Bank Secured Visa Card
This card ranks as the worst secured card we looked at because of its high fees and very low credit limits.
There’s no application or set-up fee, but there is a $50 annual fee the first year. After the first year, that fee is dropped, only to be replaced by a monthly fee of $9.95 – or almost $120 a year!
The bank charges $100 each time your meager credit limit is increased. Credit limits, which are based on the size of the security deposit you put up, are outrageously small – just $200 to $500. The bank doesn’t pay interest on your deposit either. There's no grace period, so your balance starts incurring interest immediately.
The only thing going for it is that it’s easy to get – there are no credit checks.
2. Public Savings Bank Visa Secured Card
This card made the worst secured credit card list even though it carries one of the lowest interest rates, 11.24%, in the secured card arena. Plus there’s even a zero percent APR for the first six months.
But the $75 set-up fee is way too high -- the highest we've seen. Plus the bank charges you $25 every time it increases – or even decreases – your credit limit. If the bank is going to take so much of your money, there's not going to be a lot left on your credit limit. How is that going to help your credit rating?
3. First Premier Bank Secured MasterCard
This card has a high annual fee ($50), a high APR (19.9 percent), and is stingy on granting credit limit increases. All three of those things makes it one of the worst secured credit cards out there.
On the plus side, if the bank increases your credit limit, it requires that you only post 50% of that amount as a deposit. But it won’t consider increasing your credit limit until you’ve been a customer for more than a year, and even then the increase won’t be more than $100. That's way too long to wait, plus it will hinder your progress in graduating to an unsecured card.