When you have a Citi Secured credit card, it means that you have put down a security deposit to secure your borrowing limit. This can be a good way to start building your credit history. But what happens if you no longer need or want the card?
In this quick guide, we'll walk you through the process of closing your Citi Secured credit card account. Keep reading for tips on how to make the process as easy and stress-free as possible. Then, stay tuned for a better alternative to secured credit cards for building credit.
How Do Secured Credit Cards Help You Build Credit?
When you apply for a secured credit card, you'll need to put down a deposit that will serve as your credit limit. This deposit acts as collateral in case you can't make your payments, so secured credit cards tend to have lower interest rates than unsecured cards.
You'll still need to make at least your minimum monthly payment on time to avoid late fees and damage to your credit score, but using a secured card responsibly can help you build up your credit history.
That being said, secured credit cards usually come with high interest rates and sometimes fees, so it's important to shop around and compare offers before you choose one. Another downside of secured credit cards is that if you default on your payments, the issuer can keep your deposit. While this is typically only about $200, that’s your hard-earned money you shouldn’t have to be afraid of losing.
What to Know About the Citi Secured Credit Card
Considering getting a secured credit card to build credit? While there are other ways you can build credit (like through a credit builder loan, for example), the Citi Secured credit card can be a great option. Let’s explore the specifics of this secured credit card.
- Annual Fee: $0
- Late Fee: Up to $41
- Foreign transaction fee: 3%
- APR: 26.24% variable. (This is right in between other popular secured credit cards. For example, the Discover Secured card comes with a variable APR of 25.99% and the Capital One Platinum Secured credit card comes with a 28.49% variable APR.)
- Deposit: Minimum $200. However, unlike other secured cards from Discover and Capital One, you can provide Citi with a higher deposit to get a higher credit limit. This can be up to $2,500.
- Rewards: None
How Much Deposit Do I Need for a Credit Limit?
Citi requires a security deposit of at least $200, which is standard. The biggest difference with Citi is that you can provide a deposit of up to $2,500 if you’re able to. This will increase your credit limit and help you build credit faster.
How to Increase Your Citi Credit Limit
Citi allows you to request a credit limit increase via email instead of calling someone directly. To request a credit limit increase, you’ll most likely need to have your most recent tax return on hand or be able to provide them with your last two months’ pay slips.
Once you have those documents, you’ll simply log into the Citi mobile app or log in via the online banking portal on a laptop or computer. Go to your dashboard and find your secured credit card. Tap on the card and view the details to request a credit limit increase.
How to Close Your Citi Secured Credit Card
If you have a Citi Secured credit card, then you may be wondering, “What happens if I close my card?” Your credit score may decrease when you close a credit card account because it can reduce your available credit, which is the amount of credit you have available to you minus the amount you owe.
This is also called your credit utilization ratio, and it's one factor that's used to calculate your credit score. A high credit utilization ratio can indicate to creditors that you're using too much of your available credit, which may make them perceive you as a higher-risk borrower. So, if closing a credit card account would cause your credit utilization ratio to increase, it could also cause your credit score to go down.
Additionally, closing an account can also shorten your average credit history, which is another factor that's used to calculate your credit score. So, if you close an account that you've had for a long time, it could potentially have a negative impact on your score.
Consider these factors before you close your account. Still ready to get rid of your Citi Secured credit card? Simply call the number on the back of your card to speak with a representative. They’ll ask you why you want to close the account and then help you with the process.
How to get your security deposit refunded
When you close your account, Citi should send you your deposit back. Typically, they’ll send the money to you in the form of a check or issue the refund directly to the bank account you used when signing up. It can take up to 2 billing cycles plus 10 days.
Better Ways to Build Credit
Still not get enough credit to qualify a nice credit card with good benefits after using your Citi secured credit card? You might want to consider some other options to level up your credit.
A better way to build credit if you have poor or no credit is to get a credit builder loan. Both credit builder loans and secured credit cards can help people with bad credit or no credit history to improve their credit scores.
However, credit builder loans often come with lower APRs (between 5% and 16% usually, depending on your location) and no security deposit (the deposit you put down goes towards your savings instead of simply being used as collateral). This is why a credit builder loan is generally a better option than a secured credit card for building credit.
Start Building Credit With Cheese
Are you interested in credit builder loans as a way to help you build your credit? Cheese offers a credit builder loan to help you build your credit and save money at the same time!
All you have to do is apply for a credit builder loan of as little as $500 and choose a term length of 12 or 24 months. Use our autosave feature to make on-time payments and build a great credit history little by little. We report your payments to all 3 creidt bureaus.
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