Wells Fargo Secured Credit Card review

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Note: Wells Fargo is no longer accepting new applications for this card

If you have a lot of cash available, but are stuck with a poor credit score, the Wells Fargo Secured Visa card could offer a useful lifeline for rehabilitating your credit.

Unlike most secured cards, it allows cardholders with deep pockets to obtain a credit line as high as $10,000 – if they can afford to match that credit line with an equally big deposit.  Such an unusually flexible credit limit could help you rebuild your credit faster than if you were stuck with a lower limit.

However, cardholders with smaller budgets are less likely to find this card useful – especially compared to other options.  Although its annual fee is lower than some competitors, it requires a steep deposit just to qualify, and it doesn’t offer any additional credit beyond matching your deposit.

Here’s what else you should know about the Wells Fargo Secured card:

Large deposit required

If you don’t have a lot of savings, you could find that you’ve been priced out of the Wells Fargo Secured Visa before you’ve even applied. It requires an unusually high security deposit – a minimum of $300 – just to qualify.

In turn, Wells Fargo only gives you an additional $300 to add to your credit line. Many competitors, by contrast, require much less money upfront to open a new card. Some secured cards require as little as $49 to open an account with a $200 credit line. Others require $100 to $200 to open an account.

A potentially high credit limit

Like many secured cards, the Wells Fargo Secured Visa determines cardholders’ credit limits by matching whatever a cardholder puts down as a deposit. For cardholders who can only afford to put down the minimum deposit, this is a big drawback since it sharply limits how much credit they have available. But for cardholders who can afford to temporarily part with several thousand dollars, the Secured Visa’s flexible credit limit is much more attractive.

Wells Fargo allows you to secure up to $10,000, which is an unusually high amount for a secured card. Many competitors, by contrast, cap deposits at $2,500 to $5,000. Such a high limit could significantly boost your credit score – especially if you avoid carrying a big balance. A high credit limit, paired with a low balance, can significantly enhance your debt-to-limit ratio – an important marker for a good credit score.

No rewards

Like many secured credit cards, the Wells Fargo Secured Visa card doesn’t offer a rewards program. So, you may not want to use this card for everyday spending. Instead, if you’re interested in rewards, you may want to check out other secured cards, such as the Discover it® Secured Credit Card, the SunTrust Secured card with cash rewards or a secured travel rewards card from U.S. Bank.

Reasonable annual fee

Compared to some of its competitors, Wells Fargo’s annual fee is relatively low. It charges just $25 a year. Some secured cards, by contrast, charge fees as high as $35 to $49. However, you may still want look elsewhere if you’re looking for a long-term card to help jumpstart your credit history. If you want a card you can keep on your credit record for years, you’re better off picking a no-annual-fee credit card.

Not a great card for carrying a balance

Unfortunately, like most subprime cards, the Wells Fargo Secured card does charge a relatively high APR. Cardholders who carry a balance are charged 20.74 percent, which can add up fast if you carry a big balance.

That said, the Wells Fargo card’s APR is several points lower than the APRs charged by several of its competitors. So, you may find that you can actually get a better deal with this card than you can get with other cards.

Also, unlike cards that advertise a wide range of APRs and only give the card’s lowest rate to a tiny fraction of applicants, this card awards the same rate to everyone who qualifies for it. As a result, you’ll know what you’re getting ahead of time when you sign up for the Wells Fargo Secured card.

Above average fees and penalties

You’ll want to avoid this card, though, if you plan to use it for a balance transfer or occasional cash advances. It charges some of the highest fees around. For example, a single balance transfer can cost up to 5 percent of the total balance – well above what many cards charge. A 3 to 4 percent balance transfer fee is more typical, even for secured cards.

The Wells Fargo card also charges up to 5 percent for cash advances and inflicts a 25.74 percent APR on whatever amount you withdraw. In addition, the Wells Fargo card charges a 3 percent foreign transaction fee and up to $37 in late charges.

On the plus side, the Wells Fargo Secured card doesn’t charge a penalty rate, so you don’t need to worry about having your APR skyrocket if you fall behind on payments.

Wells Fargo Secured card benefits

Unlike some competitors, the Wells Fargo Secured card does offer some fairly good benefits, including:

• Zero liability protection – You aren’t responsible for paying for any unauthorized transactions on you card, as long as they’re reported promptly.
• Car rental insurance – The card covers you in the case of damage or theft of a vehicle that you rent with the card, as a supplement to other insurance policies.
• Roadside dispatch – Wells Fargo provides emergency roadside services to cardholders, for a set price.
• Cell phone protection – The card covers two claims per year of damage or theft of a cell phone purchased with the card (with a $25 deductible), up $600 per occurrence and up to $1,200 per year.
• Travel and emergency assistance – Cardholders receive emergency travel services –including medical and legal referrals, transportation, emergency card replacement and ticket replacement – for no fee.
• Travel accident insurance – Cardholders are eligible for up to $150,000 in insurance for accidental death or dismemberment on a trip purchased with the card.

Approval odds

The Wells Fargo card is designed for consumers with poor credit and limited credit histories and so should be fairly easy to get, as long as you have at least $300 to deposit. Even foreigners can qualify for this credit card, so, if you’re new to the country and are struggling to get approved for credit, this may be a good card to start out with as you build your brand-new credit history.

Why get the Wells Fargo Secured card?

• You have access to a large amount of cash that you can put down as a deposit.
• You want an unusually big credit line and can put down several thousand dollars to secure it.
• You have poor credit and can’t get a lower APR on other cards.
• You’re new to the country and are looking for a card to jumpstart your credit history. 

How to use the Wells Fargo Secured card

• Take advantage of the card’s flexible credit limit by putting down as much cash as you can afford. The more money you put down, the more credit Wells Fargo will extend you.
• Don’t use this card for balance transfers and cash advances. The card’s fees are well above the industry average.
• Avoid carrying a large amount of debt on this card since the APR is relatively high and always pay more than the minimum amount due.
• Once you’ve used the card for a while, ask Wells Fargo if it will upgrade you to an unsecured card without an annual fee.

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