What the Navy Federal Secured Card Does
The Navy Federal Secured Credit Card is a secured card issued by Navy Federal Credit Union, which means you put down a cash deposit that becomes your credit limit. You then use the card like any other credit card — the deposit stays in a separate account and is not touched unless you stop paying your bill. The card reports to all three credit bureaus, so on-time payments build your credit history.
Navy Federal is a credit union, not a bank, so you must be a member to open this card. Membership is open to active-duty military, veterans, retirees, and their families, depending on which branch or service affiliation applies. If you are not already a member, you can open a membership account at the same time you open the card.
This card is designed for people rebuilding credit or starting from scratch. It is not a rewards card and does not offer cash back or points. The main benefit is the credit-building opportunity — the card reports your payment history to the bureaus each month, which is how you move toward an unsecured card later.
Key Takeaways
- You must be a Navy Federal member to open this card, which requires military affiliation or family connection to someone with military service.
- Your deposit becomes your credit limit, and the deposit amount ranges from $500 to $250,000 depending on your circumstances.
- The card charges an annual fee and a monthly maintenance fee, so the total cost of holding the card is higher than many unsecured cards.
- On-time payments report to all three credit bureaus each month, building your credit score over time.
- After a period of responsible use (typically 12 to 24 months), you may be able to convert to an unsecured card and recover your deposit.
Deposit Requirements and Credit Limits
Your deposit is the amount you can borrow. Navy Federal allows deposits from $500 to $250,000, though most people start with $500 to $2,500. The deposit sits in a savings account earning interest — currently a small amount, but it does earn something. You control the deposit; Navy Federal does not spend it unless you default on the card.
If you want a higher credit limit later, you can add more to your deposit. This is useful if you have rebuilt some credit and want more borrowing room without waiting for a conversion to an unsecured card. You can also lower your deposit if you no longer need the full limit, though you must keep at least $500 on deposit while the card is open.
The deposit is separate from the fees you pay. Even if you never use the card, you still owe the annual and monthly fees, which come out of your Navy Federal checking or savings account.
Fees and Interest Rates
The Navy Federal Secured Card charges an annual fee of $25 and a monthly maintenance fee of $5. That means you pay $85 per year just to hold the card, before you borrow a single dollar. If you carry a balance, you also pay interest on that balance — the current rate is around 18% to 20% APR, though the exact rate depends on your credit profile at the time you open the card.
The monthly maintenance fee is unusual. Most secured cards charge only an annual fee. This $5 per month adds up to $60 per year on top of the $25 annual fee, making the total yearly cost $85. If you use the card and carry a balance, interest charges will be much higher than the fees.
There is no foreign transaction fee if you use the card overseas, which is a small advantage if you travel. There is also no penalty APR — if you miss a payment, your rate does not jump to a punitive level, though you will still be charged a late fee.
How to Use the Card to Build Credit
The goal of a secured card is to show lenders you can handle borrowed money responsibly. To do this, you need to use the card and pay it on time every month. Using it means charging something — even a small purchase like a coffee — and then paying the full balance when the bill arrives. Paying the full balance keeps you from paying interest and shows the strongest payment history.
You do not need to carry a balance to build credit. In fact, carrying a balance costs you money in interest and does not build credit faster than paying in full. The credit bureaus care about whether you pay on time, not whether you owe money. Many people mistakenly think they need to carry a balance to build credit; this is false and expensive.
Use the card for small, regular purchases — groceries, gas, a subscription — and pay the bill in full each month. After 6 to 12 months of perfect payments, your credit score should improve noticeably. After 12 to 24 months, Navy Federal may convert your card to an unsecured card automatically, or you can request a conversion. When that happens, your deposit is returned to you.
Conversion to an Unsecured Card
Navy Federal does not publish a specific timeline for conversion, but most cardholders report conversion happening between 12 and 24 months of on-time payments. Conversion is not automatic — you may need to request it, or Navy Federal may contact you when they believe you are ready. The exact process depends on your account history and credit score at the time.
When you convert, your deposit is returned to your Navy Federal savings account. You keep the same card account number and payment history, so your credit history stays intact. The converted card will have different terms — usually a higher credit limit and no annual fee, though the APR may be similar to what you had on the secured card.
If Navy Federal does not offer conversion after 24 months, you can close the card and recover your deposit. However, closing the card stops the credit-building benefit, so it is usually better to keep it open even after conversion if you have no annual fee.
Who Can Join Navy Federal and Open This Card
Navy Federal Credit Union membership is restricted to military-connected people. You can join if you are active-duty military, a veteran, a retiree, a member of the Reserve or National Guard, or a family member of someone in one of these categories. Some employers and organizations also sponsor Navy Federal membership — check the Navy Federal website to see if your employer is listed.
If you are not sure whether you are may be able to access, you can contact Navy Federal directly or visit a branch. Membership is free, and opening a membership account takes about 15 minutes online or in person. You can open a membership and a secured card process at the same time.
Once you are a member, you have access to Navy Federal's other products — checking accounts, savings accounts, loans, and other credit cards. The secured card is just one option within the credit union.
Comparing This Card to Other Secured Cards
The Navy Federal Secured Card has higher fees than many competitors. A typical secured card from a bank charges only an annual fee of $25 to $50 and no monthly fee. The $5 monthly maintenance fee on the Navy Federal card adds $60 per year, making it more expensive to hold than most alternatives.
However, Navy Federal offers some advantages: the deposit earns interest, there is no foreign transaction fee, and Navy Federal members may have access to better rates on other products like auto loans or mortgages. If you are already a Navy Federal member or planning to use the credit union for other services, the higher fees may be worth it. If you are only opening an account for the secured card, you might find a lower-cost option elsewhere.
Other secured cards to consider include the Capital One Secured Mastercard (no annual fee, $200 to $2,500 deposit) and the Discover Secured Card (no annual fee, $200 to $2,500 deposit). Both report to all three bureaus and offer conversion paths. The trade-off is that you must be a Navy Federal member to use their card, but you do not need to be a member to open a Capital One or Discover secured card.
Frequently Asked Questions
What happens if I miss a payment on the Navy Federal Secured Card?
A missed payment is reported to the credit bureaus and damages your credit score. Navy Federal will charge a late fee (typically $25 to $35) and may increase your APR. Your deposit is not automatically taken — Navy Federal will pursue collection through the normal process, which may include calling you or sending statements. If you fall far behind, Navy Federal may close the account and use the deposit to cover the debt.
Can I use my deposit as collateral for a loan?
No. The deposit is held separately and cannot be borrowed against. If you need a loan, you would open a separate loan account with Navy Federal. Some credit unions offer "credit builder loans" where you borrow against your savings, but the Navy Federal Secured Card does not work this way.
Does the Navy Federal Secured Card have a rewards program?
No. This card does not offer cash back, points, or miles. The only benefit is the credit-building opportunity. If you want rewards, you would need to open a different Navy Federal card after your credit improves, or use a rewards card from another issuer alongside this one.
How long does it take to build credit with this card?
You should see improvement in your credit score within 3 to 6 months of on-time payments, assuming you have no other negative marks on your report. Significant improvement typically takes 12 to 24 months. The exact timeline depends on your starting credit score and what else is on your credit report.
What if I want to close the card before conversion?
You can close the card at any time. Your deposit will be returned to your Navy Federal savings account. However, closing the card stops the credit-building benefit, and closing an account can temporarily lower your credit score because it reduces your available credit. It is usually better to keep the card open even after you no longer use it, as long as there are no annual fees after conversion.