Union Plus Secured Credit Card Review

If you're in the AFL-CIO and need a secured card, this card costs only $20 a year.

• Union members who don’t have a credit history, been turned down for a credit card or are rebuilding their credit.

Credit Rating Required

• Poor or Bad (Below 660)

Pros

• Automatic reporting to credit bureaus as a regular credit card.
• Modest security deposit required.
• Low annual fee.
• Relatively low APR.
• No application fees.
• Eligibility to be considered for regular card after 18 months of on-time payments.
• Deposit earns interest.

Cons

• Must be a union member to be eligible.

Rewards

• None.

APRs

• 16.99% on purchases and balance transfers.
• Penalty APR: 24.99%.

Fees

• Annual fee: $20.
• Balance transfer fee: 4% of balance.
• Late payment fee: $35.
• Returned payment fee: $25.
• Over-the-limit fee: $25.

As secured credit cards go, this is one of the better cards on the market. However, you must be a member of a union affiliated with the AFL-CIO to be eligible.

The $20 annual fee is relatively low, and the APR, while not the lowest available at 16.99%, is in line with most conventional credit cards. Of course, you can easily avoid paying interest by paying your bill in full and on time, which is what you should be doing anyway. There's no application fee, as many other secured cards charge.

One of the best features about the card is that your payment history is reported to the credit bureau as a regular credit card, not a secured card. Very often, secured cards on your record are a red flag to lenders, who then view you as a big risk, making it harder and more expensive for you to get a loan. As it is, the card's bank issuer, HSBC, says it will consider you for the regular Union Plus credit card after you make on-time payments for 18 months.

To get the card, you must put up a security deposit of between $250 and $5,000, which becomes your credit line. And your deposit earns interest - many other secured cards pay no interest on deposits.

You must pay at least your minimum payment each month in order to build your credit - don't count on your deposit to make that payment for you.

If you're not a union member and need a secured card, check out the Orchard Bank Secured MasterCard, which is issued by an affiliate of HSBC. It's one of the best secured cards on the market. The card carries a $35 annual fee, but it is waived the first year, and the APR is a very low 7.9%.