BOFA Secured Card - Why Apply?

[Anonymous]

I think the real question is, why apply for such a bad secured card? 

$39 annual fee -- the highest of secured cards at any major financial instituion including credit unions. Many credit union secured cards don't have an annual fee. Even banks like Citi and Wells Fargo offer secured cards with an annual fee around $25.

$37 late payment fee. Many credit unions charge $25 max. I'm not even sure how Bank of America gets away with that, as the CARD act specfically says "$25 late fee maximum for the first late payment over a six month period."  Bank of America's Secured Credit Card T&C's say $37 for any missed or late payment. 

Standard APR 20.49%* variable. That APR is pretty high, but not the highest of secured cards I've ever seen. Still, you could've done much better. My secured card through my credit union with a rewards program and no annual fee was 12.75% and my score was 620. The max APR you can get at my credit union is 17.99% and that's if your score is in the low 500's. Which brings me to my final point...

No rewards program. There are secured cards out there from credit unions with a rewards program, and also Sun Trust  and Discover have a secured card with rewards program. 

Not to sound too harsh or anything... But bad, bad pick on a secured credit card. 

(Mod Edit - We have started a new thread for this topic, as the response did not directly relate to the question posted in the original thread.   We have updated the thread topic and made minor grammatical changes to make this a standalone topic; this may be edited by OP, if desired --SE),

[UncleB]

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@Anonymous wrote:

I think the real question is, why did you apply for such a bad secured card? 

$39 annual fee -- the highest of secured cards at any major financial instituion including credit unions. Many credit union secured cards don't have an annual fee. Even banks like Citi and Wells Fargo offer secured cards with an annual fee around $25.

$37 late payment fee. Many credit unions charge $25 max. I'm not even sure how Bank of America gets away with that, as the CARD act specfically says "$25 late fee maximum for the first late payment over a six month period."  Bank of America's Secured Credit Card T&C's say $37 for any missed or late payment. 

Standard APR 20.49%* variable. That APR is pretty high, but not the highest of secured cards I've ever seen. Still, you could've done much better. My secured card through my credit union with a rewards program and no annual fee was 12.75% and my score was 620. The max APR you can get at my credit union is 17.99% and that's if your score is in the low 500's. Which brings me to my final point...

No rewards program. There are secured cards out there from credit unions with a rewards program, and also Sun Trust  and Discover have a secured card with rewards program. 

Not to sound too harsh or anything... But bad, bad pick on a secured credit card. You should've asked for opinions here first. 

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The BoA secured card is actually a good choice for many people, specifically people who are wanting to get their foot in the door with BoA since the card is well-known for unsecuring down the road.

Edited to add:  Baller4life has mentioned how she started off with a BoA secured card and within two years it's become a $20k unsecured card:  http://ficoforums.myfico.com/t5/Credit-Card-Applications/BOA-Declined/m-p/4685598#M131339

I'll also mention that the card can unsecure very quickly for some people, sometimes in only five or six months. 

[Anonymous]

I was also under the impression that it had a rewards program attached even though it is not disclosed on the website.

[Friarchuck]

There are also some ways to obtain a BofA secured card other than cold-applying.  I've had my personal checking and savings with them for some years now, and when I first went to get a secured card (in person at a branch), they offered me one with the security of having a few grand in my savings account.  They didn't put a hold on any of the funds or anything like I've heard some other banks do.  Within six months they had upped it to $2000, and a couple months later I had a Cash Rewards Visa that had the same open date as the secured card which remains my oldest open account, and on which I have earned several hundred dollars in rewards.  All in all, I am very happy with my experience with my BofA secured card and I would definitely recommend the path that I took to others that have accounts with them.

You are also speaking from a place of knowledge of many credit card products and differences between lenders and which options are available.  Secured cards are for people either starting out on their credit or for those who are rebuilding.  In the first scenario, assuming they have similar knowledge to yours is ridiculous, and most newbies are just happy to have their first card.  In the second scenario, some of the options you listed may be unavailable for any number of reasons.  In any case, the point of a secured card is to report positive payment history to the credit bureaus for the purposes of strengthening your credit profile and score, which the BofA secured card does admirably.  While I don't think BofA needs defense from a lowly customer like me, I think posts designed exclusively to bash one product or the other are a waste of time and ultimately don't serve any important purpose when the product in question fulfills its primary purpose.

[Anonymous]

Late fee shouldn't matter for obvious reasons.  The other things aren't a big deal as it's designed for people to get their feet off the ground and not meant to be a long term card.

[Anonymous]

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@Friarchuck wrote:

There are also some ways to obtain a BofA secured card other than cold-applying.  I've had my personal checking and savings with them for some years now, and when I first went to get a secured card (in person at a branch), they offered me one with the security of having a few grand in my savings account.  They didn't put a hold on any of the funds or anything like I've heard some other banks do.  Within six months they had upped it to $2000, and a couple months later I had a Cash Rewards Visa that had the same open date as the secured card which remains my oldest open account, and on which I have earned several hundred dollars in rewards.  All in all, I am very happy with my experience with my BofA secured card and I would definitely recommend the path that I took to others that have accounts with them.

You are also speaking from a place of knowledge of many credit card products and differences between lenders and which options are available.  Secured cards are for people either starting out on their credit or for those who are rebuilding.  In the first scenario, assuming they have similar knowledge to yours is ridiculous, and most newbies are just happy to have their first card.  In the second scenario, some of the options you listed may be unavailable for any number of reasons.  In any case, the point of a secured card is to report positive payment history to the credit bureaus for the purposes of strengthening your credit profile and score, which the BofA secured card does admirably.  While I don't think BofA needs defense from a lowly customer like me, I think posts designed exclusively to bash one product or the other are a waste of time and ultimately don't serve any important purpose when the product in question fulfills its primary purpose.

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The post was edited and took my original point away.

If you could get a no annual fee secured card with a lower APR, and that included a rewards program, no balance transfer fee, and no foreign transaction fee, wouldn't you choose it over what Bank of America offers? Besides, it's BoA...  Known for mediocre customer service.Also explained how the OP should've asked us first before applying, but course that was deleted too.

[baller4life]

Well my BOA had af removed, 3-2-1 cash rewards program added and unsecured in 6 months. So for me it wasn't a "bad bad choice". It was my second 5 figure credit card limit and started out a $300 secured 6 months prior. But, yes there are lower apr options such a State Department Federal CU. However, I don't believe it unsecures.

[Friarchuck]

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@Anonymous wrote:

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@Friarchuck wrote:

There are also some ways to obtain a BofA secured card other than cold-applying.  I've had my personal checking and savings with them for some years now, and when I first went to get a secured card (in person at a branch), they offered me one with the security of having a few grand in my savings account.  They didn't put a hold on any of the funds or anything like I've heard some other banks do.  Within six months they had upped it to $2000, and a couple months later I had a Cash Rewards Visa that had the same open date as the secured card which remains my oldest open account, and on which I have earned several hundred dollars in rewards.  All in all, I am very happy with my experience with my BofA secured card and I would definitely recommend the path that I took to others that have accounts with them.

You are also speaking from a place of knowledge of many credit card products and differences between lenders and which options are available.  Secured cards are for people either starting out on their credit or for those who are rebuilding.  In the first scenario, assuming they have similar knowledge to yours is ridiculous, and most newbies are just happy to have their first card.  In the second scenario, some of the options you listed may be unavailable for any number of reasons.  In any case, the point of a secured card is to report positive payment history to the credit bureaus for the purposes of strengthening your credit profile and score, which the BofA secured card does admirably.  While I don't think BofA needs defense from a lowly customer like me, I think posts designed exclusively to bash one product or the other are a waste of time and ultimately don't serve any important purpose when the product in question fulfills its primary purpose.

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The post was edited and took my original point away.

If you could get a no annual fee secured card with a lower APR, and that included a rewards program, no balance transfer fee, and no foreign transaction fee, wouldn't you choose it over what Bank of America offers? Besides, it's BoA...  Known for mediocre customer service.

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All other things being equal, sure.  As people who are educated not only on the proper ways to handle credit card accounts, but also on the variety of different secured products out there, people like you and I and others on this forum would surely take the time to compare and contrast the options available to us.  My post was meant to illustrate the vast proportion of the credit using general public that are not like the people that read and contribute to these forums, and thus have no need or desire to weigh each category of benefits against each other when their only goal is to have a card with good payment history in order to move up in the "credit world".   All the things you mentioned are surely great benefits to have in a secured card, but when the path of least resistance is to go with a bank you use, trust, or for whatever reason were recommended by an acquaintance, it makes sense to go with the BofA card.  If the card only reported to one of the bureaus but not others, then sure it would be a lousy product and not adequate for the purpose many people want it for, but it is a perfectly reasonable card for a beginner.

[Anonymous]

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@baller4life wrote:
Well my BOA had af removed, 3-2-1 cash rewards program added and unsecured in 6 months. So for me it wasn't a "bad bad choice". It was my second 5 figure credit card limit and started out a $300 secured 6 months prior. But, yes there are lower apr options such a State Department Federal CU. However, I don't believe it unsecures.

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I used to have a SDFCU secured card. No annual fee, 7.24% APR, one point per dollar spent. I don't remember if it unsecures though.

[Anonymous]

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@Friarchuck wrote:

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@Anonymous wrote:

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@Friarchuck wrote:

There are also some ways to obtain a BofA secured card other than cold-applying.  I've had my personal checking and savings with them for some years now, and when I first went to get a secured card (in person at a branch), they offered me one with the security of having a few grand in my savings account.  They didn't put a hold on any of the funds or anything like I've heard some other banks do.  Within six months they had upped it to $2000, and a couple months later I had a Cash Rewards Visa that had the same open date as the secured card which remains my oldest open account, and on which I have earned several hundred dollars in rewards.  All in all, I am very happy with my experience with my BofA secured card and I would definitely recommend the path that I took to others that have accounts with them.

You are also speaking from a place of knowledge of many credit card products and differences between lenders and which options are available.  Secured cards are for people either starting out on their credit or for those who are rebuilding.  In the first scenario, assuming they have similar knowledge to yours is ridiculous, and most newbies are just happy to have their first card.  In the second scenario, some of the options you listed may be unavailable for any number of reasons.  In any case, the point of a secured card is to report positive payment history to the credit bureaus for the purposes of strengthening your credit profile and score, which the BofA secured card does admirably.  While I don't think BofA needs defense from a lowly customer like me, I think posts designed exclusively to bash one product or the other are a waste of time and ultimately don't serve any important purpose when the product in question fulfills its primary purpose.

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The post was edited and took my original point away.

If you could get a no annual fee secured card with a lower APR, and that included a rewards program, no balance transfer fee, and no foreign transaction fee, wouldn't you choose it over what Bank of America offers? Besides, it's BoA...  Known for mediocre customer service.

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All other things being equal, sure.  As people who are educated not only on the proper ways to handle credit card accounts, but also on the variety of different secured products out there, people like you and I and others on this forum would surely take the time to compare and contrast the options available to us.  My post was meant to illustrate the vast proportion of the credit using general public that are not like the people that read and contribute to these forums, and thus have no need or desire to weigh each category of benefits against each other when their only goal is to have a card with good payment history in order to move up in the "credit world".   All the things you mentioned are surely great benefits to have in a secured card, but when the path of least resistance is to go with a bank you use, trust, or for whatever reason were recommended by an acquaintance, it makes sense to go with the BofA card.  If the card only reported to one of the bureaus but not others, then sure it would be a lousy product and not adequate for the purpose many people want it for, but it is a perfectly reasonable card for a beginner.

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I was orginally speaking to a forum poster here, but the two comments on the top were moved by the mods into this new thread.