The Citibank secured credit card, which is more commonly known as the Citi Secured MasterCard, may be a good option for you if you're looking to rebuild your credit. You can open one even if you have some negative marks on your credit report because you use a certificate of deposit as collateral. This interest-bearing certificate can have a balance of $200 to $25,000, and your credit limit is equal to the amount you have on deposit, up to $5,000. Using this method, Citibank does not have to assume any risk. It knows that you have the money to repay any balance you owe.
Features of the Citibank Secured Credit Card
This credit card doesn't require a cosigner or have any income requirements, and you get many of the features of a regular Citibank card. These include:
- Purchase Protection - In most cases, you can get items that are stolen or accidentally damaged replaced if you buy them using your cards. This is valid for the first 90 days after you make the purchase.
- Zero Liability - You aren't responsible for unauthorized charges if someone steals your credit card number.
- Car Rental Insurance - If you rent a car and don't use the rental company's collision policy, you're covered by Citibank's rental insurance. Note that this is only true if you use your card to pay for the car rental.
You can also sign up for PayPass if you so choose. This innovative product lets you make charges even when you don't have your card on you. Simply use your PayPass, which you can attach to your keychain, by tapping it on a designated reader. You may not even have to sign anything, depending on the amount you spend.
Additional Details
As of July 2010, this card had a variable rate of 12.24% APR and an annual fee of $29. You have a 20 day grace period in which you do not have to pay finance charges on purchases if you pay your balance in full each month. If you're careful with your spending and don't pay late or go over your limit for a period of 18 months, you may find yourself eligible for a regular Citibank card. You could also notice a significant improvement in your credit rating, as long as you keep up on your other bills as well.
A Word of Caution
Even though this is a secured credit card, it can still negatively impact your credit if you don't manage your account properly. This card has a default interest rate that is substantially higher than its regular rate, so you need to be careful that you don't miss payments. Also, even though you have your Certificate Deposit as collateral, that doesn't mean that Citibank can't ultimately send your account to a collections agency.
