USAA Secured MasterCard Review

USAA Secured MasterCardThe USAA Secured Platinum MasterCard is designed for people who want to build, rebuild, or improve their credit score.  As the name implies, this is a secured credit card- meaning that you are required to give money in the form of a security deposit which in this case is equal to your credit limit.  This card is only available to USAA members.  However, if you are a current member of the military, a veteran who received an Honorable Discharge, or an eligible family member, the online application for the USAA Secured Platinum MasterCard also includes the application for USAA membership. This is not a rewards card.  Cardholders do not earn points or cash back.  But it is a real credit card, not a debit or pre-paid card.  Over time, and with conscientious use, card members can establish credit, rebuild credit (if you have suffered financial setbacks), or generally improve your credit score.

New account holders are required to open a USAA two-year Certificate of Deposit (CD) when you apply for the USAA Secured Platinum MasterCard.  The amount you can deposit ranges from a minimum of $250 to a maximum of $5,000.  Whatever amount you choose to put into the CD will determine your credit limit.  It is calculated on a 1:1 ratio.  Therefore, if you deposit $250, you will have a $250 credit limit on the card.  $500 CD equals a $500 credit limit, etc.  The Certificate of Deposit does earn interest albeit at a very low variable rate (currently 0.54% annual percentage yield).  This money is yours to keep as long as you do not default on your credit card payments.

There is no introductory 0% annual percentage rate offer available to new card members at this time either on purchases or balance transfers.  The same APR applies to purchases, balance transfers, and cash advances.  Depending on your creditworthiness, your APR will be between 9.90% and 19.90%.  This is a variable APR based on the Prime Rate.

Cardholders are charged a 3% fee on all balance transfers with a maximum fee (per transfer) of $200.   Cash advances are also subject to a 3% fee (again, with a maximum fee of $200 per transaction).  The cash advance fee is waived if you transfer funds electronically to a USAA deposit account.

New members are eligible to sign up for free CreditCheck Monitoring from Experian for six months when you apply for the card.  This is a good perk which allows you to review and manage your credit easily online.

Cardholders receive these additional benefits from MasterCard:

  • MasterCard Global Service
  • Extended Warranty
  • Price Protection
  • Master Rental Coverage- 15 Day Worldwide Coverage
  • Identity Theft Resolution Services

Card members are charged a 1% foreign transaction fee on all purchases made with the card while traveling outside of the U.S.  Many credit cards charge up to 3% so this is a relatively low rate but if you often travel internationally, these fees can add up quickly.

The annual fee for this card is $35.

The Facts

Below we’ve broken down the details of the USAA Secured Platinum MasterCard to assist you in determining if it’s worth signing up.

The Good:

Low APR for secured card:

As secured credit cards go, this one offers members a fairly low APR.  Your actual APR will be determined when you apply and will be between 9.90% and 19.90%, depending on your credit score and payment history.  This same rate will also apply to cash advances and balance transfers (with the accompanying fees).

Required to open a Certificate of Deposit account:

If you have poor credit and are trying to improve your credit score, a positive feature of this card is that it forces you to put away money in a two year CD account (which does earn a very small amount of interest).

Amount of CD equals credit limit:  

The amount of money that a cardholder puts into a CD account will be equal to the credit limit on the card.  Members can deposit a minimum of $250 and a maximum of $5,000 into an interest-earning CD account.

Additional MasterCard benefits:

  • MasterCard Global Service- Get 24/7 assistance with any questions related to your card.
  • Extended Warranty- Receive double the manufacturer’s or store brand warranty for up to one year. Restrictions and limitations apply.
  • Price Protection- Find a lower price on a new item that was purchased on the card within 60 days of purchase and receive reimbursement for the difference. Restrictions and limitations apply.
  • Master Rental Coverage- 15 Day Worldwide Coverage- Pays for covered physical damages, including theft, of a rental vehicle.
  • Identity Theft Resolution Services- In the event of identity theft, receive assistance with credit bureau notification and credit card replacement.

Bad credit is ok:

The USAA Secured Platinum MasterCard is specifically marketed to people who want to establish or rebuild their credit.  Applicants with a low credit score and/or less-than-perfect credit normally find it easy to qualify.  Whatever credit line you receive is totally dependent upon the amount of your security deposit (which goes into a CD account) so USAA is protected from loss should you ever default on your credit card payments.

The Bad:

Foreign transaction fees:

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

Balance transfer and cash advance fees:

Both of these transactions will have a 3% charge applied to the total transaction amount.  The maximum fee allowed is $200 per transaction.  The fee will be waived for cash advances which are electronically transferred to another USAA deposit account.

Annual fee:

The annual membership fee for this card is $35.  This is relatively high for a non-rewards, secured credit card.

The Ugly:

No rewards:

This is not a rewards credit card and as such, members do not earn points or cash back.

Tying up money with very little interest:

Cardholders are required to open a two year USAA Certificate of Deposit account in order to obtain this credit card.  The ratio is 1:1 so whatever amount you put into the CD will be the credit limit you receive.  The CD will earn minimal interest (currently 0.54%) so basically you are tying up your money with almost no return on investment.

Do not automatically qualify for an unsecured USAA credit card later on:

Card members are not automatically offered an unsecured credit card with USAA after having the secured one for a period of time.  If your credit score improves over the two years, you may meet the required credit standards to qualify for an unsecured card but approval is not guaranteed.

Must be a member of USAA to apply:

The USAA Secured Platinum MasterCard is only available to current members of the military, veterans who have been honorably discharged, and their eligible family members.