Premier Credit Cards Are Designed for People Building or Rebuilding Credit
A Premier credit card is a secured credit card — meaning you put down a cash deposit that becomes your credit limit. If you have limited credit history, a low credit score, or past credit problems, a Premier card can help you demonstrate responsible borrowing to lenders. The card reports your payment activity to the three major credit bureaus (Equifax, Experian, and TransUnion), so on-time payments build your credit record over time.
The card itself works like any other: you charge purchases, receive a monthly statement, and pay what you owe. The difference is that your deposit sits in a savings account held by the card issuer. You cannot touch that money while the account is open, but it protects the card company if you stop paying. After you show consistent, on-time payments — usually 6 to 18 months — the issuer may convert your card to an unsecured card, return your deposit, and raise your credit limit.
Key Takeaways
- A Premier secured card requires a cash deposit ($200 to $2,500 depending on the issuer) that becomes your starting credit limit.
- Your monthly payments are reported to all three credit bureaus, so responsible use builds your credit score over time.
- You pay an annual fee (typically $25 to $99) in addition to interest on any balance you carry month to month.
- After 6 to 18 months of on-time payments, many issuers will convert your account to a standard unsecured card and return your deposit.
- The card has no rewards program, so it is best used as a credit-building tool rather than for earning cash back or points.
How the Deposit and Credit Limit Work
When you open a Premier card, you choose how much to deposit — usually a minimum of $200 and a maximum of $2,500. That deposit amount becomes your credit limit. If you deposit $500, you can charge up to $500 per month. The deposit earns little to no interest while it sits in the issuer's account.
Your deposit is separate from your monthly bill. If you charge $300 and pay it in full by the due date, your deposit stays untouched and your credit limit resets to $500 the next month. If you carry a balance, you pay interest on that balance — but the deposit itself is not touched. The deposit only gets used if you stop paying your bill entirely and the issuer applies it to your debt.
Fees and Interest Rates You Will Encounter
Premier cards charge an annual fee that ranges from $25 to $99 depending on which Premier product you choose. This fee is charged once per year, usually on your account anniversary or your first statement. Some issuers charge the fee upfront; others add it to your first bill.
The card also carries an interest rate (called the APR, or annual percentage rate) that applies if you carry a balance from month to month. Because these cards are designed for people with lower credit scores, the APR is typically higher than cards for people with excellent credit — often between 18% and 24%. If you pay your full statement balance by the due date each month, you pay no interest. Interest only applies to balances you carry forward.
Some Premier cards also charge a one-time processing fee when you first open the account, usually $25 to $50. Read the card's terms before you explore so you know all the costs upfront.
When Your Card Converts to Unsecured and You Get Your Deposit Back
The goal of a secured card is to graduate to an unsecured card. After you make on-time payments for 6 to 18 months (the timeline varies by issuer), the card company reviews your account. If your payment history is clean, they may offer to convert your card to a standard unsecured card, increase your credit limit, and return your deposit.
You do not have to ask for this — the issuer will contact you when you are may be able to access. However, the conversion is not automatic. If you have missed payments, paid late, or maxed out your card repeatedly, the issuer may not convert your account. In that case, you keep the secured card and can try again after another 6 to 12 months of good payment behavior.
When your deposit is returned, it arrives as a check or a transfer to your bank account, depending on the issuer. The return of your deposit does not close your account or hurt your credit score — your credit history with that card continues to help your credit profile.
How to Use a Premier Card to Build Credit
A Premier card only helps your credit if you use it responsibly. The most important step is to pay your full statement balance by the due date every single month. Payment history makes up 35% of your credit score, so even one late payment can damage the progress you are building.
Second, keep your balance low relative to your credit limit. If your limit is $500, try to charge no more than $100 to $150 per month. This shows lenders that you can borrow without overextending yourself. The ratio of your balance to your limit (called credit utilization) makes up 30% of your credit score.
Third, use the card regularly but not constantly. Charge a small purchase every month — a gas fill-up, a coffee, a subscription — and pay it off. Inactivity can lead the issuer to close your account, which hurts your credit history. But maxing out the card every month signals financial stress to lenders.
Premier Card vs. Other Credit-Building Options
A secured card is not the only way to build credit. Some people use a credit-builder loan, which is a small loan designed specifically to help you establish a payment history. You borrow $500 to $1,000, make monthly payments, and at the end the lender releases the money to you. The payments are reported to credit bureaus just like a credit card payment would be.
Others become an authorized user on someone else's credit card account. If that person has good credit and pays on time, their payment history can boost your credit score without you having to open your own account. However, this only works if the primary cardholder's account is in good standing.
A secured card is useful if you want to build credit while also having access to borrowing. A credit-builder loan is useful if you want to avoid the temptation to overspend. An authorized user account is useful if you have a trusted family member or friend with strong credit who is willing to add you to their account.
What Happens If You Miss a Payment or Default
If you miss a payment, the card issuer will report it to the credit bureaus, and it will appear on your credit report for seven years. A single late payment can drop your credit score by 50 to 100 points, depending on how late the payment is and your overall credit history.
If you miss a payment by 30 days or more, the issuer may charge a late fee (typically $25 to $35) and raise your interest rate. If you miss payments for 60 to 90 days, the issuer may close your account and send your debt to a collection agency. At that point, your deposit may be applied to what you owe, but you could still owe money after the deposit is exhausted.
If you know you cannot make a payment, contact the card issuer before the due date. Some issuers offer hardship programs or temporary payment deferrals. It is always better to ask for help than to miss a payment and damage your credit.
Frequently Asked Questions
Can I use a Premier card right away, or do I have to wait for approval?
Once your deposit clears — usually 3 to 5 business days after you open the account — you can use the card when ready. You do not have to wait for a physical card to arrive in the mail; many issuers offer a temporary card number you can use online or over the phone while you wait for the plastic card.
What if I want to close my Premier card account?
You can close the account at any time by calling the issuer. When you do, your deposit will be returned to you, usually within 5 to 10 business days. However, closing the account removes that credit history from your active accounts, which can lower your credit score slightly. If you have graduated to an unsecured card, closing it has less impact because you still have the credit history on file.
Will a Premier card hurt my credit score when I first open it?
Opening any new credit account causes a small, temporary dip in your credit score — usually 5 to 10 points — because the issuer runs a hard inquiry on your credit report. This dip recovers within a few months as you make on-time payments. The long-term benefit of building payment history far outweighs this short-term impact.
Can I increase my credit limit on a Premier card?
Yes, but it requires depositing more money. If you want to raise your limit from $500 to $750, you deposit an additional $250. The issuer will review your account to make sure you are in good standing. Some issuers allow you to increase your limit after 6 months of on-time payments; others require longer.
Is a Premier card the same as a prepaid card?
No. A prepaid card is funded with your own money upfront, and you spend down that balance like cash. A secured credit card uses your deposit as collateral, but you borrow money each month and pay it back. A secured card reports to credit bureaus and builds your credit history; a prepaid card does not.