Citi® Secured Mastercard® Review: Inexpensive Card for Building Credit

Quick Review

The Citi® Secured Mastercard® is a good option if you have no credit or a limited credit history—and possibly even if you have a bad credit score. Here’s what to bear in mind if you’re considering whether to apply for this card:

• You must pay a security deposit: Because it’s a secured credit card, the Citi® Secured Mastercard® requires a security deposit, which can be between $200 and $2,500. The amount you pay will determine your credit limit.
• It has no major fees: Although it requires money upfront, the Citi® Secured Mastercard® has no annual, monthly, or application fees, so it’s relatively cheap in the long run.
• It’s good for credit building: Citi reports to the major credit bureaus and gives you free FICO scores, so you can improve your credit and monitor your progress at the same time. You can also choose your payment dates and keep track of them with Citi’s account alerts, making it easier to manage your finances and build credit.

Pros & Cons

Who Is the Citi Secured Mastercard® Best For?

If you fit into one of the following categories, the Citi Secured Mastercard® may be a good choice for you:

• Young borrowers: If you don’t yet have a credit history, the Citi Secured Mastercard® is a good way to start one, with reporting to all three major credit bureaus. You can qualify for the card even with limited credit or no credit, and it has no annual fee, so it’s suitable for credit newbies who need a simple and straightforward credit-building tool. You can also eventually graduate to an unsecured card if you use your credit responsibly.
• Anyone else who wants to build credit fast: Citi’s credit reporting and free FICO scores are great for tracking your credit-building progress. Another feature that makes this card good for credit building is the fairly high maximum credit limit of $2,500, as a high credit limit can help your credit score (we’ll explain the reason for this later on).

What the Crowd Says

In general, the Citi Secured Mastercard® gets positive reviews.

However, many reviewers—both experts and actual customers—think that this card isn’t the best you can get for building credit. Many prefer other cards like the Discover it® Secured and Capital One secured cards.

Here’s how the Citi Secured Mastercard® is rated by various sites.

What Major Publications Say

Many professional reviewers give the Citi Secured Mastercard® good ratings. The consensus is that it’s a cheap and good way to build credit, although there are even better cards available.

Two major points of disagreement between professional reviews are whether the APR is too high and how heavily a lack of rewards should be weighed in a card for this credit level.

All in all, though, most experts seem to agree that this card is a decent option for building credit, at least in the short term.

What Cardholders Say

Although most reviewers are pleased with this card’s ability to help build credit, some cardholders have complaints worth considering, and a large number of users agree that the Citi Secured Mastercard® isn’t as good as similar cards from Discover and Capital One.

Problems Graduating to an Unsecured Card

One very common complaint in cardholder reviews comes from people who expected to be able to graduate to an unsecured card after 18 months if they paid all their bills on time. But they say that after 18 months, Citi told them they would have to wait for another year.

Many cardholders are understandably frustrated by this and feel deceived by Citibank. If you’re hoping to use this card as a stepping stone to an unsecured credit card, it’s worth bearing this potential problem in mind.

Better Experiences with Discover and Capital One

Many cardholders recommend giving the Citi Secured Mastercard® a miss in favor of alternatives like the Discover It® Secured or Capital One secured cards. A number of customer reviews say that these cards will allow you to graduate to an unsecured card much more quickly, and some also describe better experiences with the customer service departments.

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Rates & Fees

Fees

• Annual fee: $0
• Balance transfer fee: $5 or 5% (whichever is greater)
• Cash advance fee: $10 or 5% (whichever is greater)
• Foreign transaction fee: 3%
• Late payment fee: Up to $41
• Returned payment fee: Up to $41

Interest Rates

• Purchase APR: 26.24% (variable)
• Balance transfer APR: 26.24% (variable)
• Cash advance APR: 28.99% (variable)
• Penalty APR: Up to 29.99%
• Minimum interest charge: $0.50

Although these interest rates are fairly high, if you’re likely to use your card only for purchases and to pay off your entire balance each month, the high rates shouldn’t affect you.

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Rewards

Although it’s difficult to find credit-building cards with rewards, they do exist. To get rewarded for your spending, try the Discover it® Secured credit card or Petal credit cards, which are suitable for borrowers with no credit, limited credit, or poor credit.

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Credit Limit

When you get the Citi® Secured Mastercard®, your credit limit will depend on the size of your security deposit. This must be at least $200, but you can pay up to $2,500 if you’d like a more forgiving credit limit.

Note that it’s better to get a higher credit limit (so long as you can still keep your spending in check), because this can help your credit score. The reason for this is that your credit score depends partly on a metric called your credit utilization rate—which represents the proportion of your available credit you’re using—where lower credit utilization is better for your credit score.

Because a higher credit limit makes it easier to maintain a lower credit utilization rate, it can be better for your credit score.

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Benefits

Enjoy the following standard Citi credit card benefits:

Citi Flex Plan

The Citi Flex Plan offers alternative ways to pay off your purchases or to borrow money:

1. Citi® Flex Pay is a payment plan that lets you pay off eligible credit card purchases over a fixed period. You’ll get a fixed interest rate, and according to some reports online, payback periods of up to four years.
2. The Citi® Flex Loan is a way to take out a loan using the available credit from your Citi® Secured Mastercard®. It’s a bit like getting a credit card cash advance, except that the Citi® Flex Loan has a fixed interest rate and a fixed monthly payment for the duration of the loan (which will be between 12 and 60 months). 1

These two options give you some of the benefits of a normal loan (e.g., predictable payments) without the need for credit checks or applications. However, your available credit will be reduced by the amount of the Flex Loan or Flex Pay balance.

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How to Get a Citi® Secured Mastercard®

Credit Score Required

The Citi® Secured Mastercard® website says that the card is “designed specifically for people who are new to credit or want to build their credit,” and it also recommends the card if you’re looking to “establish, improve, or rebuild your credit.” 2

This means that you may be eligible even if you have a bad credit score (i.e., a FICO score under 580), limited credit, or no credit score at all.

How to Apply

You can apply for the Citi® Secured Mastercard® online. Citi will decide whether to approve you for the card based on several considerations:

• They will review your income and debt.
• They will review any available credit history you have.
• They will review any other information available about your creditworthiness.
• They will require you to have no pending bankruptcies or bankruptcies from the last two years.
• They will require a security deposit.

As with any credit card, Citi may reject your application depending on the information from the application you provide or from your available credit history.

Building Credit

Security Deposit

When you open a secured credit card, it’s better for your credit utilization rate—and thus also for your credit score—if you pay a higher deposit to get a higher credit limit. However, if you’ve had trouble monitoring your spending on credit in the past, opt for a lower credit limit that won’t tempt you to spend beyond your means.

Credit Reporting

The information that lenders pass on to the credit bureaus is used to update your credit score, so if you’re trying to build credit, it’s important to look for cards that report to as many of the major credit bureaus as possible—ideally all three of them.

Tips for Credit Building

As your Citi card will report your credit activity to all of the major credit bureaus, it’s particularly important to be careful about how you use your card.

Here are three tips to help you build credit with the Citi card:

• Make at least the minimum monthly payment on time: If you don’t do this, you may get late payments, which are black marks on your credit history and can harm your credit score. If you pay your bills promptly, on the other hand, your credit score will improve.
• Keep your spending low: As mentioned, your credit score depends partly on the proportion of your available credit you use (i.e., your credit utilization rate). If you use less of your available credit, it helps your credit score.
• Track your progress: Citi offers cardholders free credit scores, which makes it easy for you to track your credit-building progress and see which areas of your credit report may need some work.

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FAQs

Does the Citi® Secured Mastercard® have a grace period?

Yes, the Citi® Secured Mastercard® has a grace period of 23 days. A credit card grace period is a window of time between the end of your credit card’s statement closing date and your payment due date.

If you pay your bill in full by the due date, your purchases during the grace period will be interest-free. But if you carry a balance from the previous billing cycle, you’ll pay interest at the normal rate for all your purchases during the grace period.

Can I take out cash advances with the Citi® Secured Mastercard®?

Yes, the Citi® Secured Mastercard® allows you to take out cash advances (where you use your card to take money out at an ATM or to make other cash-like transactions). However, note that there’s a fee (5% of the transfer amount or $10—whichever is greater) and that the APR is high at 28.99% (variable), meaning that you’ll end up paying a lot for this service.

Also, you’ll start accruing interest immediately when you make a cash advance, since there’s no grace period for cash advances.

Can I use the Citi® Secured Mastercard® for balance transfers?

Yes, the Citi® Secured Mastercard® allows you to make balance transfers (which is where you move your debt from one credit card to another). However, there’s a fee (5% of the transfer amount or $5—whichever is greater) and the APR is high at 26.24% (variable), so again you’ll pay a lot for this service.

Can I use the Citi® Secured Mastercard® abroad?

Yes, you can use the Citi® Secured Mastercard® abroad. However, you’ll pay a foreign transaction fee equivalent to 3% of the transaction amount each time you buy something with your card.

Does the Citi® Secured Mastercard® allow you to graduate to an unsecured card?

Yes, we contacted the Citi customer service team to confirm this, and they told us that you can graduate to an unsecured card after you’ve had the Citi® Secured Mastercard® for 18 months. After that time, Citi will do a review to see whether you’re eligible for an upgrade and a security deposit refund.

Does the Citi® Secured Mastercard® do a hard pull?

The Citi customer service team confirmed that they do a hard pull to check your credit report when you apply for this card (although if you’re a no-credit applicant, they won’t be able to do this).

How do I close my Citi® Secured Mastercard®?

To close your Citi® Secured Mastercard®, contact Citi’s customer service team at (800) 950-5114.