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Unless you want to limit the number of open credit accounts, and eventually plan to get a Citibank credit card, we do not recommend getting the Citi® Secured Mastercard®. Most individuals can do a lot better – both in terms of what tools/rewards they can get and what happens with their security deposit. The Capital One® Secured Mastercard® may serve as a better alternative for most individuals.
Review: Is the Citi® Secured Mastercard® A Good Way To Build Credit?
The Citi® Secured Mastercard® is pretty bare-bones, even as far as secured credit cards go. Some of our favorite cards of this type give users rewards on their spending, or unlock features that can aid in the process of building, or re-building, one’s credit history. For instance, the Capital One® Secured Mastercard® gives users access to track and check their credit score.
If you’re looking for quick access to a high credit limit (CL), the Citi® Secured Mastercard® is also not the way to go. The CL you get with the card is directly proportional to the amount of money you put down in the form of a security deposit (between $200 and $2,500). Once again, a card like the Capital One® Secured Mastercard® will at least give their consumers the ability to deposit smaller amounts of money, in favor of a larger credit line – this is especially beneficial to individuals who are in desperate need of credit, but their low FICO scores are preventing them from getting approval for a loan or half-decent credit line.
As we’ve come to expect from secured credit cards, the APR on the Citi® Secured Mastercard® is very high 24.49%* (Variable). This makes a card like this particularly bad for individuals who don’t pay off their bill fully, at the end of each month. If you want a secured card with a lower interest rate, consider the State Department EMV Savings Secured Visa Platinum Card, which comes with a 6.99% APR.
Bottom line: Whether you’re looking to build up your credit history, or simply in need of credit, there are a number of better options that may be available to you.
Citi® Secured Mastercard® Benefits & Features
The main benefit of the Citi® Secured Mastercard® is the fact that it is a credit card you can get, even if you're new to credit. Outside of this, the card does not come with any bells and whistles. The card has no annual fee, which is rare among secured cards.
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How Does the Citi® Secured Mastercard® Work?
When you first apply for the Citi® Secured Mastercard®, you must submit a security deposit – a minimum of $200, up to a maximum of $2,500. If you meet the minimum qualifications, you will receive a credit card whose limit is equal to the amount of money you deposited.
Generally speaking, you should put down as much of a security deposit as you can reasonably afford – even if you don’t plan on using that much credit. The reasoning behind this originates from optimizing the way you build credit. You should ideally be using less than 30% of your entire credit limit, if you wish you build credit. Banks and financial institutions view this as you demonstrating financial stability – that is you don’t rely on credit to live day-to-day.
At the end of each billing cycle, Citi will send updates about your account to the credit bureaus. Assuming you are doing everything well – paying your bills on time, keeping low credit utilization, etc. – these updates are what, over time, will build your credit score.
What Happens to My Security Deposit?
The money you put down as a security deposit for the Citi® Secured Mastercard® will be tied up in a collateral holding account, for a period of 18 months. The money in such an account will not earn any interest. This is in stark contrast to some other cards, such as the USAA Secured Card® Platinum Mastercard®, which deposits security deposits into a CD savings account – which collects compounding interest.
The fact that your deposit will not gather interest serves as another knock against the Citi® Secured Mastercard®. If you’re already committing to putting up a part of your savings in order to get credit, we recommend choosing to do so with a bank that can make it more worth your time. Look for secured credit cards that can turn your deposits into investments.
How Does the Citi® Secured Mastercard® Compare to Other Credit Cards?
It’s impossible to determine the value of the Citi® Secured Mastercard®, without the knowledge of what other options are available to individuals new credit. Below you’ll find profiles of some leading competitors to this card, to help you better determine if another card is better for you.
Citi® Secured Mastercard® vs Capital One® Secured Mastercard®
Capital One® Secured Mastercard® is one of the best credit cards for people with poor FICO scores. Consumers who use this card get access to tools such as free credit tracking – both online and on their monthly statements. Furthermore, the minimum security deposit on the Capital One® Secured Mastercard® is just $49 – this gets you an initial credit line of $200. If you deposit $200 (which is the minimum on the Citi® Secured Mastercard®) you will receive a credit line of $3,000. This is by far one of the best deposit-to-credit limit ratios we’ve seen on any secured credit card. Like the Citi® Secured Mastercard®, the Capital One® Secured Mastercard® also has no annual fee, which makes it less of a burden on your finances, when compared against most secured credit cards.
Citi® Secured Mastercard® vs State Department EMV Savings Secured Visa Platinum Card
The State Department EMV card is a fantastic choice for eligible consumers. In order to be able to apply for the card, you must either be a State Department employee, or a family member of one, or belong to the American Consumer Council (for which you can sign up for a one-time-fee of $15). As opposed to most secured credit cards, the State Department EMV Savings Secured Visa Platinum Card has a low APR (6.99%) and no annual fee. If you are going through tough financial times, and find yourself needing to carry a balance month-to-month, this credit card is the one that will end up costing you the least. Furthermore, the State Department card is also part of the Flexpoint Rewards program, which gives each of your purchases a 1% rewards rate.