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Having poor credit can be expensive, but rebuilding your credit history doesn't have to be. With the Citi® Secured Mastercard®, you can work on establishing a positive payment history without the cost of an annual fee.
If you're looking for more value, though, be sure to compare the card with other secured card options, and avoid carrying a balance. Here's what you need to know about the Citi® Secured Mastercard® before you apply.
|Customer service contact info for Citibank|
1 (800) 374-9700
Citibank Customer Service
P.O. Box 6500
Sioux Falls, SD 57117
|Reports to all three major credit bureaus||Requires a security deposit|
|May offer to return your security deposit early||Not available if you have a recent bankruptcy|
|Doesn't charge an annual fee||Charges a high APR|
The Citi® Secured Mastercard® can be a great way to build credit from scratch or rebuild your credit history after you've made some missteps. The card doesn't charge an annual fee and reports all of your activity to the three national credit reporting agencies (Experian, TransUnion and Equifax).
There are, however, some things to keep in mind before you apply for the card. For starters, it doesn't offer rewards. Rewards are uncommon for secured credit cards, but there are alternative cards that do offer them.
Also, you'll need to provide a security deposit that's equal to your credit limit, which can range from $200 to $2,500.
Finally, the card charges a high annual percentage rate (APR). A high APR is to be expected for a secured credit card, but there are other secured card options available with much lower rates.
Rebuild Your Credit With Citi® Secured Mastercard®
To apply for the Citi® Secured Mastercard®, you'll need to submit your application online or at a Citibank branch—the bank doesn't offer phone applications.
To reduce risk to the issuer, your $200 to $2,500 deposit is counted as collateral against your use of the card—default on the card and the issuer keeps your deposit. Even with this 100% collateral, you'll still need to meet the card issuer's creditworthiness criteria—for example, you'll be automatically denied if you've had a bankruptcy in the past two years.
Your credit limit will be based on:
- Your annual salary and wages
- Other annual income
- Other debts listed on your credit report
This means even if you have the cash to secure a $2,500 credit limit, but Citi determines that your debt-to-income ratio is too high, you'll get a lower limit.
Once you've been approved for the card, your deposit will be placed in a holding account for 18 months and will not earn interest. While there are secured cards that put your deposit into an interest-bearing account, the amount you'd likely earn would be negligible.
Citi states that it may decide to return your deposit early. If not, it must stay in the holding account for the full 18 months. This means if you want to close the account before then, you may not get your deposit back immediately.
Also, keep in mind that if you default on your debt or choose not to renew the holding account after the initial 18-month period, Citi will use some or all of your deposit to pay off your balance and close the account.
Use It Like a Normal Credit Card
Once Citi receives your deposit and you're clear to use the card, it'll function like any other credit card. Use the card regularly and pay your bill on time and in full each month to build a positive payment history on the account.
As you use your new card, here are some things to keep in mind:
- Credit utilization: Your credit utilization rate—your card's balance relative to its credit limit—is an important factor in your credit score. While many credit experts recommend keeping your overall utilization below 30%, lower is ideal. This means that if you have a credit limit of just a few hundred dollars, you may need to make multiple payments throughout the month to keep your balance low.
- The card's APR is high: This card's interest rate isn't out of line with most secured credit cards, but it's still high. It's best to pay your balance in full each month to avoid interest charges. If you don't think you can manage that, consider a card with a lower APR, such as the First Progress Platinum Prestige Mastercard Secured Credit Card.
- You won't earn rewards: If working on your credit is your top priority, you may not care about earning rewards. But if rewards plus the chance to get your deposit back without closing your account sound appealing, consider the Discover it® Secured card. That card offers 2% cash back on restaurant and gas station purchases up to $1,000 each quarter. You will earn an unlimited 1% back on everything else, plus Discover will match all the cash back you earn during the first year.
As you use the card regularly, you can manage your account online or through Citi's mobile app. The app has several features, including:
- Citi Mobile Snapshot, which allows you to view key account information without needing to log in.
- Citi Quick Lock, which makes it possible to lock your card if it's lost or stolen, and unlock it when you've found it again.
- Card replacement, which creates a request for a new card if yours is lost, stolen or damaged.
- Transaction disputes if you spot a bogus transaction on your statement.
- General account management and payments.
Consider the Rates and Fees
The card's standard APR is much higher than the average credit card interest rate. That's not out of line with industry standards for secured credit cards, but it means it's a good idea to stay on top of your monthly payments.
To avoid paying interest on your card, don't carry a balance month to month. Make smaller payments throughout the month, or consider setting up automatic payments that take care of the card's full balance at the end of your billing period.
This card is not a great choice if you're planning to travel abroad. The Citi® Secured Mastercard® charges a 3% foreign transaction fee on international purchases, which sounds small but can add up over the course of your trip. If you're looking for a secured credit card without a foreign transaction fee, look at the Capital One® Secured Mastercard®.
|Purchase APR: 24.24%* (Variable)||Grace period: At least 23 days after the close of each billing cycle; does not apply to cash advances or balance transfers|
|Transfer APR: 24.24%* (Variable)||Annual fee: $0|
|Cash advance APR: 26.99% (Variable)||Balance transfer fee: 3% of the transfer amount or $5, whichever is greater|
|Minimum interest charge: $0.50||Cash advance fee: 5% of the cash advance or $10, whichever is greater|
|Foreign transaction fee: 3%|
|Late payment fee: Up to $39|
|Returned payment fee: Up to $39|
With the Citi® Secured Mastercard®, there are no fees for adding an authorized user to your account.
Keep in mind, though, that you will be responsible for any charges an authorized user makes using their card. In addition to using the card to make purchases, authorized users also can:
- Report lost or stolen cards
- Request copies of account statements
- Dispute transactions
- Make payments
- Change the account billing address
- Request refund checks
- Get access to transaction histories and other account information
Is This Card Right for You?
If you're looking for a no-frills secured credit card to help you improve your credit, the Citi® Secured Mastercard® can be a solid choice. The card has no annual fee, and you can easily avoid interest charges by paying your bill in full every month, making it possible to build credit without any costs.
Just keep in mind that if you get the card, you're tying up your deposit money for at least 18 months.
As with any credit card, though, it's important to take some time and shop around. You can find other secured credit cards that offer lower interest rates, cash back rewards and the chance to get your deposit money back early.
Before you apply for the Citi® Secured Mastercard®, take some time to compare alternatives to ensure you pick the right one for your credit profile, needs and preferences.