Neo Secured Card review

What the Neo Secured Card is designed to do

The Neo Secured Card exists to help you build or rebuild credit. You put down a security deposit, use the card like any other credit card, and Neo reports to the credit bureaus. With a suggested credit score of 560 or higher, it’s aimed at people with limited or damaged credit.

What sets it apart is that it earns cash back. The Home Trust Secured Visa, by comparison, earns no rewards. With the Neo card, you can rebuild your credit and collect a little cash back at the same time.

How the cash back works

Neo lists a 1% rate on everyday spending and an average of 5% at Neo partners. The partner rate varies by merchant and offer, so the 5% figure is an average across partners rather than a fixed rate you can count on everywhere.

For example, if $500 a month of your spending earns 1%, that’s $5 a month or $60 a year. Shifting some of that spending to Neo partners would raise the total, depending on the offers available to you at the time. Treat the cash back as a bonus on top of the main goal, which is a stronger credit file.

Using the card to build credit

Because Neo reports to the credit bureaus, how you use the card shows up in your credit history. Paying on time every month is the most important habit, and keeping your balance well below your limit helps too.

The security deposit is what lets the card serve people with little or no credit history, since it backs your spending limit. Check Neo’s current deposit requirements before you apply so you know how much to set aside.

Fees, interest and the fine print

The standard tier has no annual fee. Neo also offers premium tiers that may add a monthly fee, so make sure you know which tier you’re signing up for. If you choose a premium tier, add its monthly fee to your calculations: cash back on a modest budget is small, so a monthly fee can easily outweigh it.

Purchases are charged 19.99% interest and cash advances 22.99%. Carrying a balance on a credit-building card works against you, so pay in full whenever you can. Foreign currency purchases carry a 2.5% fee, about $25 per $1,000 spent.

Coverage and protection

The card’s listed protection is Mastercard zero-liability, which protects you from unauthorized charges. There’s no travel or purchase insurance in the package.

• Mastercard zero-liability protection

Who it suits, and who should look elsewhere

The card suits people new to credit, people rebuilding after missed payments, and anyone turned down for an unsecured card who still wants some cash back on their spending. It’s also a way to show a few months of responsible use before you apply for an unsecured card.

If your credit is already in good shape, you don’t need to tie up money in a deposit. An unsecured no-fee card would let you earn rewards without one.

How it compares

The Home Trust Secured Visa is another no-fee secured option, but it earns no rewards. If cash back matters to you, the Neo card has the edge.

Once your credit improves, the Neo World Mastercard has no annual fee and a top rate of 2% on groceries, so you could stay with Neo as you move on from a secured card. Check its approval requirements before you apply.

Before you apply

A credit score of 560 or higher is the suggested starting point, though Neo Financial makes the final decision based on your full credit profile. Confirm the deposit requirements, tier fees and current partner offers on Neo’s website before you apply.