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The nRewards Secured card from Navy Federal Credit Union offers this rare combination: It pays credit card rewards to those who are also working on rebuilding their credit. That’s something you’ll find with just a handful of secured credit cards.
If you’re looking for a secured credit card it typically means one of two things:
- You have a poor credit history and don’t qualify for an unsecured card.
- You don’t have enough credit history to qualify for an unsecured card.
What sets the nRewards Secured card apart is its lack of fees coupled with its award-earning potential. For every $1 spent, you’ll earn 1 point, worth about 1 cent when you redeem it for merchandise or gift cards through Navy Federal’s portal.
It’s not uncommon to see secured cards that charge an annual fee, a processing fee or sometimes a combination of both. The nRewards card skips these charges. Navy Federal Members can open an account with only a security deposit, starting at a minimum of $500, and using that amount as the line of credit.
Lower fees are an important benefit because any upfront cost you have to pay will instantly reduce your purchasing power and chip away at your credit utilization ratio, which can negatively impact your score.
For example, if you put down $500 to get a secured card from another issuer, but you’re charged a $50 annual fee and a $75 one-time processing fee, you will only have $375 worth of credit left.
The no-fee structure of the nRewards card will give you a better chance of using your credit line responsibly so you can build up a stronger credit profile over time. The card also doesn’t charge foreign transaction fees — another plus, especially for Navy Federal members in the military who are stationed overseas.
Perhaps best of all, this card also has one of the lowest APR rate ranges we’ve seen for a secured card. The variable APR ranges from 9.99% to 18.0%, depending on what you qualify for, meaning you could be charged less interest than on many unsecured cards.
But you need to pay your bill on time or you’ll be subject to a variable penalty APR of 18.0%, which will apply until you make at least six consecutive monthly payments on time, plus a late fee of up to $20.
Keep in mind that only credit union members can apply for this card. Eligibility is restricted to those who serve or have served in the military or are an immediate family member of someone in the military.
If you meet that criteria, the nRewards card is an outstanding choice for a secured credit card.
Who should get this card
Anyone who qualifies for Navy Federal Credit Union and wants a fee-free, low-interest secured card.
Fees and APR
- The variable APR for purchases and balances transfers is 9.99% to 18.0% based on creditworthiness.
- Minimum security deposit is $500.
- There are no annual fees, balance transfer fees or foreign transaction fees.
- A penalty of 18.0% may apply if you miss a payment. You’ll also be charged a $20 late fee.
Extras, perks and using points
Card owners have access to Visa discount coupons.
Rewards expire four years from the month in which they were earned. Earnings can only be redeemed for gift cards or merchandise through the Navy Federal portal.
How this card compares
The Discover it Secured Card packs a powerful punch of attributes not typically seen in secured cards. For starters, you earn cash back with the card—something no other secured card on the market offers. And it will double your cash back at the end of the first year. The bank will also review your account, starting at eight months to see if you qualify to graduate to an unsecured card.
The Credit One Bank Platinum Card offers some rewards, and offers decent APRs for a secured card. A major drawback of the Credit One Bank Platinum Card is that you won’t know the exact terms of your offer until you’ve applied.
The two reasons you may want to apply for the OpenSky Secured Visa Credit Card is if you don’t own a checking account, but still want access to a credit card, or if you’re looking for a secured card with a decent annual percentage rate.
There’s a very narrow band of consumers this applies to, we imagine.
If you or a loved one will be deployed soon, the USAA Secured Card American Express could prove a real help. Think about applying for this card before you head overseas so you can take advantage of the generous benefit offered active-duty military personnel.
The card has a special low APR for deployed members of the U.S. armed forces — much lower than standard credit card interest rates — and, unlike most other unsecured cards, offers travel and auto protections and extended warranty coverage.
Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines, or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.