When you find yourself with a bad credit score on your hands, it can be difficult to start fixing it.
Many card companies offer a way out through what is known as secured credit cards. These cards don’t put nearly the same emphasis on credit scores.
But what happens when you need a credit card but don’t have the funds available to put down a security deposit? The First Digital Mastercard® aims to serve people with bad credit without requiring a deposit.
The main draw of the First Digital Mastercard® is the ease of approval.
Applicants are very likely to be approved, regardless of their prior credit history. Bad credit or a lack of credit altogether won’t stop you from being approved in most instances.
This gives you a rare opportunity to get out from under your credit score. You don’t have to have a solid foundation to build your credit with the First Digital Mastercard®. You just need to use it wisely.
The application process for the First Digital Mastercard® is straightforward.
All you have to do is provide a bit of basic information about yourself. Punch in your birthday, your social security number, and a few other quick data points, and your application is ready to submit.
The entire process takes a matter of minutes and can be done stress-free from your phone or computer.
The First Digital Mastercard’s annual fee is reasonable, especially after the first year.
Initially, you’ll have to pay $75 to use your card. After the first year, though, that fee drops down to $48.
This is significantly cheaper than the annual fees of many similar unsecured credit cards aimed at credit-building.
Because this is one of the only unavoidable fees you face with credit cards, it makes sense to try to find the lowest annual fees possible.
A major downside of the First Digital Mastercard® is its staggeringly high APR.
At 35.99 %, the interest rate you face if you don’t pay off your balance in full is nearly twice that of most other cards.
If you cannot pay off your balance, an interest rate this high can launch you into a debt spiral that is very hard to battle.
If you have any doubt about your ability to pay off your balance each month, look elsewhere. Doing so with the First Digital Mastercard® is very risky.
One of the biggest reasons people use credit cards is that they offer rewards like cash back.
Unfortunately, the First Digital Mastercard® offers nothing in the way of rewards. You won’t earn cashback or discounts in any form.
While this may not seem like a big deal, it’s important to consider the opportunity cost of using this card. If you were to use a card that did offer rewards, you’d be making a bit of your money back.
By opting to use the First Digital Mastercard® instead, you’re essentially sacrificing the money you could save with other cards.
Like the First Digital Mastercard®, the Secured Mastercard® from Capital One® is a card aimed at helping you build your credit up.
The Secured Mastercard® from Capital One® requires an initial deposit of $49 to gain access to your credit line. This is lower than the $95 one-time fee you pay with the First Digital Mastercard®.
Additionally, there are no annual fees for the Capital One® secured credit card, making it a much better deal than the First Digital Mastercard® with both its annual and monthly fees.
The First Digital Mastercard® does offer a slightly larger credit line initially though The Capital One® secured card only offers $200, whereas First Digital’s card offers $300.
As far as APR goes, the Capital One® secured credit card is the clear winner. The APR is 26.99 %.
While still high, this is nearly 10 % below that of the First Digital card.
Both cards are pretty easy to qualify for, and seeing that the Capital One® secured card is cheaper in almost every way, it makes sense to try for that one first in most instances.
The Citi® Secured Mastercard®is another secured card in competition with the First Digital Mastercard®.
The upfront deposit for the Citi® Secured Mastercard® is 200 dollars. Seeing as you have to pay a $95 one-time fee and a $75 annual fee for the First Digital card, this makes the two pretty comparable.
After you pay that initial deposit, though, the Citi® Secured card won’t charge you an annual fee.
The Citi® secured card also offers a much lower APR, averaging 22.49%.
While the Citi® Secured Mastercard® is clearly the more financially sound option, it is harder to qualify for. If you have very poor credit, you may not get approved.
As such, those in that scenario might need to stick to the First Digital Mastercard® to build their credit.
The OpenSky® Secured credit card is a flexible secured card. You choose your initial deposit, which dictates your overall credit line after that.
The minimum deposit is $200, and there is a $35 annual fee as well. This makes the OpenSky® card a bit more expensive up-front, but only by $65.
The big differentiator is that you can get the $200 deposit back, whereas all the fees for the First Digital card are simply gone after you pay them
This card also has the benefit of not doing a hard pull-on the applicant. This means your credit score won’t be impacted when you apply with OpenSky®.
The OpenSky® card has an APR that is significantly lower than the First Digital cards. At 17.39 %, this is not only lower than the First Digital Mastercard®’s but most credit-building cards on the market.
The Discover It® Secured Credit Card uses an initial deposit to secure your credit line as with all secured cards. The deposit starts at $200, but you are free to deposit more if you want an extended line of credit.
There is no annual fee for using the Discover It® secured card. This stands in stark contrast to the annual and monthly fees for the First Digital card.
The Discover It® secured card also offers rewards ranging from 1-2 % cash back on purchases. This gives it a decided edge over much of the competition, as many credit-building cards offer no rewards at all.
That being, you may not qualify for the Discover It® secured card if you have really bad credit. While still easy to qualify for, the Discover It® Secured credit card is slightly pickier than other credit-building cards.
While the First Digital Mastercard® may be helpful in some instances, it’s too expensive for us to recommend for most people.
There is no minimum credit score required for the First Digital Mastercard®.
The annual fee starts at $75 a year for the first year. After that initial year, it drops to 48 dollars annually.
While the First Digital Mastercard® can be helpful for those with bad or no credit, it comes with a lot of drawbacks.
The card is riddled with fees that make it very expensive just to acquire and hold. Additionally, the APR is startlingly high, well above the market average.
If you need to build your credit, you’re probably better off looking at other cards.