Surge Mastercard review: Good for building credit but high fees and no rewards

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The Petal® 2 "Cash Back, No Fees" Visa® Credit Card is no longer available to new applicants.

If you're looking for a credit card for people with bad credit, the Surge® Mastercard® could be a tempting choice. Offered by Salt Lake City-based Celtic Bank and serviced by Continental Finance, it offers an easy path to increasing your credit limit without requiring a security deposit.

However, its high annual percentage rate and the lack of a welcome bonus or rewards program are serious drawbacks.

Below, CNBC Select reviews the details about this card, including its benefits, fees and how it stacks up to the competition.

Surge Mastercard doesn't currently offer a welcome bonus.

The main draw of the Surge Mastercard is its relatively high credit limit for a card that doesn't require a security deposit. Initially, users can be approved for up to $1,000. After at least six months of on-time minimum monthly payments, your limit can be doubled, which helps to lower your credit utilization ratio.

Accounts are reviewed periodically after that for potential increases, according to Continental Finance, up to a maximum credit limit of $4,000.

And if you're looking at Surge because you need to beef up your credit, activity on the card is reported to all three major credit bureaus, which can help build a positive credit history.

In addition, cardholders who sign up for e-statements get a free monthly credit report.

The Surge Mastercard doesn't have a rewards program at this time.

Surge Mastercard's litany of fees is its biggest drawback. There's an annual membership fee of $75-$125 for the first year, rising to $99-$125 annually after that. Cardholders may also be charged a monthly maintenance fee of up to $10, though it is waived for the first 12 months from account opening.

Late or returned payments are assessed a $41 penalty and there's a 3% foreign transaction fee for purchases made abroad. Cash advances are charged 3% or $10, whichever is greater.

An additional card costs $30 and, if you want a "premium" card with a different design, there's a $9.95 surcharge. Customer service calls to submit payments on the same day or after 5 p.m. are subject to an undisclosed "expedited phone pay fee" that is disclosed by the representative.

You can expect a higher APR on a credit-building card, but Surge Mastercard's is 29.99%, one of the highest in the market. In comparison, the Citi® Secured Mastercard® has a variable rate of 27.74%.

With the Surge Mastercard's long list of fees and lack of rewards, it's worth looking at the alternatives.

Surge Mastercard vs. Discover it® Secured Credit Card

While it requires a minimum security deposit of $200, the Discover it® Secured Credit Card has no annual fee. And unlike the Surge card, it includes a rewards program that offers 2% cash back at gas stations and restaurants — for up to $1,000 in combined purchases each quarter. (After that, it decreases to 1%.) For all other purchases, cardholders get 1% cash back.

There's also a welcome bonus that matches all of the cash-back rewards users earn during their first 12 months.

The Discover it Secured Credit Card has a 26.49% variable APR, compared to Surge's 29.99%. While not a huge difference, it can become noticeable if you carry a balance over a long period.

Surge Mastercard vs. Petal® 2 "Cash Back, No Fees" Visa® Credit Card

Like the Surge Mastercard, the Petal® 2 "Cash Back, No Fees" Visa® Credit Card doesn't have a security deposit requirement.

But unlike the Surge card, the Petal 2 Visa also has no annual fee, no foreign fees and no charge for late or returned payments. And while Surge cardholders are capped out at a $4,000 credit limit, this card's maximum limit is $10,000.

The Petal 2's rewards program offers cash back on eligible purchases starting at 1%. (That increases to 1.25% after six on-time payments and, after 12 on-time payments, ultimately to 1.5%.)

The Petal 2 Visa has a variable APR of 28.49% - 30.49% while the Surge Mastercard has an APR of 29.99%.

if you have poor credit and don't believe you'll qualify for a better card, the Surge Mastercard might suit your needs. It does provide a clear path toward a credit limit increase, and there's no security deposit required.

But if you think you might qualify for a card with lower fees and a better APR -- or would consider a secured card — look at the other options. Not only could you save some money, but you'll get to enjoy a rewards program and other perks.

The Surge Mastercard is a basic unsecured card suitable for consumers who need help building up their credit scores. But its numerous fees and hefty APR weigh it down when compared to the alternatives.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every credit card review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of credit card products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best credit cards.

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