What the Bank of America Secured Card Does
The Bank of America Secured Credit Card is a credit card backed by a cash deposit you put down upfront. You deposit money into a savings account, and that deposit becomes your credit limit — so if you deposit $500, you get a $500 credit limit. You then use the card like any other credit card, paying a monthly bill. The deposit stays in the account untouched unless you stop paying your bill.
The card reports your payment history to the three major credit bureaus — Equifax, Experian, and TransUnion — which means on-time payments build your credit score over time. Many people use a secured card for 7 to 18 months, then graduate to an unsecured card once their score improves and the bank offers them one.
Bank of America does not require a minimum credit score to open this card, which is why it exists: it's for people rebuilding credit or starting from scratch. The tradeoff is that you pay an annual fee and your deposit is locked up while you hold the card.
Key Takeaways
- Your cash deposit becomes your credit limit, so a $500 deposit gives you a $500 limit to use and pay back each month.
- Bank of America reports your payments to all three credit bureaus, so on-time payments directly improve your credit score.
- The card charges an annual fee (currently $35) and earns no rewards, making it purely a credit-building tool rather than a cash-back card.
- After 7 to 18 months of on-time payments, you may receive an offer to convert to an unsecured card and recover your deposit.
- Your deposit is held in a non-interest-bearing account, so you earn nothing on the money while it sits there.
How Your Deposit and Credit Limit Work
When you open the account, you choose how much to deposit. Bank of America's minimum is $500 and the maximum is $10,000. That deposit goes into a savings account that you cannot touch — the bank holds it as collateral. Your credit limit equals your deposit amount, so a $1,000 deposit means a $1,000 limit.
The deposit earns no interest while you hold the card. This is different from some other banks' secured cards, which pay a small percentage on the deposit. With Bank of America, your money sits idle.
If you miss payments or close the account, the bank can use your deposit to cover what you owe. If you pay on time and eventually convert to an unsecured card, the bank releases your deposit back to you — usually within a few weeks of the conversion.
Fees, Interest Rates, and What You'll Actually Pay
The Bank of America Secured Card charges a $35 annual fee, due every year you hold the card. This fee is charged to your account, so if you're not careful it can push you over your credit limit.
The card carries a variable interest rate on balances you don't pay in full. The exact rate depends on your creditworthiness and current market rates, but secured cards typically carry higher rates than unsecured cards — often in the 18% to 24% range. If you carry a balance, interest charges add up quickly.
The card earns no rewards — no cash back, no points, no travel benefits. This is standard for secured cards. You're paying for credit building, not perks.
To avoid interest charges, pay your full statement balance by the due date each month. This is the most cost-effective way to use the card.
Building Credit With On-Time Payments
Bank of America reports your account activity to Equifax, Experian, and TransUnion every month. This means every on-time payment you make gets recorded on your credit report and helps your credit score climb.
Payment history is the single largest factor in your credit score — it accounts for about 35% of your FICO score. Making your minimum payment by the due date each month, without exception, is the fastest way to improve your score with this card.
Most people see their score rise 50 to 100 points within the first 6 months of on-time payments, though the exact improvement depends on where you started and what else is on your credit report. If you have recent late payments or collections accounts, those will drag your score down even as the secured card helps it climb.
When Bank of America Converts You to an Unsecured Card
After you've held the card for a period of time — typically 7 to 18 months, though Bank of America doesn't publish a fixed timeline — the bank may send you an offer to convert to a regular unsecured card. This offer is not automatic; it depends on your payment history and credit score improvement.
When you convert, your deposit is released. The bank transfers it back to your checking or savings account, usually within 5 to 10 business days. You keep the same card account number, so your credit history with that account continues uninterrupted.
The unsecured version typically has a higher credit limit than your deposit was, and may have a lower annual fee or no annual fee at all. However, it still earns no rewards.
If the bank doesn't offer you a conversion, you can request one after 6 to 12 months of perfect payment history. There's no harm in asking — the worst they can say is no.
Comparing Bank of America to Other Secured Cards
Bank of America's secured card is straightforward but not the cheapest option. The $35 annual fee is higher than some competitors, and the deposit earns no interest. Other banks offer secured cards with lower fees or interest-bearing deposits.
However, Bank of America has advantages: it's a well-known bank with physical branches, customer service is available by phone, and the card reports to all three bureaus. If you already bank with Bank of America, opening the secured card is simpler because you can manage everything in one place.
If you're comparing options, look at the annual fee, the interest rate, whether the deposit earns interest, and how long other cardholders typically wait before conversion. No single card is best for everyone — it depends on your situation and what you value most.
What Happens If You Miss a Payment
Missing a payment on the Bank of America Secured Card has the same consequences as missing a payment on any credit card: the late payment gets reported to the credit bureaus and damages your score.
A payment 30 days late appears on your credit report and typically costs you 100 or more points. A payment 60 or 90 days late is worse. If you go 180 days without paying, the bank can close your account and use your deposit to cover what you owe.
If you're struggling to make the payment, contact Bank of America before the due date. They may be able to work out a payment plan or temporarily lower your minimum payment. Calling before you miss is always better than calling after.
Frequently Asked Questions
Can I increase my credit limit without adding more money?
Bank of America may increase your limit after you've held the card for several months and made on-time payments. When they do, they typically ask if you want to add more to your deposit to match the new limit, but they don't require it. You can keep your original deposit and have a higher limit based on your improved creditworthiness.
What if I need my deposit back before I convert to an unsecured card?
You can close the account and get your deposit back anytime, but closing the account stops the credit-building benefit and may hurt your score slightly. If you need the money urgently, closing is an option — but if you can wait, staying open longer helps your score more.
Does Bank of America check my credit when I open the account?
Yes, Bank of America performs a hard inquiry on your credit report, which may lower your score by a few points temporarily. However, because the card doesn't require a minimum score, the inquiry is the only barrier — they won't deny you based on your credit history.
Can I use this card to pay bills or buy groceries?
Yes. The Bank of America Secured Card works anywhere Visa is accepted, so you can use it for groceries, utilities, gas, or any other purchase. The goal is to use it regularly and pay the full balance each month to build credit without paying interest.
How long does it take to see my credit score improve?
Most people see movement within 30 to 60 days of opening the account, as the new account and first on-time payment get reported to the bureaus. Larger improvements typically appear after 6 months of consistent on-time payments. The longer you hold the card and pay on time, the more your score climbs.