The Citi Secured Mastercard is best for consumers with a limited credit history who need to build credit but can’t get approved for a traditional credit card, and who don’t need access to more than $2,500 in secured credit. Ideally, someone who applies for this card will use it to improve their credit score, so they can transition to an unsecured credit card with better rates and perks.
No annual fee
Easy qualification requirements
Reports to all three credit bureaus
Requires a bank account
Hefty penalty rate for late payers
Security deposit constraints
- No annual fee: It is common for secured cards to charge annual fees. Some even charge fees of up to $50 per year—but not this one. With the money saved you might be able to leave a bigger deposit or pay off other bills.
- Easy qualification requirements: As with all secured credit cards, you won’t need to have excellent credit to qualify, although you must not have any bankruptcies on your record within the past two years.
- Reports to all three credit bureaus: The Citi Secured Mastercard will report your payment and usage history to all three credit reporting agencies—Experian, Equifax, and TransUnion. If you use credit responsibly and make all your payments early or on time, this can help you boost your credit score.
Secured credit card fees can hit you twice—first in the wallet and next in the credit score. That’s because those fees are added to your account balance, which reduces your total available credit. You want to use as little of your available credit as possible—definitely less than 30%—to avoid risk to your credit score.
- Requires a bank account: To apply online you’ll need a bank account—or access to one—to transfer the security deposit to Citibank. If not, you’ll need to visit a Citibank branch. By contrast, some secured cards will allow you to fund the deposit via check sent by mail.
- Hefty penalty for late payers: If you’re late paying your bill or bounce a payment, your interest rate could rise to up to 29.99%. Many secured cards don’t charge a penalty rate at all.
- Security deposit constraints: Some cards allow you to deposit up to $10,000. Citi limits you to $2500 as a maximum deposit. Low maximums can be a challenge if you need access to funds or want to keep your credit utilization ratio low, month-to-month.
How to Get the Most out of This Card
This secured card should be used as a stepping stone of sorts to a more traditional credit card, through building a positive credit history and credit score. Luckily, this card gives you free access to your credit score, so you can watch your score improve over time.
One of the biggest components of a credit score is payment history, which you’ll build by paying your card bill on time, every time.
Your utilization ratio is the second most important piece of the credit equation. You should only be using a percentage of the credit available to you, preferably 30% or less. To find this number, multiply your deposit by 30 cents. With this card, if you have a $2500 deposit, aim to keep your charges and balance under $750 per month.
Remember that your credit card can report your balance to credit agencies at any point during the month, not necessarily at month’s end.
If you’ve recently moved to the U.S., building a positive U.S. credit history can be assisted by using a secured credit card. However, when traveling, watch out for foreign exchange fees on this card, which can add 3% to every transaction that takes place outside of the U.S.
In J.D. Power’s 2020 Credit Card Satisfaction Study, Citi is ranked as sixth out of 11 national card issuers. Its score of 801 is nine points below the average.
The Citi Secured Mastercard gives you access to your FICO credit score for free on your credit card statement, making it easier to monitor your progress over time. You can also set your own payment due date, which may be helpful when managing finances.
Citi offers basic protection against fraud for customers, including account monitoring and zero liability for fraudulent purchases. Citi credit cards also come with Citi Identity Theft Solutions, which can help you identify and remove fraudulent accounts and information from your credit reports once fraud has taken place.
Fees to Watch out For
While the Citi Secured Mastercard doesn’t charge annual or account maintenance fees, you’ll want to be careful if you plan to use your credit card abroad. You’ll pay a 3% foreign transaction fee on every purchase you make outside the United States. You should also pay bills on time and with adequate funding, or you could face a steep 29.99% penalty interest rate.