Do you have a bankruptcy on your credit report or just a low credit score? Do you have a short credit history or none at all? Have you had challenges finding a credit card that will accept your request for a card?
It’s frustrating when a credit card is the fastest way to rebuild your credit, but you haven’t found a credit card company willing to accept your request for a card.
There’s a line of credit cards that target people who are credit-challenged.
In this article, we’ll review the First Progress Platinum Secured card so you can determine if this may be the right card for you.
The Basics
Let’s start with the differences between a secured card and an unsecured card. A secured card requires a cash security deposit. This reduces the risk for the credit card company and allows someone with a lower credit score to be considered for the card.
When you fill out your request form and pay your initial deposit, the cash deposit that you put down will be equal to your line of credit. The First Progress Platinum Secured card allows people to put down deposits of between $200 and $2,000 to open their account.
The issuer offers three different platinum cards, each with a different annual fee and interest rate.
Platinum Elite
- Annual Fee: $0 the first year, then $29
- APR: 19.99% variable
Platinum Select
- Annual Fee: $0 the first year, then $39
- APR: 14.99% variable
Platinum Prestige
- Annual Fee: $0 the first year, then $44
- APR: 11.99% variable
Depending on how much of a monthly balance you plan on carrying over from month to month will help you to make the best choice between the three cards.
Carrying a Monthly Balance
Even with the Platinum Prestige card and an APR of 11.99% variable, it’s not a great idea to carry a monthly balance with an unsecured card. Sometimes it’s unavoidable if you have an emergency or unplanned expense. If you’ve tied up your cash in the deposit for the card, you may not have any other options.
The reason not to carry a monthly balance goes beyond the APR. Your credit score is determined in part by your credit utilization. This is your outstanding balance on your card as a percentage of your overall credit limit.
If you open a secured card with a $500 deposit, you’ll have a $500 credit limit. Let’s say your car needs some unexpected repairs that cost $450 and you don’t have the money to pay it all off in the same month. Instead of going into the following month with a low debt to credit ratio (meaning you owe $0 against a limit of $500), your debt to credit ratio will be much higher.
The ideal balance to aim for is 10% of your total limit. Carrying a balance of $50 on a $500 credit limit should be your goal. The next level is carrying a 30% balance. It’s clearly not as good as a 10% limit, but still okay.
Paying on Time
Paying your minimum balance on time every month is also important to improve your credit score. In the event you need to carry a balance to the next month, it’s even more important to make sure that your payment is in on time. The issuer offers a 25 day grace period.
Card Availability
The card is available in most states with the exception of Arkansas, Iowa, New York, and Wisconsin.
Additional Fees
In addition to the annual fees, cardholders can expect to pay 3% on foreign transactions. Late payment fees can go up to $35, returned payments are $25, and expedited phone payments are $10.
The Pros
To request a First Progress Platinum Secured card, no credit is required. For those with no credit history or poor credit history, requesting a card is no issue. The good news is that the request form can be completed simply and easily online.
There are no fees to process or review your request for the card. While you will have to pay a deposit if your card request is approved, this is not a prepaid debit card.
All of your activity on this card will help to build or rebuild your credit. Your transactions are reported to all three credit agencies. If you follow the advice regarding the percentage of debt ratios and paying on time, the card will help you build credit over time.
The deposit that you pay up front, between $200 and $2,000, is fully refundable once you choose to close the account with the issuer.
Credit card holders need to pay an annual fee, but those fees are fairly low. Depending on which platinum card you choose, fees will range between $29 and $49 per year.
The Cons
Because this is a secured card, the APR rates are quite high. Keep in mind that this is a card designed for people without an option to get an unsecured card. If you have credit scores that can support a request for an unsecured card, request one of those instead.
Secured cards don’t offer the perks of unsecured cards. So things like transferring a balance or introductory APRs won’t apply. Most secured cards also don’t offer any type of rewards programs, whether they’re cash back or points-style rewards.
The payments on this card can go into a ten-day hold status while the issuer processes it. Keep in mind, this means that you won’t have access to that credit limit until the issuer approves your payment.
Online reviews of the card are mixed. Some people who have requested the card have complained that it’s taken several weeks for them to receive it. Others have had poor experiences with the customer service department or have had difficulty canceling their accounts.
The Verdict on the First Progress Platinum Secured Card
For those that need to repair or build credit, the First Progress Platinum Secured card is a good option. The annual fees and APRs are reasonable, for a secured credit card.
It’s recommended that you don’t carry a monthly balance, and as soon as your credit score improves, move to an unsecured card that will give you a better annual fee, APR, and could include some rewards program.
Bonsai Finance exists to help you find the credit card, loan, or insurance policy that gives you the best possible “deal,” regardless of your past credit history and without the need for a credit check.
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