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Citi Secured Mastercard review: Make sure you never miss a payment on the path to good credit

Below, CNBC Select breaks down the rewards, benefits and fees associated with the Citi Secured credit card to help you decide if it's the right card for you.

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When you have no credit history, getting your first credit card might feel impossible. Without any history to prove you are trustworthy, credit lenders are unable to determine the appropriate amount of money to let you borrow. So how do you begin?

There are a few solutions that allow you to build credit in a way that mitigates both your risk and your credit lender's risk. One is by becoming an authorized user on someone else's credit card. If that option doesn't appeal to you, you can apply for a secured credit card instead.

It takes a little discipline to get started, but with a refundable deposit of anywhere from $200 to $2,500, you can often get approved for a secured credit card like the Citi® Secured Mastercard®.

Below, Select breaks down the rewards, benefits and fees associated with the Citi Secured credit card to help you decide if it's the right card for you.

Citi Secured Mastercard review

  • Rewards
  • Additional benefits
  • Fees
  • Bottom line

Citi® Secured Mastercard®

On Citi's secure site
  • Rewards

    This card doesn't offer cash back, points or miles

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    22.49% variable on purchases and balance transfers

  • Balance transfer fee

    5% of each balance transfer; $5 minimum

  • Foreign transaction fee

    3%

  • Credit needed

    No credit history

See our methodology, terms apply.

Pros

  • No annual fee
  • $200 refundable deposit
  • Flexibility to change your payment due date

Cons

  • No rewards program
  • 3% foreign transaction fee

Citi Secured Mastercard rewards

Since secured credit cards are different from unsecured credit cards, it's rare to find one that offers highly competitive perks and rewards.

The Citi Secured Mastercard doesn't offer cash back, points or miles, since it is mainly for credit newcomers who want to establish credit history. However, the Discover it® Secured Credit Card lets cardholders earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, then 1%, plus unlimited 1% cash back on all other purchases automatically.

With secured credit cards, you'll have to make a refundable security deposit in order to establish your credit limit. In most cases, your credit limit will equal the amount you deposit. The Secured Mastercard® from Capital One is an exception, giving qualified cardholders the ability to open a $200 credit line with a deposit of $49.

No matter the size of your deposit or credit limit, proving your creditworthiness will take at least a few months. But after demonstrating you can make all of your payments on time and spend within your means, you will eventually be able to qualify for credit cards with lower APRs and better rewards.

Additional benefits

Making your credit card payments on time is paramount in helping you establish good credit card habits. Of all the factors that comprise your credit score, on-time payments is the most important. Missing a credit card payment not only hits you with late fees of $40 or more, but it can also lower your score as much as 100 points.

Not to mention, missing your payment can hit you with a penalty APR — a temporary but significant spike in your normal APR — and derail your ability to pay off your balance.

The Citi Secured card makes it a little easier to pay your bill on time. Cardholders have the ability to choose their own payment due date according to what works best for their cash flow. Whether you are paid in the beginning, middle or end of the month, you'll have the flexibility to help ensure you are never late on a payment.

Fees

The Citi Secured card has a 22.49% variable APR on purchases and balance transfers, with a 5% fee on each balance transfer, minimum $5. There is no special financing period, so this APR will be in effect starting with your first billing cycle.

If you use your Citi Secured card abroad, there will be a 3% foreign transaction fee when you use it to spend internationally. For this reason, it's best to use credit cards for travel after you've established good credit history and can be approved for a travel credit card with no foreign transaction fees, like the Capital One VentureOne Rewards Credit Card.

Bottom line

The Citi® Secured Mastercard® is a no annual fee secured credit card with a minimum deposit of $200. Borrowers can qualify for a credit line of between $200 and $2,500 — but as with most secured credit cards, this amount is dependent upon how much of a deposit you are able to make.

Suffice it to say, having a secured credit card requires some discipline on the borrower's end before they are approved. You can think of it as the first step toward financial responsibility, since saving and budgeting are essential skills in learning how to manage your credit card spending.

Our methodology

To determine which credit cards offer the best value, Select analyzed 234 of the most popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.

Don't miss: Here are the best Citi credit cards for earning cash back and paying off debt—plus one with no late fees

Information about the Capital One Secured Mastercard, and Capital One VentureOne Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.

For rates and fees of the Discover it® Secured Credit Card, click here.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.