U.S. Bank, one of the largest banks in the US, announced it is releasing two new secured credit cards which allow consumers to improve their credit score, according to a CNBC report.
The secured cards help consumers, who may not be eligible for a traditional card, to build their credit in order to gain higher credit limits and rewards. The cards include the US Bank Altitude Go Visa Secured Card and the Cash+ Visa Secured Card, and both require an initial upfront deposit of $300 to $5,000.
The deposit serves as collateral for banks and allows users who may be seen as risky, due to bad credit or lack of credit, to gain access to credit products and build their history.
Secured credit cards have gained popularity recently, with major card issuers Bank of America, Capital One, Discover and Navy Federal Credit Union all releasing their own version of the product, according to Investopedia.
The Altitude Go card offers 4x points per dollar spent on dining, 2x points per dollar spent at grocery stores, gas stations and streaming services and at least 1x points per dollar on all other eligible purchases. Cardmembers are also eligible for a $15 credit for annual streaming services and do not have to pay annual fees or foreign transaction fees.
The Cash+ Visa secured card offers more cash-back focused rewards, with 5% cash back on customers’ first $2,000 spent on eligible purchases each quarter. These purchases have to fall into two categories, chosen by users, with other categories offering 2% cash back.
Users can redeem cash back on their statement, direct deposit to a U.S. Bank checking or savings account, and users can choose the due dates of their bills, according to PYMNTS.
In other recent fintech news, the U.S. has fallen behind on adopting digital-only banks, with only 6% of U.S. adults having a digital bank account. Atomic also raised a $22 million Series A in an effort to bolster companies payroll APIs.