Verdict: Many fully secured credit cards, used by people to establish or re-build their credit, hit users with fees that leave little in their account for actual spending. Some cards tie up as much as 50% of your deposit.

The BankAmericard Visa Fully Secured card charges an annual fee of $39 but no other fees. (Of course, penalty fees apply for late payments, etc.)

Additionally, the BankAmericard Visa Fully Secured Card lets you deposit between $300 and $10,000 as a security deposit, giving it a higher credit limit than many secured cards. If you don’t pay your balance in full each month, the interest rate is 18.24% variable — lower than the default penalty rate on most cards today.
After a year the bank automatically reviews your account for an upgrade to an unsecured card.

Overall, if you have $300 to deposit in an account and $39 to cover the annual fee, this is a fantastic credit card for anyone looking to re-build their credit. For students looking to establish credit, I’d recommend a student card like the Discover Student Card.

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Most of us have associated rewards programs with credit cards, until now at least. It’s more then likely that you use a debit card at least a few times a week, if not more – especially if you’re not a frequent credit card user. Although sometimes I feel like we don’t discuss debit as much as we should, one thing that I’ve been fascinated with over the past year or so has been the increase in the number of “Cash Back Debit Card” offers that I’ve seen popping up.

A cash back debit card is very similar to a cash back credit card, offering a certain % cash back on all of the purchases you make. The reason that most debit cards have no rewards program is because they are fundamentally different than credit cards when used. Every time you use a credit card, the merchant has to pay your card company an interchange fee. The card company is then able to give a percentage of this fee back as part of a rewards program.

For debit card translations, merchants don’t pay an interchange fee and so the banks have no practical way to fund a rewards program.

In my quest for finding the best cash back debit card I’ve come across two cards that really stand out.

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Austin teaches English in Japan and writes a personal finance blog for college students and twenty-somethings called Foreigner’s Finances. Learn more about his financial journey and how he ended up in Japan.

I came to Japan in July of 2009 to teach English with the JET Program.

I had spent the previous year and a half reworking my finances to get them optimized and in a comfortable place for my liking.

In Chicago, I had 3 credit cards that I rotated purchases on to keep my credit score growing. I only used a small percentage of my allotted credit amount and paid them off in full every month.

I also used an ING savings account with sub accounts for my savings goals (savings, emergency, house down payment). I loved watching my interest grow from month to month.

Finally, I had my local bank which I used for the free checking and debit card.

All of my accounts had intuitive online interfaces with bill pay. I didn’t receive any paper statements and did all of my correspondence electronically.

Financial life was good.

I used my 3 credit cards or my debit card to make all of my purchases. I got so comfortable with plastic that I even went without money 80% of the time.

Then I moved to Japan.

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When I first checked out Mint.com, I was extremely excited and optimistic by the possibilities. I still am. A service that permits you to track your spending, debt, and income, while offering you ways to save money, is a great benefit.

From a psychological standpoint, Mint strives to motivate individuals to pay off their debt faster and learn to live their best financial life. Unfortunately, email reminders are obvious at best, disheartening at worst. For instance, one notice states: “You paid $8.74 in finance charges this month. You should pay off this balance to avoid finance charges.” If I could pay off my balance, don’t you think I would?

I’d much rather see motivational statements like, “Congratulations! Your overall debt decreased by $300 this month.”  It’s Psych 101 that people respond better to praise than reprimands – even when it comes from computer programs.

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Verdict: This card offers excellent cash back rewards, no annual fee, and a 0 % introductory APR for the first 7 or 10 months, depending on your credit history. “Accelerated cash rewards” sounds appealing, but what does it really mean? You can redeem your rewards in increments of $50, and you can get your cash back as a direct deposit into your Bank of America checking or savings account, as a credit to your card statement, or in a check. In addition to the benefits offered by Bank of America, you’ll also get many of the benefits associated with being an American Express CardMember. The cash rewards, and many ways you can redeem the rewards, make the card appealing, especially for people who already have accounts with Bank of America.

Overview: In 2005, Bank of America and American Express formed a strategic alliance. In 2006 Bank of America issued its first American Express rewards credit card, giving people the benefits and prestige of an American Express credit card with online banking through Bank of America and other benefits.

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Verdict: If you’re a frequent Paypal user, the Paypal Debit Card is a must. There are no fees associated with this card and you can earn 1% cash back through the PayPal Preferred Rewards Program.

Overview: The Paypal Debit Mastercard allows you to instantly withdraw money from your Paypal balance at any ATM. One thing I really like about this card which I personally use quite frequently is the fact that you earn 1% cash back on your purchases with the PayPal Preferred Rewards Program.

I’ve had a Paypal Debit Card now for just about as long as I can remember. I decided to review this card because I get a lot of questions asking about the difference between the Paypal Debit Card and the Paypal Plus Credit Card. The Paypal Debit Card is available to anyone with a Paypal account. This card provides a way to instantly access your Paypal balance via an ATM. You can also use this card at shops, restaurants or anywhere that MasterCard is accepted.

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Jason Steele over at Ask Mr Credit Card has posted a very interesting article about Budget Rent A Car and how they are giving your credit card number out to companies with shady business practices – without any form of your consent.

Jason says that he received a letter in the mail recently that included a check for $8.25. Luckily Jason decided to read the fine print – “By cashing or depositing this check you are purchasing membership in Just for Me.” It turns out that Just For Me is a membership club that is affiliated with Budget Rent a Car. I receive junk mail like this every once and awhile but have never even bothered to look at where it comes from (it just goes right into the trash).

Anyway – The interesting thing about the check is that on the back it states:

I understand that the $13.99 monthly fee will be automatically charged to the credit card I have on file with Budget unless I cancel my membership by calling 1-877-658-9097 before the end off the trial period. I understand that after my first year I will be charged $14.99 a month for the next twelve months an d I will also be charged every month thereafter at the then current monthly fee, unless I call to cancel and owe nothing further.

As Jason points out this is a textbook case of a negative option scam, being implemented under the umbrella of Budget Rent A Car. I’ve never rented from Budget in the past, but after reading this I’m sure as hell not renting from them in the future. You can read the full article over at Ask Mr Credit Card.

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The Credit CARD Act of 2009 is now officially in effect, and if you’re a college student you may be feeling the effects sooner rather than later. As of Feb 22nd 2010, anyone under 21 who goes to apply for their own credit card is required to have an adult co-sign or to show proof that they have an income and are able to repay any debt they might incur.

When I was in college (which actually wasn’t that long ago) I was always surprised at just how easy it was for me to get a credit card in relation to a car loan or even a student loan. I actually had two student credit cards and always used them responsibly, mainly just to build credit. Unfortunately, I was surrounded by people who weren’t nearly as responsible when it came to financial matters.

Fast forward a few years and many of my college friends were heading into the real world with a huge burden already on their shoulders, a massive amount of credit card debt.

Although I agree with the marketing restrictions of the CARD act, I’m not sure how effective this will be in reducing this huge and often overlooked problem we have on every college campus. What may seem like irresponsibility on the part of the college student is actually quite often a lack of financial education.

If we really want to combat student credit card debt, more money needs to be put into educating our youth about responsible credit use, and the dangers of irresponsible spending.

While in college I was lucky enough to always be financially savvy and fairly responsible. The real problem is that many college students aren’t either of those things, and that is a true recipe for disaster.

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Verdict: This card is best-suited for cruise enthusiasts whose perfect vacation is a getaway on Royal Caribbean Cruise Lines. The variable APR of 11.24 % for people with excellent credit is a great offer, but the introductory APR range ends at 23.24%, which isn’t very good at all.

The introductory APR of 1.99 % is only available on balance transfers and direct deposits and it lasts for only seven months — not a great value. Similar cards offer 0 % APR for the first year. The benefits are also not destined to impress. One expects travel-related benefits such as travel insurance on a travel credit card, and I find no mention of these in the card’s promotional material. Certainly, better credit cards exist for people with good to excellent credit looking for travel rewards; I’m not impressed.
It’s worth mentioning that this card didn’t do well in other consumer reviews; people said points were hard to redeem and the customer service wasn’t what they expected.

As an alternative, we recommend Blue Sky from American Express or Escape by Discover if you’re looking for a travel rewards card with exceptional benefits and a truly rewarding rewards program.

Overview: This card is a travel rewards Visa card issued by Bank of America and available at different interest rates for people with good to excellent credit. As a card holder, you’ll gain access to Bank of America’s online banking center to pay your credit card bill, as well as 24/7 online customer support.
You’ll start out with 10,000 bonus rewards points after your first transaction, and earn 1 point for every dollar spent on every purchase after that. Purchases through Royal Caribbean International let you earn double points. There is no annual fee.

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Discover was recently ranked #1 in customer loyalty (to be fair it was a tie with American Express) for the 13th year in a row in the 2010 Brand Keys Customer Loyalty Engagement Index(R). Brand Keys, Inc (the company that puts together the index) compared more then 518 brands in 17 different categories.

Harit Talwar, executive vice president of card programs and chief marketing officer for Discover had this to say:

At Discover, listening to customers and investing in what is relevant to them is key. We breed loyalty into the Discover brand through rewards and customer advocacy, and we provide industry-leading products, services, and tools that help consumers find meaningful solutions to their needs.

Discover definitely has some great cards and one of the best rewards programs, but 13 years in a row? Looks like American Express is hot on their heels though so it should be interesting to see if Discover can defend the crown yet again. You can view all the winners of this year’s index here.

How long have you had your Discover Card?

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