What the Navy Federal Secured Credit Card Is
The Navy Federal Secured Credit Card is a credit-building product for members of Navy Federal Credit Union who have limited or damaged credit history. You deposit money into a savings account, and that deposit becomes your credit limit—typically between $500 and $2,500. You then use the card like a regular credit card, and your payment history gets reported to the three major credit bureaus (Equifax, Experian, and TransUnion).
The card is designed as a stepping stone. After you demonstrate responsible use—usually 6 to 18 months of on-time payments—Navy Federal may convert it to an unsecured card, return your deposit, and close the secured account. You keep the credit history you built in the process.
To open this card, you must be a Navy Federal member. If you are not already a member, you can join if you are active duty, retired, a veteran, a Department of Defense civilian, or a family member of someone in one of those categories.
Key Takeaways
- Your cash deposit sets your credit limit, so a $1,000 deposit gives you a $1,000 limit.
- Navy Federal reports your payments to all three credit bureaus, which means on-time payments build your credit score over time.
- You must be a Navy Federal member to open the card, but membership is open to active duty, retired, veterans, and their families.
- After consistent on-time payments, Navy Federal typically converts the card to unsecured and returns your deposit within 6 to 18 months.
- The card carries an annual fee, so factor that cost into your decision to open it.
Who Can Open a Navy Federal Secured Card
You must hold a Navy Federal membership and meet their basic account requirements. Navy Federal membership is open to active duty service members, retirees, veterans with any discharge status, Department of Defense civilians, and when ready family members of any of those groups. Spouses and children of deceased service members also may have access to.
If you are not yet a member, you can join online or at a Navy Federal branch. Membership itself is free. Once your membership is active, you can then request the secured card.
Navy Federal will review your credit history and current financial situation when you explore for the card. A very recent bankruptcy or fraud may delay approval, but the secured card is specifically designed for people with limited credit or past credit problems, so approval standards are more flexible than for unsecured cards.
How to Open the Account and Fund Your Deposit
Start by logging into your Navy Federal online account or visiting a branch. Navigate to the credit card section and select the Secured Card option. You will enter basic information: your name, address, income, and employment status.
Navy Federal will ask you to choose your deposit amount. The minimum is typically $500 and the maximum is $2,500, though these amounts can vary. Your deposit becomes your credit limit dollar-for-dollar—a $1,000 deposit means a $1,000 credit limit.
Once approved, you fund the deposit by transferring money from your Navy Federal savings or checking account. Navy Federal holds this money in a separate savings account linked to your card. You earn a small amount of interest on the deposit, though the rate is modest.
After your deposit clears, your card ships to you within 7 to 10 business days. You will receive set up instructions by mail or email. Follow those instructions to set up the card before you use it.
Annual Fees and Interest Rates
The Navy Federal Secured Card carries an annual fee. The exact amount varies, so check your card agreement or contact Navy Federal directly for the current fee. This fee is charged once per year and appears on your statement.
The card also has a purchase Annual Percentage Rate (APR), which is the interest rate you pay if you carry a balance month to month. Navy Federal members typically receive better rates than the general public, but the APR on a secured card is usually higher than on an unsecured card because the lender is taking on more risk. If you pay your full balance by the due date each month, you pay no interest.
There is no grace period waiver on cash advances or balance transfers—interest accrues when ready on those transactions. Avoid using the card for cash advances unless absolutely necessary.
Building Credit and Converting to Unsecured
Every payment you make on the secured card is reported to Equifax, Experian, and TransUnion. On-time payments build your credit score. Late payments, missed payments, and high balances relative to your limit all damage your score, so treat this card as seriously as you would any other.
To convert the card to unsecured, you need to demonstrate responsible use. Navy Federal typically looks for 6 to 18 months of on-time payments, a low balance relative to your limit, and no negative marks on your account. You do not have to request conversion—Navy Federal monitors your account and initiates it automatically when you meet their criteria.
When Navy Federal converts your card, they close the secured account and return your deposit to your savings account. Your credit history on that account remains on your credit report, so the positive payment history you built stays with you. You then receive a new unsecured card with a new account number.
How to Use the Card Responsibly
Treat the secured card like any credit card: charge only what you can pay back in full by the due date. If you carry a balance, you pay interest on top of what you owe, which defeats the purpose of building credit affordably.
Keep your balance well below your credit limit. Credit scoring models look at your utilization ratio—the percentage of your available credit you are using. Using more than 30 percent of your limit can lower your score, even if you pay on time. If your limit is $1,000, try to keep your balance under $300.
Set up automatic payments for at least the minimum due, or better yet, the full balance. This removes the risk of forgetting a payment, which would damage your credit and trigger late fees.
Check your statement each month to make sure all charges are yours. If you spot fraud or an error, contact Navy Federal when ready.
When to Close or Keep the Card After Conversion
After Navy Federal converts your card to unsecured and returns your deposit, you have a choice: keep the card or close it. Keeping it open is usually better for your credit score, even if you do not use it regularly. An open account with a long payment history and zero balance helps your score.
If you close the card, the account remains on your credit report for seven years, but it stops actively helping your score. You lose the benefit of that available credit in your utilization ratio calculation.
If you keep the card, use it occasionally—once every few months—to keep the account active. Navy Federal may close inactive accounts after a long period of no use.
Frequently Asked Questions
What happens if I miss a payment on the secured card?
A missed payment is reported to the credit bureaus and damages your credit score. Navy Federal will charge a late fee and may increase your APR. If you miss a payment, contact Navy Federal as soon as possible to bring your account current and discuss your options.
Can I increase my credit limit without adding more money to my deposit?
Not initially. Your credit limit is tied to your deposit amount. After Navy Federal converts the card to unsecured, you may be able to request a credit limit increase without adding money, but that depends on your credit history and Navy Federal's review of your account.
How long does it take to build credit with this card?
You will see changes in your credit score within 30 to 45 days of your first on-time payment, because the card is reported to the bureaus monthly. Significant score improvement typically takes 6 to 12 months of consistent on-time payments and low balances.
What if I need my deposit back before the card converts?
You can close the card and withdraw your deposit at any time, but doing so stops the credit-building process and may lower your score if you have built history on the account. Close only if you have a genuine financial emergency.
Is there a difference between the Navy Federal Secured Card and other military credit cards?
Yes. Other Navy Federal cards are unsecured and designed for members with established credit. The Secured Card is specifically for members building or rebuilding credit. Once you convert to unsecured, you may be able to move to other Navy Federal products with better rewards or lower rates.