What the First Savings Credit Card is and how it works
The First Savings Credit Card is a secured credit card issued by Comenity Bank. You put down a cash deposit — typically between $300 and $2,500 — and that deposit becomes your credit limit. You then use the card like any other credit card, making purchases and paying a monthly bill. The deposit stays in a separate savings account and is not touched unless you stop paying your bill.
The card charges an annual fee (the amount varies by the specific version of the card) and a variable interest rate. Because you are putting up collateral, the card does not require a credit check or a minimum credit score to open. The goal is to build payment history: if you use the card responsibly and pay on time each month, the issuer may eventually convert it to an unsecured card and return your deposit.
This card sits in the "bad credit" category because it is designed for people rebuilding credit or starting from scratch. It is not a rewards card, and the terms are not competitive with cards for people with established credit. The trade-off is access: if you cannot get approved for anything else, this card can give you a way to demonstrate reliability to lenders.
Key Takeaways
- Your cash deposit becomes your credit limit, so you control how much you are willing to risk upfront.
- The card reports to all three credit bureaus (Equifax, Experian, and TransUnion), so on-time payments build your credit history directly.
- Annual fees and interest rates are higher than unsecured cards, making this an expensive way to borrow if you carry a balance month to month.
- The deposit is held in a savings account and returned to you when the card is closed or converted to unsecured status, not forfeited for missed payments.
What it costs: fees and interest rates
The First Savings Credit Card charges an annual fee that is deducted from your account once per year. The exact amount depends on which version of the card you are offered, but it typically ranges from $35 to $95. This fee is charged whether you use the card or not.
The interest rate (APR) is variable and typically starts in the mid-to-high range — often 18% to 24% or higher, depending on your creditworthiness at the time of process. If you carry a balance from month to month, interest accrues daily on the unpaid amount. For example, a $500 balance at 20% APR costs roughly $8.33 per month in interest alone.
Because the annual fee and high interest rate make this card expensive to use for borrowing, the card works best if you treat it as a tool for building credit, not as a source of credit. Pay off your full balance each month to avoid interest charges, and the only cost you bear is the annual fee — which is the price of access to credit reporting and the opportunity to rebuild your score.
How the deposit works and when you get it back
When you open the card, you choose your deposit amount between the minimum and maximum the issuer allows. This deposit is held in a separate savings account in your name and earns a small amount of interest (usually less than 1% annually). Your credit limit equals your deposit amount — if you deposit $500, your limit is $500.
The deposit is not used to pay your bill if you miss a payment. If you fail to pay, the issuer reports the delinquency to the credit bureaus and may eventually close the account, but they do not automatically take the deposit. However, if your account goes to collections or you default, the issuer may explore the deposit to what you owe.
You get your deposit back when you close the account in good standing or when Comenity Bank converts your card to an unsecured card. Conversion typically happens after 6 to 18 months of on-time payments, though there is no may provide. When conversion happens, your credit limit may increase, the annual fee may drop, and your deposit is returned to you by check or direct deposit.
How using this card affects your credit score
The First Savings Credit Card reports to all three major credit bureaus — Equifax, Experian, and TransUnion — so every payment you make (or miss) shows up on your credit report. This is the primary reason to use the card: to build a record of on-time payments, which is the single largest factor in credit scoring.
Your credit utilization — the percentage of your limit you are using — also affects your score. If your limit is $500 and you carry a $250 balance, your utilization is 50%. Credit scoring models favor lower utilization, so keeping your balance well below your limit helps your score more than maxing out the card and paying it off each month.
Missed or late payments damage your score significantly and stay on your report for seven years. A single 30-day late payment can drop your score by 100 points or more, depending on your current score. Because the whole point of this card is to demonstrate reliability, missing payments defeats the purpose and makes it harder to move to an unsecured card.
Comparing the First Savings card to other secured cards
Other banks offer secured cards with similar structures: Capital One Secured, Discover Secured, and U.S. Bank Secured are common alternatives. The main differences are the deposit range, annual fee, interest rate, and likelihood of conversion to unsecured status.
Capital One Secured, for example, has no annual fee and reports to all three bureaus, making it cheaper to use than First Savings if you are comparing annual costs. Discover Secured offers cashback rewards (1% on all purchases) and may convert faster. U.S. Bank Secured has a lower starting APR for some applicants. The trade-off is that some of these cards have higher minimum deposits or stricter approval criteria.
The best choice depends on your situation: if you want the lowest annual cost, Capital One is often cheaper. If you want to build credit while earning a small reward, Discover may be better. If you have already been denied by other issuers, First Savings may be your only option. Compare the terms of cards you are actually approved for, not just the advertised terms.
When this card makes sense and when it does not
The First Savings Credit Card makes sense if you are rebuilding credit after a negative event (late payments, collections, bankruptcy) and need a way to demonstrate new, responsible behavior. It also makes sense if you are new to credit and have no history to show lenders. In both cases, the card gives you access to credit reporting when other cards will not.
The card does not make sense if you already have access to unsecured cards with lower fees and rates. It also does not make sense if you plan to carry a balance month to month — the combination of annual fees and high interest rates makes it an expensive way to borrow. And it does not make sense if you cannot commit to paying on time every month, because missed payments will damage your credit further and make conversion unlikely.
Before you open this card, ask yourself: Am I using this to build credit history, or am I using this to borrow money? If the answer is the second one, look for a personal loan or a lower-rate option instead. If the answer is the first one, and you can afford to pay the full balance each month, this card can work.
Frequently Asked Questions
Can I use the First Savings card right away after opening it?
Yes. Once your deposit clears and your account is set up, you can use the card when ready. There is no waiting period. Most people receive their physical card in the mail within 7 to 10 business days, though you may be able to use a digital version sooner through the issuer's app.
What happens if I miss a payment?
A missed payment is reported to the credit bureaus and damages your credit score. If you are 30 days late, the issuer reports it as a late payment. If you are 60 or 90 days late, the damage is worse. The issuer may close your account and may eventually explore your deposit to the debt, though they typically try to collect from you first.
How long does it take to convert to an unsecured card?
Conversion typically happens between 6 and 18 months of on-time payments, but there is no set timeline. Comenity Bank reviews accounts periodically and decides whether to convert based on your payment history and credit score. Some people convert faster than others; there is no way to force the process.
Can I increase my credit limit without adding more money?
Not with a secured card. Your limit is tied to your deposit. If you want a higher limit, you would need to add more money to your deposit account. Once the card converts to unsecured status, the issuer may increase your limit without requiring additional deposits.
Is the interest I earn on my deposit taxable?
Yes. The interest earned on your deposit savings account is reported to the IRS on a 1099-INT form if it exceeds $10 in a calendar year. The amount is typically very small (less than $1 per year on most deposits), but it is technically taxable income.