The Digital Federal Credit Union Platinum Secured credit card has all the low numbers we like to see. Now, getting this card takes a little bit of work, but it’s well worth it.
Applying
First off, you need to qualify to join the Digital Federal Credit Union, which means you need to be a member of one of their 700+ participating organizations. Out of those, there are 9 that are easy to join – just make a small donation. For example, you could give $15 to the American Association of People with Diabetes, or $10 to Reach Out for Schools. (Although after you see the generous terms of this card, you just might be inspired to donate more! There’s the holiday spirit.)
Ok, Scrooge, maybe you don’t like the sound of paying money just to apply. But here’s the thing: that’s all you’re gonna pay, because this card carries no annual fee. For a secured credit card, that’s virtually unheard of. Other secured cards offered by major banks carry annual fees of $20-$40, not to mention all the secured cards that have annual fees of $75 to over $100 – but we don’t talk about those.
Plus, their FAQ seems to indicate that you can apply for the card first to determine if you qualify, and then join the bank.
High Security Deposit/Credit Limit
Moving on to the second hoop to jump through. As part of joining the Digital Federal Credit Union, you also need to set up a savings account with a minimum deposit of $5. This account will hold your security deposit for the card, which starts at a high minimum of $500. If you aren’t looking to put that much money away to build your credit, check out alternatives such as the Capital One Secured card, which starts at $49.
But if you are willing to put a big deposit away, you will enjoy earning .05% interest on it. In fact, depending on your credit score, you could qualify to deposit thousands of dollars, all the way up to $100,000! (That gives our other high-limit secured pick, the Wells Fargo card, a run for its money.) To be clear, this is a “fully secured” card, so your credit limit will be exactly equal to the security deposit. This is all terrific news for someone hoping to build credit fast, because high limits lower you credit utilization ratio, which serves to accelerate your credit recovery.
If you want to go ahead and open a checking account as well, you can arrange overdraft protection that will automatically charge excess withdrawals to your DFCU credit card.
Rates
The Digital Federal Credit Union Secured card sports an 11.50% APR, which is fairly low for a secured card. Of course, if you don’t carry a balance then APR doesn’t matter much, but a low rate is a nice thing to have. Plus, there are no fees or increased rates on cash advances and balance transfers. That is a difficult thing to find even with “normal” credit cards!
And get this: the Digital Federal Credit Union has extended a 1% cash back rate on purchases made between Thanksgiving and New Year’s Eve for all of their credit cards, including this secured card. That rate is tiny compared to typical rewards cards, but great for a bad-credit card. It’s sure to come in handy with all the holiday shopping around the corner. This is a perfect time to grab this card, so act fast.
Benefits
This secured credit card comes with fairly typical Visa benefits, including travel accident insurance, warranty extensions, car rental insurance, and other travel benefits. Although the card is issued by a credit union, you will still have access to online banking, including mobile access.
One question remains – does this card come with a graduation option? Well, not per se. If that’s something that is very important to you, check out the secured cards offered by some major banks, such as the Wells Fargo Secured card. But, Digital Federal Credit Union did indicate in their FAQ that you are welcome to apply to convert this card into a non-secured card. We suggest initiating that process only after you have shown responsible behavior for at least most of a year – that means no late payments or going over the credit limit, and preferably paying everything off in full every month.