Review: Is USAA Secured Card Ideal for People with Bad Credit?

By J.R. Duren
HighYa Staff
Published on: May 19, 2017

USAA, a financial institution who caters to members of the military and their families offers a credit card designed for people with bad credit called the USAA Secured Card American Express.

What makes this particular card tailored for consumers with bad credit – or at least those who want to rebuild their credit – is the fact that you have to make a deposit of at least $200 to open an account.

Exactly why you have to do that is something we’ll cover later on in this review. For now, we want to give you an idea of the topics we’ll cover in the next few minutes concerning the USAA Secured credit card:

  • Short-term benefits
  • Long-term benefits
  • Rates and fees
  • Expert reviews
  • Comparison to other cards

As we work through the first four topics on that list, we’ll weave in comparisons between the USAA Secured American Express and other secured credit cards made for people with low credit scores.

Pro tip: USAA offers a Visa Platinum card with identical benefits. Aside from the name of the card, there aren’t any differences that make one better than the other.

A Quick Word About Secured Credit Cards

The USAA Secured AmEx is called “secured” because you have to front at least $200 in order to open the account. Your credit limit is equal to how much money you pay up front.

The reason USAA and other financial institutions do this is because data shows that consumers with low credit scores are more likely to default (pay more than 90 days late) on their account.

Defaulted accounts are headaches for financial institutions, so they ask their USAA Secured customers to deposit a certain amount of money so that, if you max out your card and don’t pay, they can take the money you paid up front and cut their losses.

The USAA Secured American Express Credit Card’s Short-Term Benefits

One of the ways that credit card companies get you to sign up for their credit cards is by dazzling you with up-front offers that promise rewards or cash if you can spend a certain amount of money within 90 days of owning the card.

The Southwest Rapid Rewards Plus card is a great example. Their current promotion says that if you can spend $1,000 in the first 90 days, they’ll give you 40,000 Rapid Rewards points you can use to book multiple flights on Southwest.

We mention that card partly because it’s a nice example, but also to let you know that, once you work your way from bad credit scores to average ones, that’s a card you can look forward to.

Now, as far as the USAA Secured AmEx goes, you aren’t going to get any up-front rewards. It’s annoying, but it comes with the territory of having credit scores that need a lot of work.

Near the end of this article we’ll give you some tips on how to raise your score, but, for now, let’s move on to the card’s long-term benefits.

The USAA Secured American Express Credit Card’s Long-Term Benefits

So, most secured credit cards require you to make a deposit that acts as collateral just in case you can’t pay your credit card bill.

Fair enough, as far as they’re concerned.

Security Deposit Goes Into a CD

What sets USAA apart from most financial institutions offering credit cards to people with bad credit is that your Secured American Express deposit goes into a CD, or “certificate of deposit”.

CDs are meant to act as a long-term savings accounts that earn more interest than a regular savings account.

The other difference between a CD and a savings account is that you have to wait a certain amount of time to withdraw the money. Keeping it safe from withdrawals is, in theory, what helps the account earn as much interest as possible.

Here are the details on your USAA CD:

  • Two-year restriction on withdrawals
  • 0.54% interest rate
  • Flexibility to make deposits and request increased credit limit

Most of the secured cards out there don’t really work with your best interest in mind, aside from letting you get a card that can help you rebuild your credit.

We like that the USAA card allows you to earn a little bit of interest on the money you deposit as well as make additional deposits that have the possible double benefit of earning more interest and increasing your credit limit.

Special Interest Rates for Military Members

As with all USAA credit cards, members of the military can get special interest rates when they’re deployed, when they get a Permanent Change of Station (PCS) or when they participate in a qualified military campaign. Here is a list of those discounted interest rates:

  • Deployment or PCS: 4% on all balances for up to 12 months
  • SCRA: 4% on debts you had before going on active duty
  • Military campaign benefit: Refund of finance charges you got while serving in a qualified military campaign

One of the nice things about the SCRA rate reduction is that, should you have any pre-service balances left after you complete your active duty, the 4% rate applies on that balance for up to one year after you’re done.

Shopping and Travel Benefits

Many of the credit cards you check out have a series of benefits you can take advantage nearly every time to make a purchase.

Many of the things you buy with your USAA Secured are protected by the following benefits:

  • Rental car coverage
  • Price protection
  • Extended warranties

Each of these benefits have their own restrictions and limits, so make sure you review the benefits guide you receive with your USAA Secured AmEx.

Without getting into too much detail, we’ll say that your price protection will reimburse you if something you bought goes down in price within 120 days of your purchase.

Your extended warranty will add up to an extra year of a warranty on items with manufacturer’s warranties of 3 years or less.

Another benefit? You aren’t liable for fraudulent purchases made on your account, which means you won’t have to pay a dime if identity thieves use your account to buy things.

Pro tip: The company who you’ll contact to make claims in each of these areas is called Sedgewick Management Services, Inc., 888-884-6643.

Reviews of the USAA Secured Card American Express

As part of our research of this USAA card, we read through reviews from other sites including Wallet Hub, Credit Card Insider and Doctor of Credit.

Wallet Hub

Wallet Hub’s John Kiernan gave the USAA Secured AmEx a 2.8 rating, listing the card’s APR discounts and CD deposit as pros.

For cons, he chose the card’s $35 annual fee, $250 minimum deposit and its military exclusivity as the card’s main drawbacks.

His final thoughts on the card noted that the card has “middle-of-the-road terms,” but he goes on to say that “USAA’s secured credit cards are a fine option for building or rebuilding your credit.”

At the time of publishing, the card had more than 1,200 consumer reviews on WalletHub. Reviewers gave it an average rating of 3.5 stars, with 55% of users giving the card 4 or 5 stars.

One reviewer named “Steve Irvan” said he was impressed with USAA’s customer service and he loved the Secured American Express card.

“The annual fee is pretty small compared to some other cards I’ve had in the past, and their customer service is absolutely top notch,” Irvan wrote. “No monthly transaction fees. And best of all, the initial $250 goes into an interest-bearing CD.”

Credit Card Insider

Credit Card Insider’s Brendan Harkness gave the USAA Secured AmEx 3 stars, saying it’s a “great secured credit card for military service members and their families” and that “benefits as good as these are pretty rare to find on secured cards.”

Doctor of Credit

The final external review on this list comes from Doctor of Credit, whose editor William Charles said, “it has quite a high annual fee, but the APR is one of the lowest on the market.”

He knocked the card because only members of USAA can get it, which means you have to be current or former military servicemember or a dependent of one.


We feel as though the reviews of this card are harsher than they should be. If you compare the USAA Secured AmEx to unsecured cards, then, yes, it’s benefits and rates don’t rate very well.

But, when the card is compared to other secured cards or cards created for people with bad credit, we believe this card stacks up really well against the competition. The card’s annual fee is middle-of-the-road and it’s APR is among the best.

» For Further Reading: Best Secured Credit Card for Bad Credit

Bottom Line: The USAA Secured American Express Is a Great Credit Card for Consumers with Bad Credit

When you compare the USAA Secured AmEx to other cards created specifically for people who are trying to rebuild their credit, you’ll find some distinct advantages and disadvantages.

The Pros of the USAA Secured Card

We think this card is a great tool for consumers with bad credit because it’s lowest APR is better than all but one of the cards we researched in our article, “Good Credit Cards for People With Bad Credit”.

The annual fee is lower than all but one card we reviewed, too, making this card a “cheap” option for people with bad credit.

And, of course, the card’s reduced interest rates for servicemembers is a perk you just won’t find with any cards available to the general public.

The Cons of the USAA Secured Card

We’d say the biggest drawback to this card is that only members of USAA can access it.

Because USAA’s membership is limited to members of the military past and present and their families, most consumers won’t be able to take advantage of it.

Also, we’d say one of the disadvantages of this card is that you don’t have any way to earn rewards aside from the CD’s interest rate.

Who Is the USAA Secured Card Good For?

We think the perfect candidate for this card is a member of the military who, for whichever reason, is struggling with bad credit scores and wants a credit card that can help him or her rebuild his or her credit.

As we’ve mentioned several times in this review, the USAA Secured Card American Express has a competitive APR.

Remember, though, that competitive APR is available to those with the best credit scores among people with bad credit.

USAA doesn’t say exactly which scores get the lowest APR, but we’d imagine you’ll need to have around a 650 in order to get the card’s 10.65% APR.

Even if you get the highest APR on the card, 20.65%, it’s still a competitive rate compared to the Discover it Secured’s 23.74% and the Credit One Platinum’s high-end APR of 24.65%.

While you don’t get any rewards with the card, you do get enough of its all-around strengths to make this a great option for USAA customers.

If you aren’t satisfied with the options you have here, take a look at our review of the Discover it Secured credit card – it’s cash-rewards program is pretty amazing.

Also, if your goal is to rebuild your credit, we’ve got two excellent guides to help you do that:

Both of them help you understand why credit scores drop and what you can do to slowly – and quickly – raise them.

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