The Fit credit card is a great option for anyone trying to rebuild or build credit. It is issued by The Bank of Missouri and doesn’t require any security deposit. You can also use it as a Mastercard almost anywhere. But there’s a good chance that the card’s ongoing fees won’t be enough to fit […]

The Fit credit card is a great option for anyone trying to rebuild or build credit. It is issued by The Bank of Missouri and doesn’t require any security deposit. You can also use it as a Mastercard almost anywhere.

But there’s a good chance that the card’s ongoing fees won’t be enough to fit your budget.

Let’s look at what the Fit Mastercard is all about. There are also other credit cards for poor credit that may be better suited for you.

1. These fees are exorbitant

If you are applying for an unsecured card for bad credit, annual fees may be required. The Fit credit card has a number of fees that are less common than usual. This is a list of the fees you can expect to pay for this card.

  • $89 one-time processing fees You must pay this fee in full with another payment method before you activate your Fit credit card.

  • Annual fee of $99 This fee is charged immediately upon activation of the card and adds to your credit limit. (Learn more about this later. Interest will be accrued if you don’t pay the monthly fee within the first month. Although it is not common to see annual fees for cards that are targeted at people with poor credit, $99 is a high price.

  • $75 maintenance fee. For the first 12 months, this fee is waived. After that, you will be billed monthly at $6.25 per mo (for a total $75/year). This fee is not included in the annual fee.

This adds up over $188 the first year, and $174 each year thereafter. Other fees may apply, such as the $30 fee to order another card or the $41 charge for late or returned payments.

What is the alternative?

The Capital One Platinum Secured credit card, which has a $0-annual-fee fee, offers access to credit at a lower upfront cost. The security deposit is required, but it could be as low at $49 for a $200 credit line. However, your security deposit will be refunded if you establish a track record of timely payments. This is in contrast to the multiple fees associated with the Fit Mastercard, which are non-refundable.

2. The initial credit limit for a new account is quite low

All Fit Mastercard borrowers are eligible for $400 credit. But here’s the downside: The downside? Your $99 annual fees immediately reduce that. Your initial spending power is just $301.

You may be eligible to receive a credit limit increase of up to $800 after six months of making on-time minimum payments. Your account may be “reviewed periodically”, based on your payment history for possible credit limit increases. Maximum credit limit is $3,000.

These numbers can be frustratingly low for many, especially those who are just beginning with credit. This is especially true when fees are added. Additionally, having a low credit limit can affect your ability to access funds and could lead you to high credit utilization. This is an important component of credit score.

What is the alternative?

The Tomo Credit Card offers credit limits up to $10,000 and avoids fees. Because it is linked to a bank account, this card functions similarly to a debit-card. Your card balance can also be paid weekly by automatic bank transfer. This means that you cannot carry a balance. However, the card reports to all three major credit bureaus (Experian Equifax, TransUnion) so you will still be building credit over time.

3. It has a high annual percentage rate

You’ll be charged a 29.99% interest rate if you don’t pay your Fit Mastercard monthly balance. Although it isn’t unusual for credit cards with bad credit, this rate is still significantly higher than average and can add up quickly. This is especially true if you consider the interest rates on other fees.

If you only make minimum monthly payments on your credit card balance, compounding interest fees will count against your low credit limit.

What is the alternative?

Although it is always best to pay your credit card bills in full each month (which is a good idea), the OpenSky(r), Secured Visa(r), Credit Card will allow you to carry a balance for a lower cost. The OpenSky(r) Secured Visa(r) Credit Card’s ongoing APR is 21.64% Variable, which is a lot lower than that of the Fit Mastercard. (In comparison, the average interest rate on credit cards that have incurred interest was 20.40% as of November 2022. )

OpenSky(r), Secured Visa(r), Credit Card requires a minimum $200 refundable deposit and a $35 annual fee. The deposit is refundable and the $35 annual fee is more affordable than what the Fit credit card charges. The card does not require a bank account or credit check.

4. All 3 credit bureaus are able to see payment history

Your account details will be reported to the three major credit bureaus every month by Fit credit card account. This includes payment history. This is important if your goal is to build credit. The information they collect can be used to calculate your credit score.

This is an important feature, but it’s not the only one. Other credit card issuers report account histories to these bureaus as well, so the high cost of a Fit Mastercard is not justified.

What is the alternative?

Stride Bank offers the Chime Credit Builder Visa(r), a credit card that may be worth your consideration. This card works in a similar way to a reloadable debit card. You can set aside money each month to pay your credit cards bill. It reports to all three major credit bureaus, unlike a debit-card.

The Chime Credit Builder Visa(r), Credit Card doesn’t have an annual fee and does not require credit checks. The card does not allow you to spend more money than you have set aside. This means that you won’t be charged interest for purchases. (Terms and conditions apply, see footer below. )

5. There is no upgrade option

Credit cards for poor credit often have high credit limits and costs, so you should aim to get a better product quickly.

This is yet another area where Fit Mastercard fails. There is no way to change the product or switch to a card with better benefits and lower fees. The only way to stop paying card’s excessive fees is to close your account.

Closing an account could be bad news for credit that you have worked so hard to build. Credit history length is a major factor in credit scores. Your credit utilization may be negatively affected by closing the account.

When you apply for another card, you will be subject to a hard inquiry that could temporarily affect your credit score.

What is the alternative?

The Discover it(r), Secured Credit Card is a great way to start your credit-rebuilding journey. It provides a clear path towards higher-quality credit products. You will need to pay an upfront security deposit equal the credit limit you wish to establish. Discover reviews secured credit cards accounts within seven months of account opening in order to determine eligibility for an unsecure Discover credit card. If you have a history of consistent on-time payments during that period, your deposit can be refunded. You can also upgrade to a Discover card without having to answer any questions about your credit or the negative effects of closing an account.

Plus, The Discover It(r) Secured credit card offers rewards. You can earn 2% back at gas stations, restaurants, and up to $1,000 per quarter.

Learn more about Chime

Stride Bank, N.A. Member FDIC issued the Chime Credit Builder Visa(r), Credit Card pursuant to a Visa U.S.A. Inc. license. It can be used wherever Visa credit cards are accepted

Credit Builder is only available to those who have made a qualifying direct deposit of $200 or greater to their Checking Account. Your employer, your payroll provider, gig economy payor, or benefits payer via Automated Clearing House deposit (ACH) OR Original Credit Transactions (OCT) must make the qualifying direct deposit. Direct deposits are not eligible for bank ACH transfers, Pay Anybody transfers, verification or trial deposit from financial institutions, peer-to-peer transfers from services like PayPal, Cash App, Venmo, and Venmo.

No-network ATM withdrawal fees are charged except at MoneyPass ATMs located in 7-Eleven locations or at any Allpoint or Visa Plus Alliance ATM