In the credit card universe, Bank of America is perhaps the most underrated. Despite being the 3rd largest credit card issuer in the United States of America, and bearing a really cool name, they are not often known for generous credit card offers. I wish they did a better job promoting their products since some are quite exceptional. One such an example is the BankAmericard Cash Rewards secured credit card.
They say a hero needs a sidekick, and on my credit journey the secured card has been with me all along, though it has now graduated to a regular credit card. Though I am no longer using the card on a regular basis, for the 9 months when the card was my one and only, I pushed a lot of money through it and reaped quite some rewards. Bank of America has the card’s awesome features to thank.
As I mentioned in my previous post on options for credit builders, a secured credit card is a good way to start building credit. Unlike for a regular credit card where the limit is set based on your creditworthiness, you use your own money to create a credit limit for a secured credit card. The credit limit given to you is the amount of money you deposit at the credit institution. In case the card is misused, the deposit money will be used to cover losses, and that is why the card is called “secured”.
You will not find the exact same card on Bank of America’s official link. Notice that nowhere on the page is it mentioned that the card is a reward card. If you apply online you can only get the normal non-reward card. When I applied in a branch, the personal banker somehow managed to get me the cash rewards version without me specifically asking for it. When you apply in person, make sure to communicate that you want the cash rewards version. Otherwise, after applying and obtaining the card you can call Bank of America at this number: 866-421-8153 to request the cash rewards package to be added.
Like any other secured credit card, the BankAmericard Cash Rewards secured card requires a collateral deposit. Think of this deposit as a checking deposit locked for one year: you cannot touch it, you cannot spend it, you cannot withdraw it, but it is still yours. Should you decide to cancel the card early you will get the deposit back in full; however, you will also lose any history associated with the card, so unless you urgently need the cash don’t do it.
The limit on the card is determined by the amount you deposit, ranging from $300 to $10,000. If you have money to put aside for a year, I would suggest a limit as high as possible, for four reasons. First, a higher credit limit will look more impressive for your future credit applications. Second, a higher limit will allow you to make larger purchases. Third, a higher limit will result in a lower credit utilization ratio which will make your credit profile look better. Fourth, if you decide to raise the limit in the future you will get a hard inquiry which will slightly damage your credit profile for 2 years.
I have also heard that if you apply for a regular Bank of America credit card as your first card and do not get approved they will offer you a partially secured card: for a limit of $500 you will only need to deposit $99. I tend to think that $500 limit is too low, but that is a good option for those without much cash in hand.
Apart from being one of the very few secured credit cards that offer rewards, what makes this card stand out is its reliable record of graduation: as long as you maintain your card adequately for one year, and sometimes even less, it will become an unsecured card. That means the card will be reported as a normal credit card and the deposit will be returned to you. Most other secured cards don’t automatically graduate within one year. Some of them never graduate; you’d have to cancel if you want the deposit back.
When the card graduates, the annual fee normal will carry over, but not to worry: you can call Bank of America at 866-421-8153 to permanently remove the annual fee for you. That is exactly what I did. You can read further about my experience in my previous blog post: https://hiepsfinance.wordpress.com/2013/01/01/secured-credit-card-graduation/
The only weakness of the card is that it is reported as a secured card, just like most other secured cards, while a few of the other cards such as the Capital One secured credit card are not reported as secured. If you apply for a second card before the card graduates, the credit analyst will be able to see its secured status, which may matter or not depending on the credit department’s underwriting criteria.
The annual fee is $39, and there is no promotion on the card. Otherwise it is almost exactly the same as the regular BankAmericard Cash Rewards card.
I. It is a cash back-type rewards card
(For more information about different types of credit card rewards, please read my previous post )
- Cashback formula: 2% on groceries and 3% on gas for the first $1,500 in combined gas and grocery purchases each quarter, and 1% on everything else. The bonus categories likely account for the majority of your everyday spending, so they are very useful.
- Cashback redemption options: statement credit or bank account deposit. If you deposit into a Bank of America’s checking or savings account, you earn a 10% bonus on the amount redeemed. So effectively, the bonus tiers are 3.3%, 2.2%, and 1.1%.
- Minimum amount for redemption: $25
II. Card benefits:
Finding all information on this is tricky. Amusingly, Bank of America does not fully display the benefits on the official product page. They also do not explain the benefits that are displayed. Fortunately, the Benefit Information Center has all the information you need. To borrow the language from the Center:
1. Purchase Replacement – Purchase Replacement – Within the first ninety days of the date of purchase, Purchase Replacement will replace or repair eligible items of personal property purchased entirely with your eligible card up to a maximum of $500 per claim and $50,000 per year, in the event the item is lost, stolen, or damaged.
This is a very useful benefit – don’t forget about it. If your laptop is water damaged in the first 90 days it may be covered by your card’s insurance even if the manufacture denies warranty!
2. Purchase Guard – Purchase Guard will double the manufacturer’s original United States (U.S.) warranty period on personal items purchased in full with your eligible card that carry a warranty duration of less than 1 year and extend the manufacturer’s original U.S. warranty period for 1 additional year for Covered Purchases with a warranty duration of 1 to 3 years.
This means warranty extension for your laptop, TV, etc. Also very useful!
3. Auto Rental Collision Damage Waiver – When certain terms and conditions are met, the Auto Rental Collision Damage Waiver benefit provides at no additional charge reimbursement for damage due to collision or theft up to the actual cash value of most rental vehicles. In your country of residence, this benefit is supplemental to, and excess of, any valid and collectible insurance from any other source.
If you rent cars, you should read up on the coverage in advance. Notice that the coverage is supplemental to any other insurance coverage.
4. Emergency Travel Assistance – Provides emergency and travel assistance services to eligible card members 24 hours a day, seven days a week. Assistance services range from medical, travel, legal assistance, to embassy and consulate information, currency exchange rates and weather reports.
If you’re stuck on the road with a flat tire and no one to help, call the number on the back of card. They will provide assistance, 24/7!
5. Common Carrier Travel Accident Insurance – Common Carrier Travel Accident Insurance provides accidental death and dismemberment coverage protection while traveling on a common carrier, provided the entire fare is charged to your eligible card. Common Carrier Travel Accident Insurance provides coverage up to $100,000.
I don’t want to imagine this being helpful to me. But you get the point.
III. Interest rate and fees
APR: 20.24% variable
Annual fee: $39. After the first year the card will become unsecured at which point you can request the fee be removed.
Balance transfer fee: 3%
IV. Additional Benefits
ShopSafe: this function lets you create a virtual credit card account when shopping online, helping protect your real credit card number. You can set an expiration date for this account. If you shop on a suspicious website and feel nervous about giving away your credit card information, this is the way to go. You can read more about this on BofA’s website. This feature is quite unique to Bank of America.
Mobile Banking and Text Banking: access your account and perform most functions through your smartphone/cell phone. Every bank has these nowadays.
For an overview of BofA credit cards’ hidden benefits, check this out: https://hiepsfinance.com/2013/02/22/anatomy-of-a-credit-card-bank-of-america-cash-rewards/
In my opinion, the BankAmericard Cash Rewards secured credit card is one of the finest products that Bank of America offers. Reliably graduating within one year, offering flexible limits, and giving cash rewards, this gem is one of a kind. If you are looking to build credit, I highly recommend this card. Welcome to the credit world!
-Richard (Hiep Tran)
61 thoughts on “Today’s feature: Bank of America BankAmericard secured credit card review”
I have a question. What if we use this secured card for few months (say 4-5 months) and didnt use at all, will that effect the credit history and what about secured deposit?
Do you know about this?
Not using the card will not in and of itself affect your credit history or secured deposit. However, lenders often close trade lines that are inactive in an extended period of time, usually around 6 months. On top of that, in order to get the most out of your secured card including possible early graduation you should use the card as often as you can. If you have a reason to not use the card much, at least try to buy something with the card every month to show activity and build relationship with Bank of America. Hope that helps.
Thanks for your kind reply.
I came to USA last month on temporary stay and would be staying till Nov 2013.
So just opened an account in BOA, now planning to apply for credit card (which will be secured only) as I feel having credit card in USA is kind of basic requirement. So my concern on usage of credit card when I return to my home country, where if I use this credit card would incurr some fees.
If you dont mind can I ask you your opinion on other credit cards like Captial One, Discover or any other which can fit in my requirement (use of Credit card for few months)
Thanks in advance,
Are you going to return to the US after the trip back home? If you only stay here for a few months having a credit card won’t do you much good. If you do plan to return to this country, yes you definitely should get a credit card. When you are back home, you can make some simple online purchases such as a song on iTunes or Amazon every month just so you can show some activity.
I do not personally have Capital One card, but I have to say that their reviews aren’t stellar. I’ve heard that they tend to incur inquiries on all 3 credit reports when you apply for a card, and are not very willing to increase your credit limit. Discover cards, on the other hand, have tons of rewards and benefits and top notch customer service, though they aren’t generous with starting limits and aren’t accepted everywhere like Visa and Mastercard products are. For your first card, I would say that Bank of America secured card is a fine choice.
Let me know if you have further questions.
Yes I am not sure whether I would come back, I came on offical work. Again its based on my company to get projects and send me back.
What if I use it for few months and then cancel it, get back the secured deposit. Do you think it affect my credit hsitory very badly and if I happen to come back after a year or so, I will have a problem with getting anothe credit card??
Thanks a lot..
Closing credit cards happens very often and will not affect your credit history until the closed accounts stop showing up on credit reports, which isn’t until several years after closing. I think your strategy would work. When you come back later you will have already established some credit history and should have less difficulty getting another card.
Thanks a ton again for your reply..
I appreciate your efforts..
ALL THE BEST WISHES !!!
Glad to help, Giri. Enjoy the stay in the US and travel a ton! If you have any questions don’t hesitate to ask!
Have a great weekend.
Thank you for your information. I just told my brother who has a BOA secured card. He told me that he has it since last June (1 yr & 1 month ago), and it should a year by now, but they didn’t contact him about making it a regular credit card. He’s wondering when and how did they tell you?
Has your brother been paying on time every month? I know that Bank of America requires at least 6 consecutive months of positive payment history to consider graduation of a secured card. My card graduated just shy of one year from issue date. Bank of America sent me a paper mail when they unsecured my card, congratulating me on the graduation. If your brother has a perfect payment history with the card, I would give Bank of America a call to find out the reason for the delayed graduation. Everyone I know having the card has had their card graduate within a year.
Please report back if you call Bank of America – I would love to hear about your experience! And please let me know if I can be of further help.
Hi, I have question about this card. I just got approve from BOFA secured credit card $99/500. Do I have to pay Annual Fee every years? I want to ask can I remove AF after I graduate from this card?
Congratulations on getting the card! Are you a credit builder or re-builder? The annual fee is renewed every year. However, once your card graduates you can give Bank of America a call to permanently remove the fee. That’s exactly what I did. Use the card well and it will grow with you!
Let me know if you have any other questions.
i got a boa secured on april 2013 and i just got amex card august 2013 if i cancel my boa will it affcet my amex card in anyway?
Provided that you close the card without leaving a balance on it, no, it should not. Congratulations on the Amex card by the way!!! What card is it? A charge card I would guess? 🙂
credit card bce and thank you
Was the card only your second credit card ever? That is very impressive! Did you have some credit history before the application? Sorry if I’m asking too much – you are the first person I know that potentially has less than 6 months of credit history before getting approved for an Amex credit card! 🙂
this a great blog. Thanks for all of the info. I got a BOA Secured card (99/500) in Aug. 2013. Then I applied and was approved for a Neiman’s card in Oct. 2013 w/a CL of $700 (now $2800) and got the golden goose a AmEX BCP in Dec. 2013 (1k to start – just received my 3x CLI yesterday). So AmEx approved me with like a 4 mos. credit history. The only thing in my recent history was a paid off car loan from several years ago. I was rebuiilding from some bad situations over 10 yrs. ago.
That was a very fast track to Amex! The paid off car loan definitely helped, so you didn’t start from scratch. Congratulations on overcoming the financial difficulties in the past and heading to excellent credit territory! Thanks for sharing your story.
lol its ok yea thats my second credit card and yes a car loan a year ago
Fantastic! Congrats again! I would’ve applied for that card too if I hadn’t already had a similar card, the BofA Cash Rewards (the secured card that graduated). I will analyze the benefits of Amex cards in the next posts, so stick around and stay tuned! 🙂
You mention calling BofA to request Cash Rewards be added to your account once approved for a secured card. Can you please provide this number? Thank you
I think I called this number. Give it a try:
After reading this article, I am very interested in applying for this secured credit card. I am only 20 years old, have been working since I was 16, and have an auto insurance bill of approximately $204 a month (the title is in my name but the title brand is reconstructed vehicle) and an Internet bill of approximately $90 a month in my name. However, I have a few questions if you don’t mind.
First, I have tried applying for about 3 or so regular credit cards in the past few months with my parents as co-signers/joint applicants and have been denied (I also tried applying when I was 18 and 19). Will this negatively affect me? Should I wait about a year or so before applying?
Also, I have been laid off twice from my previous employer and, unfortunately, I had to collect Pennsylvania Unemployment. Does this negatively affect applying for a credit card as well?
Thirdly, how would I figure out my yearly income? At my new job, our hours have unfortunately been cut from 40 hours a week to a mere 30 (however I am still considered full time). I make $10.54 an hour. I work for a division of the federal government now (not really sure that that matters). Or would it just be safer to wait until I use my tax return information that I receive in February and use the information off of that?
Fourthly and finally, my buddy at my old job said about 5 years ago he got a contract phone plan and was able to get a credit card that way. I went to an AT&T store and, because I have no credit history, I had to provide a $500 security deposit. Would you recommend doing this as an additional way to help provide credit history or no?
Thank you for your time and financial advice and sorry about asking so many questions. I am trying to become more knowledgeable in how to establish credit and it’s a lot different then how it used to be in both getting credit and being financially secure (or so my parents say). Have a nice day!
Each time you apply for a credit card, an inquiry will appear on your credit report, and that will negatively affect your credit history for about a year. I would check your credit report to see if you have any negative items on there; the previous denials may have had to do with your parents’ credit history or your own. See instructions here: https://hiepsfinance.com/2013/03/30/how-to-access-your-annual-free-credit-report-step-by-step-instructions/
If any information is wrongly recorded, you should dispute with the CRA’s. Unemployment benefits is not a credit report item and therefore should not affect your credit history.
When you declare your annual income, you should put down whatever amount you can verify. Last year’s tax return and recent pay stubs are reliable proofs of income. Which figure to pick is up to you.
Whether you should apply for credit now depends on your credit profile and current income. If your income is reasonable and you don’t have any negative items on your credit report, you can apply now.
I do not have any knowledge of AT&T-related credit cards, but if you have to provide a $500 security deposit to get a credit card, why not go the traditional and more reliable route of getting a BofA secured credit card?
Might be a dumb question but… do I get my deposit back if I am not approved for this card? Or do I get approved automatically because I make a deposit? :0
If you do not get approved for the card they will not take a deposit.
I had a quick question. If I were to apply for this BOA credit card and dont get approved will this affect my credit score?
Whenever you apply for credit, that results in a hard inquiry on your credit report and negatively impacts your credit score, whether your application gets approved or not. Does it help?
Yes it did. Thank you
Turns out I have 5 credit inquiries. Im scared that if I apply for this BOA cash rewards card it might affect my credit score. Because my credit score recently rose up 11 points more. What should I.do?
I am pretty sure BofA pulls Experian. How many inquiries do you already have on your Experian report? Do you see yourself applying for credit in the next 6 months or 1 year? What’s already on your credit profile? For sure if you apply for credit now, your credit profile will be affected in the short term. We should weigh the advantages and disadvantages of opening a new trade line, and more information about your credit situation will help.
I applied at the branch and received a regular secured credit card a month ago. I’m wondering whether BoA still offers the cash reward version added on my account?
Why don’t you call BofA to find out?
I applied for a BOA credit card around pm. today and was told I was not able to receive an instant decision and a written decision will be mailed to me within 30dys. Is this pretty much a denial ? Or is there hope, I know you cannot provide a definitive answer but any insight you can give me will be helpful. There are further details below:
1. I am an actress that listed my agency as employment
2. I am also married and the bulk of my income comes from him, so i listed the combined total, but had no way of listing my marital status
3 I have had 2 joint accounts with my husband for 7 years
4 I was sent an offer of pre selection through the mail applied online and transferred money over from my BOA account
5 My credit is god awful but not convict bad, (while I pay off some debt ) I really want to build credit properly.
Thank you for all of your help! I am soo thrilled I found this site…..
I’m glad you stopped by my site in your credit building journey. It is normal to not be approved for a credit card instantly. I would either call a BofA credit analyst or just wait for the decision to come in the mail. If you have never had bankcruptcy and never had bad history with BofA I think you have a good shot. Just how bad is your credit exactly?
I’ve written a bunch on how to properly build credit. If you have any specific question, feel free to give it a shout!
Hi Richard. I got this card a little over three wweeks ago and was making certain inquiries as to the annual fee being waved once the graduation process took place and was told the fee could not be removed because the card started off with a fee and therefore could not be removed. Is the number you provided with correct? Because once this card graduates, I want to make sure that fee comes off. The rep I spoke to said that you would have to apply to a regular credit card without an annual fee in order for it to be without a fee.
The first BofA credit analyst I spoke with said the same thing, but the second one waived the fee for me. I’d say call back in a year. You’ve got the card anyway. Congratulations!
Hello how woul I know I they mailed the card already? I applied for secured one
Normally they don’t tell you. If you were approved you should receive the card in about 2 weeks. Ot takes a week to issue a new card and another week to mail it.
I have my checking and savings with BoA. I applied for the secured credit card and was denied. Have you had anyone with a similiar situation? I am really bummed out. I was just approved for a secured card through Capital One, but figured it would be smart to have a secured line of credit through the company where 95% of my financial transactions take place, seeing as I already had a relationship with them. I only asked for the minimum amount to get started, $300. I do have some bumps and bruises on my credit, but I have not filed for bankruptcy. I just don’t understand how I could get denied a secured line by the banking institution that can see my income on a monthly basis
I do know people being denied for the card. Do you have a sizable amount of assets with BofA (say 10k or more) ? It would definitely help. I would talk to your personal banker and have him call the credit department to try to reverse the decision for you. Good luck and please let us know how it goes!
i just got approved for the 99 deposit/500 limit. i will get my card in a week. my question is… do i have to make the 500 transfer to my account to be able to use it. i think its a partial secured credit card. my account shows i have 0 dollars. how does that works?
I’m actually not sure how it works if you do not already have sufficient cash in your BofA accounts. When I applied for the card I was a BofA Checking Account client and the deposit got deducted from my checking account. I’m guessing BofA will either mail you or call you to request a check for the deposit. I’m curious what BofA’s actual approach is. Please keep us posted, and let me know if you have any other questions!
Hi i am Cathetine Bonner I want to apply by mail for your Credit Card via by mail not on line . Can i have a Application sent to me ?
I am not a financial institution and therefore I do not issue credit cards. You can contact Bank of America, Chase, American Express, etc. to request a credit card application mailed to you!
I’ve had a secure card with wells fargo i got unemployed and wasnt able to pay untill the card closed on me i have payed everything off but it did hurt my credit would i be able to get a secure card with BOA ?
I would pull a credit report and see what is exactly on it. Is it a charge-off, collection, or what? Let me know and then I can offer more detailed advice. I’ve written a blog post that shows how to get credit reports for free. Keep me posted!
Hey I applied for the boa secured credit card a while ago. A week and two days ago I got a denial letter. When will I get my $500 back?
Hi Jessica. Did you send them a check?
hi, I got married a year ago, I am from another country, now that I have social security-driver license and green card, I want to start build my credit., I am already BOA client with my husband. I am thinking to apply for their secured card ,I have 2 questions :
1- I do not work, it affect to build my credit in case I am approved for the card?
2- my husband just got 8 thousand limit credit card from southwest airlines and put me as additional to have a card too, this card counts to build my credit or just his?
Since you are married, you can use household income as your disposable income. As long as your husband makes decent income, you should not have an issue. If you are an authorized user on his card, that should help your credit. But you should still get your own, since in many situations authorized user accounts will be removed from credit consideration. Let me know how the application goes and if I can help with anything.
Hi I have the secured card and just was wondering how can I make sure I graduate within a year. I have a 300 limit and use my card often enough and make payments on time. I’ve had the card for nearly 6 months only thing I’m a little skeptical about is that my credit utilization it high.do you think this will affect me on graduating?
You should focus on paying off the balance before the due date every statement cycle. If you are concerned about utilization, you can pay off the balance even before the statement closes. Honestly, I do not think that is an issue. You only have one credit card, and the credit card has a low limit, so naturally you will have high utilization. Nothing to fret about.
Should I pay my balance in full or just pay the minimum balance
You should pay the balance in full. This is crucial when you are building credit.
How will I know when my card has graduated? Also, I’m having a hard time understanding the cash flow. I received the card, had a $300 limit, wanted more so i requested it be $1000 and it successfully went through. It took $700 from my account, which is cool, but I am wanting to return that money back to my checking account. Is that the money that is looked in for the year as you stated?
You will receive a letter from Bank of America when your card graduates. You will also see the name of the card change in your online account if it currently says “secured”.
The money that you deposited to be your credit limit is indeed the money locked in until the card graduates.