USAA Secured Credit Cards Review: Pros and Cons


Your financial mobility depends not just on your income and how well you can budget. It also depends, in large part, on your credit. Without good credit, applying for a mortgage can be unnecessarily tough. Improving your credit score isn’t always easy. Many opportunities to get credit, and thus use it to improve your score, can be closed off to you. It can be just as difficult for those with no credit score.

Secured credit cards are one of the most effective tools available for helping those struggling to improve their credit score. USAA Secured Credit Cards are one of the options available. Building or rebuilding your credit is all about choosing the right card for you, taking into account the fees, rates of interests, and the other pros and cons. The cards that help make the process of credit repair easier and help you bump up that score are the cards that you want to rely on.


With that in mind, we’re going to help you look at the different credit card options available to help you figure out the best one. Here, we’re taking a closer look at USAA Secured Credit Cards, the benefits, the drawbacks, and the details that help you figure out whether it’s the right option for you.

About USAA Secured Credit Cards

USAA is primarily a financial service and resource built for those who are or have been members of the US Armed Forces and their families. Their Secured Credit Cards are designed to be available to those with low or no credit scores, helping them build the history of responsible credit use that opens up options to further credit.  They have credit cards available with both Visa and American Express, both of which are only available to members of USAA. They have a quick and easy questionnaire available on their site that allows you to see whether or not you are qualified to join.

USAA Secured Credit Card’s work by opening a 2-year Certificate of Deposit. Instead of going through a credit check, you make a security deposit of anywhere between $250 and $5,000. This security deposit is locked in for two years, and you get it back at the end of that period. This deposit acts as your borrowing limit. If you made a deposit of $500, for instance, you can use the credit card for expenses totaling up to $500 in total, and you make repayments on the amount spent every month. Your credit card use is shared with all the major credit bureaus, helping you build your credit score and establish the report that can help you open more lines of credit in future.

Related: OpenSky Credit Card Review


The important details

Here are some of the key details, including rates and fees, of the USAA Secured Credit Cards:


  •         Credit limit: $200 – $5,000
  •         APR: 10.15% – 20.15%
  •         Penalty APR: None
  •         Processing fee: None
  •         Annual fee: $35
  •         Monthly service fee: None
  •         Late fee: Initial fee of $25, raised to $35 for all late payments following the first offense

The pros of USAA Secured Credit Cards

All credit cards come with their own pros and cons. You should use the card with the pros that best fit how you intend to it. Here are the benefits of using USAA Secured Credit Cards.

  •         USAA Secured Credit cards have recently implemented a cash reward system. At the end of a calendar year, you can earn rewards based on how much you have spent during that year. For instance, if you make qualifying purchases up to $5,000, you get 0.45% of the money spent back. For purchases over $5,000 but under $10,000, you get $22.50 back plus 0.45% of purchases made with the next $5,000. It’s a confusing system, but it essentially rewards you more if you’re willing to use the card more.
  •         USAA offers a host of benefits specifically for those who are part of the US Armed Forces. A lower APR of 4% for up to 12 months for customers during deployment or PCS and rebates for finance charges whiles you’re serving in a military operation are some examples.
  •         A choice between Visa and American Express. American Express offers slightly more perks, such as a concierge service, but Visa is more broadly accepted by businesses and services.
  •         There are no foreign transaction fees, which means that you use these cards on international purchases without any additional costs.
  •         The card also includes collision damage waiver coverage for rental vehicles with includes theft protection, as well as travel accident insurance for you and your family. You are covered up to the amount of your original security deposit.
  •         All purchases you make using USAA Secured Credit Cards come with an extended warranty, covering you for repair costs after the retailer or manufacturer’s guarantee has expired.
  •         The cards also come with identity theft assistance. In many cases where your personal or financial information is stolen or used for fraud, USAA can help you resolve it.
  •         The quick and easy questionnaire makes the process of seeing whether you apply for credit card application much simpler than other providers.

Related: Surge Credit Card Review: Pros and Cons

The cons of USAA Secured Credit Cards

Of course, where there are benefits, there are also drawbacks. Take a look at some of the cons mentioned here and try to determine whether and how much they might interfere with your ability to use the card effectively:

  •         The APR for customers not on deployment or  PCS ranges between 10.15% and 20.15%, with a 3% transfer fee makes USAA Secured Credit Cards slightly more expensive to use than they once were, given that their APR used to be less than 10%. They have an annual fee of $35, which ranks them slightly above the average for secured credit cards, but not too much more. APR only applies if you carry a balance with the card, which you don’t necessarily have to do.
  •         The rewards scheme, while nice, is confusing and isn’t marketed with the greatest clarity on their service page. The USAA site lists that you can earn rewards of up to 1.25% cash back. However, you would have to spend over $17,000 in a single year to reach that particular perk so it’s not going to be capitalized on by many of the card’s users.
  •         Your security deposit is tied up in an inaccessible account for two years. This is a long time to wait for money that’s yours while you can’t spend it. However, the upside to this is that the longer deposit terms are even better for your credit score in the end.
  •         Based on the current information, it doesn’t seem like USAA secured credit cards evolve into unsecured credit cards. You can still apply for an unsecured credit card from USAA or other providers, but it is a slight downside.
  •         There are few rewards and no free perks with this card, such as miles or points on a reward system. If you want to benefit from their rewards scheme, you have to use the card and confront the APR directly.

Tips for the using the USAA Secured Credit Cards

Secured credit cards are only as effective a tool as those who use them. To make sure that you build your credit safely and effectively. Here are a few tips on how to make sure your use of USAA Secured Credit Cards goes without a hitch.

  •         Ensure you pay your entire balance by the due date each month to avoid the APR.
  •         Avoid the 3% transaction fees on cash advances, which are waived when you use an electronic transfer for funds between your USAA credit card to your USAA bank deposit account.
  •         Make sure that you deposit only as much as you can afford to be without for two years when you first apply for the credit card and stay within the spending limit that matches the security deposit

These secured credit cards can be an effective way to improve your credit score, just ensure that you’re using them wisely.

Related: Primor Credit Card Review


The bottom line

USAA Secured Credit Cards are an effective and safe tool for building credit, with some impressive perks for US Armed Forces members, living up to their central focus. With a high credit limit and plenty of additional insurance and protections, it’s one of the best secured credit cards we have taken a look at thus far.

That said, its availability is much more limited than other card providers, requiring you to be a member of USAA amongst other requirements. What’s more, the two-year security deposit period may be too long for those who are uncertain of leaving their money in an inaccessible account for so long, and the lack of graduation to a secured credit card is another one of their major downsides.

Overall, however, it’s worth considering USAA Secured Credit cards if you do qualify for them, just make sure you use them wisely so you don’t fall afoul of APRs that, while they do fit the industry standard at the moment, aren’t as advantageous as they used to be.