Citi Secured Mastercard Review: Is It Really Worth It?

By J.R. Duren
HighYa Staff
Updated on: Sep 11, 2019

The Citi Secured Mastercard is a card for people with bad credit that has minimal benefits meant to help you build your credit scores.

What makes the card unique is that there is no clear plan for you to upgrade to a card that doesn’t require a deposit.

Also, it requires you to lock into a lengthy contract to use the card.

In our review, we’re going to help you see how this card can help you build your credit and why it may or may not be a good fit for you.

To accomplish this, we will tell you how the card works, what its rates and fees are, how It compares to other cards for bad credit and what we think its pros and cons are.

Also, because this card is meant to help you build your credit, we’ll include a series of tips about how to build your credit scores.

How the Citi Secured Mastercard Works

Quick Facts
Citi Secured Mastercard
Pros: No annual fee

Cons: No rewards, penalty APR, 18-month commitment

Estimated Yearly Cash Rewards: None
Sign-Up Bonus Annual Fee Regular APR
None None 24.49%

To get this credit card, you’ll need to go to the Citi website and apply for the card. Citi will analyze your credit scores and credit history to figure out if they’ll approve your application.

Nearly every credit card company you find will check your credit history and credit scores before approving you for a card. They do this to judge your risk level.

If you have a lot of payments that were more than 30 days late, you’re a high-risk customer. Other negative marks on your history like bankruptcies and collections accounts work against your application, too.

As such, Citi’s fine print says they won’t approve your application if you have a bankruptcy in the past two years.

Another aspect of the application is a security deposit. This is another risk-mitigation move for Citi.

They require you to deposit money upfront. If you don’t make your payments, they’ll take money out of this deposit to cover your payment.

This deposit method makes your account secure from a financial perspective, which is why it’s a “secured” credit card.

Deposits range from $200 to $2,500. Whichever amount you choose to deposit, that amount will be your credit limit.

Perhaps the most important thing to know is that you enter an 18-month contract with Citi if you the company approves you. This means you have to use the card for 18 months because Citi holds your deposit for 18 months.

You can get out of this 18-month commitment one of two ways. First, if you stop making payments on your card, Citi will use your deposit to cover those payments, close your account and return what’s left of your deposit.

Second, Citi may return your security deposit and upgrade you to an unsecured card. Our research indicates Citi may be willing to do this if you can make on-time payments every time you have a bill due. You can also help your case if you pay off your entire balance every month.

These two habits are traits of responsible credit card owners. They also heavily influence your credit scores.

If you can keep your balance below 30% of your credit limit (below $300 on a $1,000 limit, for example) and never pay more than 30 days late, you’ll see your credit scores slowly rise.

Once your balance exceeds 30% of your credit limit, you’ll see your credit scores drop quickly.

One final perk of owning the Citi Secured Mastercard is that Citi gives you access to your FICO credit score.

This is a key benefit for building your credit. You can log into your Citi account anytime you want to view your score. If you see a sudden drop, it can alert you that there’s something up with one of your accounts.

You can go to a free credit score website like Credit Karma to see your credit reports and find out what’s amiss. In some cases, you may have a late payment you didn’t know about, or someone fraudulently opened an account in your name and racked up a balance.

If they have, you can use the free credit score site to file a dispute with the companies that calculate your credit scores.

The Citi Secured Mastercard’s Rates and Fees

When we talk about “rates and fees” we’re referring to the interest rates and fees the Citi Secured Mastercard charges you based on certain situations.

After the list below, we’ll explain what all these various fees and interest rates mean and when they apply:

  • Interest rate for purchases and balance transfers: 24.49%
  • Interest rate for cash advances: 27.24%
  • Penalty APR: 29.99%
  • Balance transfer fee: $5 or 3%, whichever is better
  • Cash advance fee: $10 or 5%, whichever is greater
  • Foreign transaction fee: None
  • Late/returned payment fee: Up to $39
  • Annual fee: None

The easiest way to split these rates and fees up is into purchases, balance transfers, cash advances, and late payments.

If you can pay off all your purchases every month on your due date, you won’t pay any interest. This is how you “win” with credit cards.

Not carrying a balance on a card with no annual fee means that, as long as you pay your bill on time every month, your credit scores will continue to increase and get stronger.

However, if you make a late payment or you don’t pay off your balance every month, you’ll pay a 24.49% interest rate.

If you carry a $500 balance for a month, your interest rate will cost you around $10 a month in interest. A $1,000 balance for a month would cost around $20 in interest and a $2,000 balance would cost $40.

Our advice is to pay off your balance every month so you don’t have to pay interest.

Balance transfers have the same APR as purchases. However, if you choose to transfer a balance from another card to this one, you’ll pay $5 or 3%, whichever is greater.

A good reason to use a balance transfer is that the interest rate on your other card is higher than your Citi Secured Mastercard’s 24.49%. Remember, though, you’ll have to pay a fee of 3% of whatever the transfer amount is.

A good example would be carrying a $500 on a card with a 29.99% interest rate. This would cost you $149.95 for one year. If you transferred that balance to your Citi Secured Mastercard, your first-year interest payment with fees would be $137.45.

The final interest rate and fee you need to know is the 29.99% penalty rate and the late fee of up to $39.

If you make one late payment or your Citi returns your payment because you don’t have money in your account for the payment, Citi will give you a 29.99% rate that will apply to all future balances you rack up.

If you have a balance of more than $250, your late fee will bet $39. And, if you pay late and then rack up a $500 balance you keep for a year, then you’ll pay around $189 in interest and fees because of one late payment.

The main way to avoid this is to set up auto payments through your Citi account. You’ll be able to choose the day you make the payment and how much that payment will be.

The safest way to avoid late payments is to choose to make the minimum monthly payment.

How the Citi Secured Mastercard Compares to Other Credit Cards for People with Bad Credit

The following chart shows you how some of the other popular credit cards for bad credit compare to the Citi Secured Mastercard:

Citi Secured Mastercard Indigo Platinum Mastercard TOTAL Visa Credit Card Deserve Classic Mastercard Discover it Secured Capital One Platinum Credit Card Wells Fargo Secured Credit Card
Intro offer None None None None $200 None None
Rewards rates None None None None 2x/2x/1x None None
Yearly rewards for $20K spending None None None None $200 None None
Minimum deposit required $200 None $89 None $200 None $300
Annual fee None Up to $99, depending on credit $75 first year, $123 after None None None $25
APR 24.49% 24.90% 34.99% 24.99% 25.24% 26.99% 20.99%
Penalty APR 29.99% 29.90% None None None None None
Late fees Up to $39 Up to $39 Up to $39 Up to $25 1st one free, up to $39 after Up to $39 Up to $37

The main difference between the cards in this chat is that four of them require an up-front fee or deposit and three don’t.

The Discover it Secured has the same deposit minimum as the Citi Secured Mastercard, while the TOTAL Visa Credit Card (secured) charges a non-refundable $89 account opening fee.

Of the cards that require a security deposit, the Discover it Secured has a higher APR but it provides rewards of around $400 the first year and $200 per year thereafter.

We believe the card from Citi edges out the Wells Fargo Secured Credit Card because it doesn’t charge an annual fee and its minimum deposit is lower.

The cards that don’t require a security deposit are the Capital One Platinum Credit Card, the Deserve Classic Mastercard, and the Indigo Platinum Mastercard.

We believe the Citi Secured Mastercard is better than the First Access Premier and the card from Capital One because it has no annual fees and a better interest rate.

However, the Deserve Classic edges out the card from Citi because it has a better interest rate and lower late fees.

Overall, we think the Citi Secured Mastercard is one of the better cards but it falls behind the Deserve Classic, the Discover it Secured and Platinum card from Capital one because of its 29.99% penalty APR.

The Bottom Line: The Citi Secured Mastercard’s Pros and Cons

We believe our research shows that this card’s strength is that it has a reasonable APR and does not charge an annual fee.

However, the card has some clear drawbacks. First, its penalty interest rate is dangerous for those who often pay late. None of the other cards from well-known issuers like Wells Fargo, Discover and Capital One have penalty APR’s.

Also, the fact that you have to wait 18 months to get your deposit back is a big drawback, in our opinion. For example, if you wanted to switch to the Discover it Secured because you don’t like Citi’s customer service.

In general, we think you can find better credit cards if you have bad credit. Whichever card you choose, remember the principles of good credit:

  • Pay your bill on-time
  • Pay off your balance every month
  • If you can’t pay off your balance, keep it under 30% of your credit limit

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