Verdict: Qualifying for the best credit cards isn’t easy when you have a low credit score. Fortunately, the credit-card industry has designed several cards — most of them secured credit cards — that you can use to rebuild your credit. The LANPASS Visa is one such card. And not only can you use this card to help you fix your ailing credit score, you can also use it to earn free miles on LAN Airlines, a carrier that flies to destinations in South America. Just be careful; the purchase interest rate on this card is high.
Overview: By paying your credit-card bills on time with the LANPASS Visa secured card, you can steadily boost your credit score. Once your score is high enough — and this will only happen if you pay all your monthly bills on time — you can apply for credit cards that offer more generous rewards programs and lower interest rates.
How This Card Works: Like most secured credit cards, you will set your own credit limit by sending in a cashier’s check or money order with your credit-card application. US Bank, the issuer of this card, will then set up a savings account for you. Your credit limit will be equal to the amount of money you send in. This is known as collateral; if you fail to pay your credit-card bills, US Bank can simply withdraw the money from the savings account it created when you applied for the card.
Travel and Shopping Benefits: You’ll earn one free LANPASS mile, to be used on LAN Airlines flights, for every dollar that you charge on your LANPASS Visa secured card. You’ll also earn 10,000 free miles the first time that you use your card. Finally, you’ll qualify, too, for a 10 percent discount on all LAN Airlines merchandise and tickets.
Fees: The only drawback with this card is its purchase interest rate, which is a high 16.24 percent. This isn’t surprising; secured credit cards always come with higher purchase interest rates because the clients taking them out are considered high risks to miss payments. The card comes with no annual fee for the first 12 months. The annual fee then jumps to $25 once this introductory period ends. Cash advances cost either $5 or 4 percent of the advance amount, whichever is higher. Late-fee and returned-payment penalties can run as high as $35.
Pros:
- A good card to help you rebuild weak credit.
- Can earn free airline miles with every dollar you charge.
- No annual fee for the first 12 months.
Cons:
- High purchase interest rate.
- Annual fee rises to $25 after the first 12 months.
- Can only use miles on LAN Airlines.
