Usually, the security deposit is equal to the spending limit on the card. If you have a $500 limit, then you’ll have to deposit $500. If you don’t pay your bill one month, the bank will take your deposit to pay it. Your credit line depletes as the deposit is used. You’ll then have to provide another cash deposit to raise your credit level again. You could also look for banks that aren’t in your immediate area, but finding one close by makes paying your bill without a bank account much easier. You can just visit a branch in person and pay in cash. Capital One, Discover, and Citibank in particular offer a variety of secured cards with different fees and conditions. Smaller local banks may not have these offerings, but check local branches if you want to shop around more.
Make sure you explain that you don’t have a bank account at all, not just with another bank. The representative may automatically assume that you mean you don’t have an account with this particular bank. Most credit unions require you to have an account for a credit card, so these are not an option in most cases.
For example, Citibank’s secured card requires a minimum $200 deposit, while Capital One’s minimum deposit is $49. The Capital One card would give you a much lower credit limit, but it would be easier to make a $49 deposit than a $200 deposit. Use features like these to determine which card is best for you. Although the interest rate may not matter initially, since you made a cash deposit, some cards increase your credit limit after a few months of on-time payments without requiring another cash deposit. If this happens, you’ll be subject to an interest rate if you don’t pay the bill in full. If you’re at all confused on what each card offers, call the bank and directly ask. Customer service representatives are there to answer any questions you may have. If you’re working on building your credit back, make sure to pick a card that reports to the major credit bureaus.
Typical information on a credit card application is your address, Social Security number, job, and annual income. Fill out all the information accurately and don’t lie. Lying on a credit application could be considered fraud.
Banks use your income information to determine your credit spending limit. Banks could face penalties for granting credit limits far beyond what a person could realistically pay back.
If you pay your bill every month, then the security deposit is refundable when you close the credit card. If you get rejected, ask the bank for an explanation. You can use this information to improve your application to a different bank.
Remember that without a bank account, you can’t make instant transfers to pay your bill. Always pay at least a few days before the due date to make sure the payment processes in time. Paying on time is also extremely important for keeping your credit score up. If you’re working on rebuilding your credit, pay close attention to payment due dates. Once your credit score reaches a certain level, your bank may allow you to upgrade to an unsecured, normal credit card. Take advantage of this to have a higher credit limit and get your deposit back.
The bank may also accept money orders. Ask a teller if this is possible.
Remember that you can only buy money orders with cash or a debit card. The payment will take a few days to get to the location. Mail the payment a few days to one week ahead of time to make sure it reaches the destination by the due date.
Check if your card provider takes part in this program before trying to pay your bill. The app lets you pick a 7-Eleven as your main location for paying bills. Set this location to make paying your bills easier.
