Interest Rates & Features:  

Like the other cards that were rated best in our reviews of credit cards for bad credit, the Applied Bank MasterCard and Visa are secured credit cards. That means that using them is dependent on making a deposit to an account that is used as collateral for the card. In that way, the issuer virtually eliminates the risk that is typically associated with extending credit to customers who haven’t yet established a credit rating or those who have had problems with credit in the past.

Topping our list of best features for the Applied Bank Visa and MasterCard is the low interest rate of 9.99%. That is lower than any of the other secured cards we reviewed. Indeed it is competitive with the interest rates charged by many more mainstream cards. Surprisingly, the low rate extends to both purchases made with the card and to cash advances that may be taken from ATMs or participating banks. Frequently, cards charge a much higher interest rate for cash advances than they do for purchase transactions.

On the down side, there is no grace period for either purchase or cash advances with the Applied Bank cards. While that’s the norm for cash advances, many other cards offer a grace period for purchases. That allows customers to make purchases without being charged interest presuming the entire card balance is paid in full each month. The absence of this benefit means that interest charges begin to accumulate as soon as a charge is made.

The primary reason for using a secured credit card is to build or rebuild a good credit rating. But it’s also important to do that at the least possible cost, so here’s a good technique for minimizing the interest charges with a card like those from Applied Bank. First is to make only charges that you can pay off immediately. Once the charge is made, pay it off as close to immediately as possible with an online, electronic payment rather than waiting for the statement to arrive. That way charges and on time payments are recorded and reported to the credit reporting agencies but next to no interest charges ever accumulate. It’s the best of both credit worlds!