USAA Secured American Express Review

USAA Secured AmexThe USAA Secured American Express is specifically marketed towards people who want to establish, rebuild, or improve their credit score.  This is a secured credit card- USAA requires all cardholders to open a two year Certificate of Deposit account (which is basically a security deposit).  Whatever amount you choose to deposit will be the credit limit on your card.  Only USAA members may apply for this card.  However, if you are currently a member of the military, an honorably discharged veteran, or an eligible family member, the online application for the USAA Secured American Express also includes a membership application for USAA. Card members do not earn points or cash back with this card.  But for people with less-than-perfect credit, the USAA Secured American Express offers a reasonable opportunity to have a real credit card (not a debit or pre-paid card) that enables you to rebuild and improve your credit score over time.

New members must open a USAA two-year Certificate of Deposit (CD) account during the application process.  The minimum amount you may deposit is $250 and the maximum is $5,000.  Whatever amount you deposit into the CD will be the credit limit on your card.   Cardholders can add additional deposits (and request a credit limit increase) at any time.  The Certificate of Deposit does earn minimal interest (currently 0.54% APY) and the money is yours to keep as long as you do not default on your credit card payments.

This card offers an annual percentage rate of 9.90% to 19.90% on purchases, balance transfers and cash advances.  Your actual APR will be determined at the time of approval and will be based on your creditworthiness.  This is a variable APR based on the Prime Rate.

Both balance transfers and cash advances incur a 3% fee (based on the total amount) with a maximum fee (per transfer) of $200.  The cash advance fee is waived if you transfer funds electronically to another USAA deposit account.

New card members can sign up for six months of free CreditCheck Monitoring from Experian when you apply.  This benefit allows you to review and manage your finances easily online.

Additionally, cardholders receive these benefits:

  • Rental Car Insurance- 31 Day Worldwide Coverage
  • Concierge Service
  • Travel Assistance Services
  • Identity Theft Resolution Services
  • Price Protection

Card members are charged a 1% foreign transaction fee on all purchases made with the card while traveling abroad.

The annual fee is $35.

The Facts:

Below we have broken down the specific details of the USAA Secured American Express to help you determine if it’s a good choice.

The Good:

Low annual percentage rate:

For a credit card aimed at people with little or bad credit, this secured card offers a relatively low APR on purchases, balance transfers and cash advances.  Your actual APR will be between 9.90% and 19.90%, depending on your credit score at the time of approval.  This is a variable APR based on Prime.

CD deposit account required:

Members are required to open a two-year Certificate of Deposit account when applying for this card.  This feature ensures that you have at least some money put away even though it earns very little interest.

CD amount equals credit limit:

Cardholders can deposit a minimum of $250 and a maximum of $5,000 into a CD account.  Whatever amount you choose will be the credit limit on your card.  Members can add additional deposits at any time (and may request a credit line increase).

Additional benefits:

  • Rental Car Insurance- 31 Day Worldwide Coverage- Pays for covered damages, including physical damages and theft, to a rental vehicle for up to 31 days. All rental charges must be paid for with the USAA Secured American Express.
  • Concierge Service- 24/7 access to personal assistance services such as making hotel or restaurant reservations or finding the perfect gift.
  • Travel Assistance Services- Offers assistance when you are traveling more than 100 miles away from home and problems arise such as medical emergencies or passport issues.
  • Identity Theft Resolution Services- If your identity is ever compromised, this service assists with notifying credit bureaus and getting you a replacement card.
  • Price Protection- If you find a lower price (within 60 days) on a new item that you purchased with your card, you may be entitled to reimbursement for the difference. Certain restrictions and exclusions apply.

Credit requirements less stringent:

This card is aimed at people who have little or bad credit.  The lower your credit score the higher your APR will be but a maximum APR of 19.90% is still relatively low for a secured card.

The Bad:

Annual fee:

For a non-rewards card, the annual fee of $35 is fairly steep.

Foreign transaction fees:

Members are charged a 1% foreign transaction fee on all purchases made on the card while outside of the U.S.

Locked into a CD:

Most other secured credit cards allow you to close your account at any time and receive your security deposit back immediately.  The USAA Secured American Express requires you to open a two-year Certificate of Deposit.  If you close your account before two years you will pay a penalty for early withdrawal.  However, the yields on CDs are so low right now that this may not be a major factor should you decide to close your account.

Card is not managed by American Express:

American Express is strictly the payment network for this card.  All transactions, billing, and online account access are done through USAA.

The Ugly:

No rewards:

This card is a secured credit card with no frills.  Members do not earn points or cash back.

Must be a USAA member to apply:

This card is expressly for USAA members.  You must be a current member of the military, a veteran with an Honorable Discharge, or an eligible family member to qualify.