A secured credit card, such as the Massachusetts Institute of Technology Federal Credit Union Classic Secured Visa credit card, offers you the ability to rebuild your credit or establish credit for the first time without having to have your credit report accessed.
Find out about available credit cards for FREE using the tool on this page!
Every time a potential creditor accesses your credit report it has the potential to reduce your credit score. If you already have bad credit, then choosing a secured credit card prevents this from happening, allowing you to concentrate on building your credit.
How the MIT Federal Credit Union Classic Secured Visa Credit Card Works
To get this credit card, you first need to open an account with the MIT Federal Credit Union. In order to become a member, you have to be a student or staff member at MIT, or live with someone who is a student or staff member at the school.
In addition, the MIT FCU provides a list of companies that are under contract with MIT Technologies and whose employees also qualify for membership to the credit union. There are also exceptions for individuals that are married to current or former members.
There are actually two MIT Federal Credit Union secured Visa cards: the Secured Classic and the Secured Platinum Visa. A major difference between the two is that, in order to qualify for the classic credit card, you have to have a minimum of a $500 deposit. For the platinum credit card, you have to have a minimum deposit of $5,000.
The classic credit card has a maximum credit limit of $5,000, while the platinum credit card has a maximum of $15,000. In order to reach the maximum credit limit you do have to have an equal amount of money in your savings account that is designated solely for your credit card. The Federal Reserve calls this a “cash security deposit.”
Once you have made your deposits and gotten your credit card, you use your secured credit card like any other credit card. As you use your credit card, the money in your account is not being reduced; instead, you’re borrowing money for use of your credit card. Every month you’ll be expected to pay a bill to repay your credit debt.
The MIT Federal Credit Union Classic Secured Visa Credit Card and Credit Reporting
The purpose of using a credit card like this is to rebuild your credit, or to build it for the first time. When you use a secured credit card, the credit card company reports to the three major credit bureaus, which are Experian, Equifax, and Trans Union.
As with any credit card, if you make a late payment, this is reported to the credit reporting companies. On-time payments are reported as an account in good standing, which helps your credit. In addition, having a high credit line without maxing out your credit also reflects positively on your credit score.
If you default on your loan, even though that credit card is secured with cash, this will be reported on your credit report.
It will be reflected as an account defaulted but paid off. You can close your account without having a default status, but it will be reflected as a closed account on your credit report, which can actually negatively affect your credit score.
Overall, a good rule of thumb is to treat your secured Visa credit card just like you would a regular credit card. Make your payments, keep your spending totals low, and bide your time until you can establish good enough credit to get a regular credit card.
MIT FCU Classic Secured Visa Credit Card Interest and Other Details
The interest rate of your Classic Secured Visa credit card will depend upon which credit card you choose. The Classic Secured Visa has an interest rate of 10.99%. The Visa Platinum Secured credit card has an interest rate of 8.99%.
All of the other fees for these two credit cards are exactly the same. There is a penalty APR of 16.99% if your credit card payment is late two months in a row. Your original APR can be reestablished by making six months of on-time payments. However, the MIT FCU reserves the right to maintain the 16.99% APR, even if you do make six on-time payments.
A major plus for this credit card is that there are no maintenance fees or annual fees. Many banks have a monthly maintenance fee of between $3 and $10 or an annual fee in order to own a secured credit card.
There is a foreign transaction fee of 1%, as well as a late payment/return payment fee of $25.
Secured credit cards aren’t for everyone. If you’ve established good credit already, there’s no need for you to secure your credit card with the bank account. If, however, you have no credit or bad credit, then a secured credit card can be an excellent option.
Use the FREE credit card chaser tool right now!
- Baton Rouge Telco Federal Credit Union Visa Classic Secured Credit Card
- FirstLight Federal Credit Union Secured Visa Platinum Credit Card
- Justice Federal Credit Union Secured Visa Classic Credit Card
- Robins Federal Credit Union Visa Classic Secured (Variable) Credit Card
- Eastman Credit Union Visa Secure Credit Card
- American Airlines Federal Credit Union Visa Platinum Secured Credit Card
- Kinecta Federal Credit Union Visa Platinum Share-Secured Credit Card