Citibank Secured Credit Card - Credit Repair Review

If you need to rebuild your credit then one of the quickest ways of doing this is by using a secured credit card. The only problem is that most charge you high interest rates for the privilege of using them and if your short on cash that is the last thing you want. So, is the Citibank secured credit card any different?

What Is A Secured Credit Card

Before I start I will give you the low down on what exactly is a secured credit card. A secured credit card is secured using a certificate of deposit (CD). The deposit amount can range from as little as 10% or 100% on the line of credit being applied for. This deposit amount is used as security if the card holder defaults or fails to settle the outstanding payments.

A secured card is an option for people who need to improve their credit history. The downside of this  type of credit card is the accompanying high fees and the fact that you have to provide your own cash deposit to create the credit limit.

Citibank Secured Credit Card Review

The Costs

Key Facts  Pros: Co-signer not required No minimum income Lower than average APR Good for credit repair  Cons: Annual fees Own cash for deposit $200 minimum deposit

As pointed out many secured credit providers charge many fees that include set up and annual fees. The Citibank card has an annual fee of $29. Although not one of the highest annual fees it is not one of the cheapest either.

There are other fees that you can incur as follows:

• Balance transfer charge that is based on 3% of the balance being transferred.
• Late payments charges ranging from $15 to as much as $39.
• Exceeding credit limit charge of $39.

Interest Rates

On purchases the Citicorp secured credit card charges 18.24% and a whopping 25.24% on cash advances.

Rewards

None.

The Application Process

With the Citibank secured credit card application form the terms and conditions state that you need to include a check for the deposit. The minimum deposit is $200 whereas the maximum amount you can have is $5000. The security deposit amount will be paid  into a certificate of deposit account.  For example, if you write a check for $3000 then, the $3000 becomes your credit limit.

The money in the CD account will actually earn interest. CD rates do not amount to much however, every little bit helps. The security deposit cannot be used for cash purchases so beware or else you will end up paying hefty interest rate charges.

The billing cycle has a 23 day cut off period where you need to settle the outstanding amount. If you settle the account within that 23 day cut off deadline you will not incur any interest charges. You can pay the minimum amount however, this is only going to cost you and your better paying the balance in full especially, if you are want to improve your credit score.

If you have used Citigroup secured credit card responsibly, and built up a good credit rating you could be eligible for the Citi® Platinum Select® MasterCard®. This is an unsecured card which means you do not have to pay for your own deposit.

Qualification Requirements

To qualify for the Citibank secured credit card you need to be a citizen of the US and a minimum age of 18 years. As with most credit cards you will have to provide proof of your identity. This will involve providing photocopies of your ID photo card. Non US citizens will have to provide a copy of their passport.

As well as your identity you will also need to prove your address when you apply. To do this you will need to provide a copy of drivers licence if you are a US citizen. Non US citizens can either provide a copy of a utility bill or bank statement.

Conclusion

Although the annual fee is not the cheapest this is still a decent card for credit repair purposes. However, if this card is not used responsibly then the other fees are going to hurt you financially especially the credit history you are trying to rebuild.

The Citibank secured card gives you the opportunity to improve your credit rating but it is up to you use it responsibly. You can do this by only buying items that you can afford to pay back on a monthly basis. You can pay the minimum payments but with a bad credit score you should be paying off the balances in full.

You need to use it on a monthly basis to build your credit as fast as you can. As long as your you manage your finances and keep paying the bills on time your payment history will be picked up by the 3 major credit bureaus and recorded on your credit report. This is the best way to increase your credit score.

The APR of 18.24% is not high compared to other cards and for that reason you could use it to carry a balance over each month. But you will need to make sure you have enough savings to pay the extra interest charges. The Citibank secured credit card has a good credit limit as long as you have the available collateral.

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