What the Bank of America Secured Card Does
The Bank of America Secured Credit Card is a card you fund with your own cash deposit, which becomes your credit limit. You use it like a regular card, and your payment history gets reported to the three major credit bureaus — Equifax, Experian, and TransUnion. The deposit stays in a separate account and earns a small amount of interest while you hold the card.
The card itself carries an annual fee of $29. There is no foreign transaction fee, and you can use it anywhere Visa is accepted. The main purpose is to build or rebuild your credit history by showing lenders you can make on-time payments with money you have already set aside.
Key Takeaways
- Your cash deposit becomes your credit limit, ranging from $500 to $24,500, and earns interest while held by the bank.
- The $29 annual fee is charged whether you use the card or not, so the math works best if you plan to use it regularly.
- Your payment activity reports to all three credit bureaus each month, which is how the card builds your credit score over time.
- After 12 to 24 months of on-time payments, you may be able to convert to an unsecured card and recover your deposit.
- You can increase your credit limit by adding more money to your deposit, up to the card's maximum of $24,500.
How Much You Need to Deposit and What It Costs
Bank of America requires a minimum deposit of $500 to open the card. You can deposit up to $24,500, and your deposit amount becomes your credit limit. For example, if you deposit $1,500, your credit limit is $1,500.
The deposit earns interest at a rate that varies — Bank of America sets this rate and changes it periodically, so you should ask the current rate when you open the account. The interest is not enough to offset the $29 annual fee in most cases, but it does mean your money is not sitting idle.
The $29 annual fee is charged to your card every year. If you carry a balance, you also pay interest on that balance at a variable rate that depends on your creditworthiness and current market rates. There are no late fees, over-limit fees, or foreign transaction fees.
How the Card Reports to Credit Bureaus
Bank of America reports your account activity to Equifax, Experian, and TransUnion each month. This means every on-time payment you make strengthens your credit history, and every late payment damages it. The card reports the same information a regular credit card would: your payment status, how much of your limit you are using, and your account age.
Payment history makes up about 35 percent of most credit scores, so consistent on-time payments are the fastest way to improve your score with this card. Using a small portion of your credit limit — typically 10 to 30 percent — and paying it off in full each month shows lenders you can manage credit responsibly.
Converting to an Unsecured Card and Getting Your Deposit Back
After 12 to 24 months of on-time payments, Bank of America may convert your account to an unsecured card automatically. When this happens, your deposit is returned to you, and you keep the card with a new credit limit that the bank sets based on your payment history and credit score.
You do not have to wait for automatic conversion. You can request a review after 12 months of perfect payments. Bank of America will not may provide conversion, and the bank's decision depends on your credit score, payment history, and current account status. If you are converted, the $29 annual fee continues on the unsecured version unless you close the account or the bank waives it.
If you are not converted after 24 months, you can continue using the secured card indefinitely. Some people keep the card open even after conversion because the deposit earns interest and the card has no foreign transaction fees.
How to Increase Your Credit Limit
You can raise your credit limit by depositing additional money into your secured deposit account. The new deposit amount increases your limit by that amount. For example, if you started with a $500 deposit and limit, you can add $500 more to raise your limit to $1,000.
There is no limit to how many times you can increase your deposit, as long as you stay within the card's maximum of $24,500. Each deposit increase also increases your credit limit by the same amount. This is useful if you want to show lenders a higher available credit amount or if you need more spending room on the card.
Comparing Bank of America to Other Secured Cards
Other banks offer secured cards with different terms. The Capital One Secured Mastercard has no annual fee but charges interest on balances and reports to all three bureaus. The Discover Secured Card also has no annual fee and offers cash back on purchases. The Chime Credit Builder Visa has a lower minimum deposit of $200 but a smaller maximum limit.
The main trade-off with Bank of America is the $29 annual fee versus no annual fee on competitors. However, Bank of America has no foreign transaction fee, which matters if you travel internationally. The decision depends on whether you plan to use the card internationally and how much the annual fee matters to your budget.
| Card | Minimum Deposit | Maximum Limit | Annual Fee | Foreign Transaction Fee |
|---|---|---|---|---|
| Bank of America Secured | $500 | $24,500 | $29 | None |
| Capital One Secured Mastercard | $200 | $2,500 | None | 1% |
| Discover Secured Card | $200 | $2,500 | None | None |
| Chime Credit Builder Visa | $200 | $1,000 | None | None |
Who This Card Makes Sense For
The Bank of America Secured Card works best if you have little or no credit history and need to build a record of on-time payments. It also works well if you travel internationally and want to avoid foreign transaction fees. The higher minimum deposit of $500 means you need cash available upfront, which rules out people with very tight budgets.
The $29 annual fee is worth paying if you plan to use the card regularly and keep it open for at least a year. If you only want to open a card and let it sit unused, the fee becomes expensive relative to the benefit. The card is less useful if you already have a decent credit score — in that case, an unsecured card with rewards would serve you better.
Frequently Asked Questions
Can I use the card right after opening it?
Yes. Once your deposit clears and the card arrives, you can use it when ready. The deposit typically clears within one to three business days. Your first payment is due about 25 days after your first purchase, depending on your statement closing date.
What happens if I miss a payment?
A missed payment is reported to all three credit bureaus and damages your credit score. Bank of America does not charge a late fee, but interest accrues on the unpaid balance. A single late payment can lower your score by 100 points or more, so on-time payment is critical to the card's purpose.
Can I withdraw money from my deposit?
No. Your deposit is held as collateral and cannot be withdrawn while the account is open. You can only recover it by closing the account or by converting to an unsecured card, at which point the bank returns the deposit to you.
Does the deposit earn enough interest to cover the annual fee?
Rarely. Interest rates on secured deposits are typically 0.01 to 0.05 percent annually, which means a $1,000 deposit earns less than $1 per year. The $29 annual fee far exceeds this, so the card's value comes from credit building, not from interest income.
What credit score do I need to open this card?
Bank of America does not publish a minimum credit score requirement. The card is designed for people with no credit or poor credit, so approval is usually based on your deposit amount and identity verification rather than your score. You can check your chances before formally explore.