The Wells Fargo Secured Visa is a credit card aimed at people who have little or no credit history or bad credit altogether. It works like a regular credit card except that your credit limit is determined by the amount of security deposit you provide. To be clear, this is not a rewards card and there are no signup bonuses or introductory APR offers given to new account holders.
The Wells Fargo Secured Visa gives members the opportunity to establish or rebuild their credit. This is how it works:
- Credit limits range from $300 to $10,000 depending on the amount of security deposit you provide during the application/approval process. A minimum security deposit of $300 is required to open this account.
- Your security deposit must be available in order to be approved for this account.
- Your payment history is routinely shared with the three major credit bureaus- Experian, TransUnion, and Equifax. Over time, responsible use and timely payments will build or strengthen your credit history.
- You must make at least the minimum payment on time each month.
- Your security deposit is held in your name in an account called the “Secured Card Collateral Account”. This account does not earn interest. Funds from this account cannot be used as a payment for fees or balances.
Wells Fargo reviews secured credit card accounts periodically but there is no guarantee that you will be upgraded to an unsecured card. If you are upgraded, your full security deposit will be returned to you.
The annual percentage rate on purchases is 19.24% (variable and based on the Prime Rate). This is a fairly low APR for a secured credit card – many are over 20%. The 19.24% APR also applies to balance transfers. Card members are charged a balance transfer fee of 5% of the total amount of each transfer or $5 (whichever is greater).
Cardholders are eligible for cellular telephone protection. To qualify, your cellular phone bills must be paid with your Wells Fargo Secured Visa. Protection covers the primary line and up to three additional lines that are listed on your cellular provider’s monthly billing statement. All claims are subject to a $25 deductible (per claim) and a maximum benefit of $600 (also per claim). Cellular phones that are stolen or damaged are protected. Cellular phones that are lost are not. Certain restrictions and exclusions apply.
Members have access to free online credit education courses and tips to help you manage credit wisely. You can also choose your monthly payment due date and sign up for automatic or online payments.
Account holders receive these additional benefits:
- Zero Liability program – Protects you from liability for any unauthorized transactions when reported promptly.
- Rapid Alerts – Receive text and email alerts for monitoring spending, tracking purchases, and receiving notifications of suspicious activity on your card.
- Verified by Visa – Protects your credit card with a unique password for online shopping.
The Wells Fargo Secured Visa comes with smart chip technology for enhanced security.
Card members are charged a foreign transaction fee of 3% on all purchases made on the card while traveling outside of the U.S.
The annual fee for this card is $25. It is not waived for the initial year of membership.
The Facts
Below we have broken down the specific details of the Wells Fargo Secured Visa to help you determine if it’s the right choice for you.
The Good:
No application fee:
Frequently, secured credit cards charge you for simply applying for their card with no guarantee that you will be approved. The Wells Fargo Secured Visa does not.
Bad credit is ok:
This card is designed for people who are either trying to establish or re-build their credit so poor or bad credit is ok. Note: Generally, an applicant will be eligible to apply for the Wells Fargo Secured Visa one year after declaring bankruptcy.
Generous lines of credit:
Your credit limit is determined by the amount of security deposit you provide. The minimum amount required is $300 but the maximum is $10,000 which is almost double what other secured cards allow.
Payment history is reported to credit bureaus:
This card works just like a regular credit card. It is not a debit or prepaid card. Your payment history is routinely reported to the major credit bureaus. Consistent, timely payments play a crucial role in rebuilding credit and carry significant weight when formulating your credit score.
Additional benefits:
Account holders receive these additional benefits:
- Zero Liability program – Protects you from liability for any unauthorized transactions when reported promptly.
- Rapid Alerts – Receive text and email alerts for monitoring spending, tracking purchases, and receiving notifications of suspicious activity on your card.
- Verified by Visa – Protects your credit card with a unique password for online shopping.
Cellular Phone Protection:
Card members can protect their cellular phones from damage or theft when you pay your monthly cellular telephone bill with your Wells Fargo Secured Visa.
Chip Technology:
This card comes with smart chip technology for enhanced security. Chip and Pin (or Chip and Signature) is widely accepted internationally and will soon become the standard in the U.S.
The Bad:
No rewards:
There are no rewards or bonuses offered to cardholders. This card directly targets people with little or bad credit and who want to build a solid credit history going forward.
Annual fee:
There is an annual fee of $25 for this card which is not waived.
High APR:
The APR for all card members is a variable 18.99%. This is relatively high but actually one of the more reasonable rates for a secured card.
Foreign transaction fees:
Members are charged foreign transaction fees of 3% on all purchases made on the card while traveling abroad.
The Ugly:
Security deposit does not earn interest:
Whatever amount of money you provide as a security deposit does not earn interest. Your account may be reviewed after 12 months but there is no guarantee that you will qualify for an upgrade to an unsecured card. Your security deposit is held as long as your secured credit card account is open and active.
Overall, the Wells Fargo Secured Visa is a solid choice for people with no credit or bad credit. The $25 annual fee, while annoying, is fairly low for a secured card. The same holds true for the 19.24% APR – many secured credit cards have APRs over 20%. This card offers generous credit limits which are solely determined by the amount of security deposit you provide. The minimum amount needed to open an account is $300. The maximum is an almost-unheard of $10,000.