Secured credit cards harder to get
In general, credit card marketing is down, "but it's further exacerbated in the subprime space because they are in this credit crunch trying to distance themselves in their portfolios from that subprime space," says Curtis Arnold, the founder CardRatings.com and author of "How You can Profit from Credit Cards." He says issuers are focusing more on acquiring prime borrowers.
He thinks secured cards will take "an even more prominent role going forward" and may offer the only credit card option for many people if credit card legislation drives issuers away from offering subprime cards. Already, new credit card rules were passed in December that will limit the fees applied during the first year after issuance.
As for consumer demand, Credit.com Credit Expert Emily Peters says her company, which generates leads for credit cards, saw a 27 percent increase in clicks on secured card products in the fourth quarter of 2008, compared to the previous year.
Hunting for a good secured cardIf your credit is poor or limited, you can still build it back up with a secured card, even if you're not getting any offers. Search online or check with local banks or credit unions and compare available offers.
A sampling of secured cards offered by major credit card issuers
- Bank of America Secured Visa Credit Card. It has a $29 annual fee and a variable interest rate, currently at 14.24 percent. The minimum deposit is $300.
- Citi Secured MasterCard. It charges a $29 annual fee and a variable rate, currently at 13.24 percent. Cardholders can upgrade to an unsecured Citi Platinum Select credit card after 18 months. Consumers deposit a minimum of $200 into a CD, which will earn interest. An early-withdrawal fee applies if the account is closed before 18 months pass.
- Wells Fargo Secured Visa Card. The annual fee is $18, and the variable APR is 17.99 percent. Consumers must pony up a minimum of $300. For a yearly fee of $19, cardholders can add a rewards component to the card. Customers may be eligible to upgrade to an unsecured account after 12 months.
- Orchard Bank Secured MasterCard. This card, issued by HSBC, charges a variable APR of 7.9 percent and waives the $35 annual fee the first year. The minimum deposit is $200, which will earn interest.
- U.S. Bank Secured Visa Credit Card. After 12 months, cardholders can upgrade to an unsecured product. Minimum deposit is $300. The annual fee comes to $35 and the variable interest rate is 18.99 percent.