Bad credit rating is a bane to millions of people in the entire world. People with negative credit history have to endure untold misery, trying to access financial aid such as loans, credit cards, or mortgages. To help such people, most banks, including TD Bank, introduced a secured credit card. A type of credit card that helps people fix their negative credit score.
Just like some loans that require asset backing as security, secured credit cards demand a security deposit. In most cases, you deposit an amount equivalent or above your credit card limit. The deposit protects the Bank against losses in case you are not able to pay your bills. For instance, when applying for a TD bank secured credit card with a limit of $1,000, a deposit will range from $1,000.
Also, this card is the right choice if you want to build your credit score from scratch. We will delve on TD bank secured credit card, which is currently one of the best in the market.
How TD Bank Secured Credit Card Works
The TD secured credit card’s operations are almost similar to all the others. The Bank requires a deposit equal to your card’s credit limit. The lowest limit allowed is $300. Your credit card will be processed with a limit equal to that exact amount. Your deposit remains with the Bank as a security if you abscond the payment plans or cannot pay.
The card operates just like regular credit cards. However, unlike some credit cards, it doesn’t allow spending above the limit. Before starting a new billing cycle, which is monthly, you are supposed to make an installment for card replenishing.
The TD secured credit card offers an excellent chance to build or rebuild your credit score. The Bank submits your monthly financial data to the credit bureaus. So, if you are disciplined and make timely installments, your credit score will improve.
TD Bank introduced this card in a bid to help customers make more informed financial decisions. If you make your payments consistently for a year or so, you can get your deposit back and have your secured card replaced with an unsecured one.
Application Process for TD Bank Secured Credit Card
One major downfall with this card is the lack of an online application process. To apply, you must visit your local TD Bank branch. You’ll provide some basic information about yourself such as;
- Name and address
- Your Social Security Number
- Financial information
- Employment information
- Contact information
Before your application is submitted, you must pay a deposit equal to your expected limit. Then your details are submitted for verification. If successful, the Bank will email you a brand-new secured credit card. The card is as easy to use as regular credit cards. If you experience any difficulties, the TD Bank offers 24/7 customer care support.
Users have given this card many fantastic reviews, as it serves them very well. How it fulfills their needs just as a usual credit card and improvement in their financial future capture their attention.
Features and Benefits of TD Bank Secured Credit Card
1. Extra – cashback Rewards
The TD secured credit card works like the typical credit card by offering cash backs. You are entitled to a 3% cashback when you buy food in the eateries. When you make purchases in the groceries, you receive a 2% cashback reward. 1% cashback is offered for any other purchase you make with the card.
2. It’s a Great Travel Companion
For frequent travelers, two things are essential: global acceptance and low to no-fee transactions. TD secured a credit card passes both requirements. No foreign transaction charges, and being a Visa Card enjoys worldwide support.
3. You must be in certain states to apply
The fact that the secured credit card application is done physically, you must be in only states with a physical branch. If your state doesn’t have a TD branch, you may have to consider other credit cards. The following are the supported states at the moment;
- Washington Dc
- New York
- North & South Carolina
- New Hampshire
- New Jersey
- Rhode Island
4. Your savings account secures your credit card
Once you have applied for a TD secured credit card, you activate a savings account to hold your security deposit by default. The money saved in this account serves as collateral, and it is your credit line. If, for example, you deposit $300, your card limit is $300. Any attempts to bypass the limit will be declined until a certain period elapses.
5. You can graduate from Secured to an unsecured credit card
If you maintain good standings paying your monthly installments on time, TD can give you an unsecured card. The graduation is a positive financial landmark as it will put you on the right financial trajectory. Other lenders will also start trusting you, which attracts better credit funding.
6. Doesn’t allow overfunding
Overfunding your secured credit card can lead to freezing. For example, if your card’s limit is $500 and you deposit $700, it will be frozen.
7. Redeem points for more than cashback
Apart from cashback, TD secured a credit card that offers other redeeming options. In addition to cash backs, you can also convert your points to gift cards, travel, or merchandise. When redeeming for cash backs, one point is equivalent to one cent, and you can only redeem not less than 2,500 points. The same rates apply for travel and gift cards. However, these rates are not constant and change when redeeming for merchandise.
Disadvantages of Secured Credit Cards
Whereas these cards are a good option or the only avenue to access credit card services, it has significant drawbacks worth noting.
First, they charge very high-interest rates compared to unsecured cards. The fee, which always above 19%, is almost double the latter. This is not good, especially if you aim to save or cut costs.
The security deposit demanded is also a disadvantage. You cannot use this deposit even when you have the card. Also, in the case of inconsistencies, you can quickly end up losing the whole amount in servicing the bills and interests accrued.
Finally, some lenders may ask you to pay a non-refundable setup fee. It is a small percentage of your card’s credit limit that you pay as a card processing fee. All these charges can be so inconveniencing and expensive to the applicant.
FAQ – Frequently Asked Questions
What is a Secured Credit Card?
It is a type of credit card that you pay some deposit to the Bank to receive it. The deposit you pay should be at least equal, above, or double the expected limit. The deposit protects the card issuer in case you don’t pay your bills. This card is best suited for people with zero or bad credit scores. If used appropriately, it can help you improve or build your credit score.
Why Should I get a TD Bank Secured Credit Card?
It is a great option to build or repair your bad credit score. Secured credits can also help immigrants without any credit history. Whatever your motive is, secured credit cards allow marketing yourself to lenders as a trustworthy borrower. It also gives you a chance to enjoy all the usual services offered by regular credit cards.
What happens to my security deposit?
You cannot access the security deposit or reimbursed when you still use the secured credit card. It can also be put in an investment plan in which it will generate interest. The money is then refunded once your credit improves, and your card is replaced with the unsecured one.
Do I have other options?
Yes. There are many other credit card options other than the TD secured credit card. Even if you don’t qualify for the traditional unsecured credit cards, some issuers target people with low credit ratings. With a $500 or above the score and meeting some other additional conditions, you can be sure of an unsecured credit card. Such an example is Affirm MasterCard. The major drawback with this card, although, is the high-interest rate. You should be ready to pay hefty amounts in the form of interest.
How long do you have to use a secured credit card?
Responsible borrowers are awarded the unsecured credit cards and get their security deposits back. The duration for qualification differs but ranging between 12 – 18 months. Several factors are considered to reach that declaration starting from your previous credit history and the lenders’ observations.
What’s the best TD Bank student credit card?
TD Bank doesn’t offer student credit cards. Alternatively, the Bank recommends their secured credit card for students. It is the best choice for people with low to no credit history. The card also has the best features for students; the 3% cashback on dining, 2% for purchases at grocery stores, and 1% on the other purchase. The Bank also has some student tailored checking and savings accounts.
Can a student access TD’s unsecured credit card?
No. There is no direct way a student can access an unsecured credit card. However, there are some other options a student can use to acquire less limited TD credit card options. The three major ways include;
- Signing up for the TD secured credit card and made sure you pay all your bills on time. It will help you build your credit score, and the Bank may consider you in your later applications.
- You can also opt for the Target credit card. TD Bank also issues this card to students with a fair credit score. Even though the card is only viable at target outlets, you can be sure to purchase a variety of products with it. With it, you will receive 5% off all purchases with no annual fee.
- If you are a student and you have a relative who uses TD Bank credit card, you can apply to become an authorized user on their card. You’ll be allowed to make purchases with their cards accessing all card services.
What’s the best TD credit card?
TD Bank offers 3 other types of credit cards best in their respective categories besides the secured credit card. Depending on where you want to use your credit card, the following are the best TD credit cards based on functionalities.
- TD Cash Credit Card–If you are looking for a card that will offer you high bonuses in cash returns, this is it. It provides different cash backs for every category. There is 3% for dining purchases, 2% for groceries, and 1% for the rest of the purchases. On top of the hefty bonuses, the card doesn’t charge an annual fee. Instead, if you spend at least $500 within three months after signing up, you are entitled to 1,500 redeemable points.
- TD First Class Visa Signature Credit Card – This is the best TD credit card for travelers. If you spent a lot on traveling, this card helps you cut down the expenditure considerably. It gives three first-class miles at $1 for all dining and other travel expenses. As if that is not enough, it gives you one mile per $1 for other expenses. You can also receive 25,000 free miles if you spend at least $3,000 in your first six billing cycles.
- TD Business Solutions Credit Card–It is best for business cash backs. TD Business Solutions Credit Card awards cash backs in major business spending budgets. For example, expenditure on phones, internet accessories, refueling, and dining are among them. For spending on phones, internet and cabling, you receive a 3% cashback, on fuel and dining, you receive 2% and 1% for others.
One thing is sure; no one cannot access credit card services. The TD Bank’s Secured credit card is a saving tool if you have a messed-up credit history or none at all. Additionally, the card gives a chance to better or grow your credit history. If you find yourself unable to access the regular credit cards, this card might be all you need. Even though you may spend some considerable amount of money as deposits and set up fees, it’s worth it. This will probably take you a year or less, then walk out with a better credit record.
Once you have those stellar credit scores, you can now consider signing up for other TD Bank credit cards. Depending on where and how you want to use the card, there are three major covered areas- traveling, business, and savings. This time you are free from the hustle of deposits as collateral. Therefore, when you hear people say TD Bank is a customer-oriented institution, this is the reason. Never hesitates to give a second chance to worthy customers.