Green Dot might be best known for its prepaid debit cards, but the company also offers secured credit cards, which are aimed at consumers who have poor to average credit scores or a limited credit history.
So if you’ve been struggling to get approved for a credit card because of less-than-stellar credit, a Green Dot credit card might be an option.
Here are five things to know about two Green Dot Primor credit cards:
1. The cards require a refundable security deposit
A secured card functions like a regular credit card — you can use it to make purchases and then pay off the balance, or a portion of it, each month — but you must first put down a refundable security deposit.
Generally, your credit limit will be equal to that deposit.
For both cards, the deposit can vary between $200 and $5,000. (There is also a Green Dot Visa Platinum card, for which the deposit and credit limit ranges from $200 to $1,000.)
2. You’ll also owe fees
Both cards advertise no processing or application fees, but you’ll face other charges. First, you’ll owe an annual fee, which varies depending on the card. The Green Dot primor® Visa® Classic Secured Credit Card carries a $39 annual fee, and the Green Dot primor® Visa® Gold Secured Credit Card has a $49 annual fee.
(The latter card has a slightly lower potential ongoing APR. More on that later.)
Both cards also charge a foreign transaction fee of 3%, meaning neither is ideal for use internationally.
Consumers with thin or no credit might want to instead consider alternative credit cards that don’t charge such fees, such as the Petal Visa® Credit Card. It’s an unsecured card, meaning it doesn’t require a security deposit. Its annual fee is $0, and it’s the rare unsecured card that doesn’t focus solely on applicants’ FICO scores to determine creditworthiness. It also takes into account income, expenses, savings and debts.
3. The ongoing APRs are low for secured products
The ongoing APR is 9.99% for the Green Dot primor® Visa® Gold Secured Credit Card. An APR in the single digits is unusual among cards aimed at people with poor credit. That’s a reason it’s featured on our roundup of best secured cards.
The ongoing APR is 13.99% for the Green Dot primor® Visa® Classic Secured Credit Card. That’s also relatively low, and this card charges the lower annual fee of the two.
Also good to know: There is no penalty APR on either card (although paying late can still hurt your credit scores and you can be charged up to a $29 late fee.)
If you know you will carry a balance or are likely to make a late payment, one of these cards could be a fit.
4. You won’t earn any rewards
While that’s not unusual among secured cards aimed at people with poor credit, it can also be frustrating for consumers eager to use credit cards to earn cash back or rewards points.
When you’re just starting out with credit cards, rewards aren’t the most important thing — but you can still find some secured and alterative options that earn them. The Discover it® Secured, for instance, earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically (1% cash back on all other purchases). You’ll have to put down a $200 minimum deposit, but unlike these Primor cards, the annual fee is $0.
5. They can function as steppingstones to better cards
Unlike a prepaid debit card, where purchases are subtracted from the cash put down upfront, credit cards allow you to build up your credit as you pay off your purchases each month.
Just as with regular credit cards, Green Dot reports credit card behavior to credit bureaus, allowing cardholders to build their credit histories and credit scores.
Eventually, with responsible credit behavior, you may be able to qualify for cards with better features, such as rewards, no annual fee, 0% intro APR offers and other perks.