USAA provides secured credit cards tailored primarily for individuals who are either new to credit or looking to rebuild their credit history. These cards require a cash deposit that acts as collateral and determines your credit limit. In 2024, USAA Secured Credit Card offers two main types of secured credit cards: the USAA Secured Card American Express and the USAA Secured Card Platinum Visa. Both cards are structured to assist in building or improving credit scores while offering unique benefits, especially for military members.
Key Features of USAA Secured Credit Card
Credit Building Capabilities: Both USAA secured cards report to the major credit bureaus. Regular, on-time payments can help improve your credit score, which is crucial for those with limited or damaged credit histories.
Security Deposit and Credit Limits: The credit limit on these cards is directly tied to a certificate of deposit (CD) that you must open with USAA. This deposit typically ranges from $250 to $5,000 and earns interest over time. Your credit limit is equivalent to the deposit amount, which ensures responsible spending relative to the deposited amount.
APR and Fees: The cards do carry an annual fee, which is modest compared to many other secured cards. The APR for these cards can vary based on your creditworthiness but is generally higher than unsecured cards, reflecting the risk profile of typical applicants.
Military-Specific Benefits: USAA offers several benefits for military members, including reduced APRs during deployment or active duty and rebates on finance charges for those who qualify through military campaigns.
Additional Card Benefits:
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- Travel and Shopping Protections: Both cards offer benefits such as worldwide rental car insurance, travel accident insurance, and extended warranty protections. These perks are quite competitive, especially for secured cards.
- No Foreign Transaction Fees: This is particularly beneficial for military personnel who may be stationed abroad or traveling internationally.
- Price Protection and Satisfaction Guarantees: If you find a lower price on a purchase or are dissatisfied with an item, USAA may reimburse you the difference, enhancing the shopping experience and providing additional peace of mind.
Rewards and Benefits
Unlike some secured cards, USAA Secured cards do not offer rewards like cash back or points on purchases. However, they compensate for this with a range of other benefits, particularly for military members. For instance, both cards provide reduced APRs to as low as 4% during deployment or PCS (Permanent Change of Station) and active duty. This can significantly alleviate financial stress during these periods
Furthermore, cardholders benefit from no foreign transaction fees, making these cards ideal for international use without incurring additional charges. The American Express version also offers a range of travel-related benefits, such as concierge services, worldwide travel insurance, and extended warranty protections, which are not typically found on secured cards.
Retail and Travel Perks
The card extends several travel and retail benefits:
- Worldwide Travel Accident and Baggage Delay Insurance: This insurance covers you and your family, ensuring peace of mind during travels.
- Price Protection and Extended Warranty: If an item you purchased is found at a lower price within 60 days, you can be reimbursed for the difference. Additionally, USAA doubles the manufacturer’s warranty, enhancing the value of your purchases.
Comparison with Other Secured Cards
While the USAA Secured Credit Cards offer competitive features, especially for military personnel, they are not alone in the market. When considering a secured card, it’s crucial to compare these features against others available, particularly looking at fees, interest rates, and the credit-building potential of each card.
Upgrading and Transitioning to Unsecured Cards
One of the significant changes coming in August 2024 is the introduction of an automatic review process for upgrading to unsecured cards. Periodically, USAA will assess your credit history and other factors to determine if you qualify for an upgrade to an unsecured card, which can be a significant step forward in your credit journey.
Conclusion
The USAA Secured Credit Cards are valuable tools for those looking to establish or rebuild their credit, particularly for members of the military who can benefit from the additional tailored perks. While they do not offer rewards such as cash back or points, the primary purpose of these cards is credit improvement, coupled with a set of benefits that are not commonly found in secured cards.
These cards represent a prudent choice for those who are mindful of building a strong credit foundation while enjoying some of the additional protections and benefits offered by USAA.
FAQs about USAA Secured Credit Card
How can I qualify for a USAA secured credit card?
To qualify, you typically need to provide a cash deposit which acts as collateral and sets your credit limit. This card is especially beneficial for individuals with poor or no credit history, aiming to build or improve their credit score.
What are the benefits of the USAA Secured Credit Card for military members?
USAA offers several benefits tailored for military personnel, such as reduced APRs during deployment or active duty and potential rebates on finance and interest charges for those involved in military campaigns. These features significantly alleviate financial stress for service members during active periods.
Can the security deposit be refunded?
Yes, the security deposit can be refunded once the certificate of deposit (CD) that holds your security deposit matures, assuming responsible use of the card. This feature makes the card a less risky option for building credit.
Does the USAA secured credit card help build credit?
Yes, responsible use of the USAA secured credit card, like maintaining low balances and making payments on time, is reported to the major credit bureaus and can positively affect your credit score. The card emphasizes timely payments and low credit utilization to help boost your credit over time.
Are there any transaction fees with the USAA secured credit card?
One of the attractive features of the USAA secured credit cards is the absence of foreign transaction fees, making them a good option for military members who travel or are stationed abroad.
What happens if I improve my credit score while using a USAA secured card?
USAA periodically reviews accounts to assess if cardholders qualify for an upgrade to an unsecured card based on their credit improvement and overall account management. This process can help transition to better credit card products without a security deposit.