Despite the name, the Fit Mastercard has nothing to do with physical wellness. Instead, it’s all about improving your financial fitness, providing a viable option for individuals with bad credit who want to build up their credit score muscle. Since credit rebuilders are the card’s target market, the Fit Mastercard has some features that assist with that goal. Here’s a look at how the Fit Mastercard can help you improve your credit and whether it might be right for you.
Monthly Report to Major Credit Bureaus
When you need to improve your credit, finding a card that reports to all three major credit bureaus is essential. Surprisingly, not all cards report to Experian, Equifax, and TransUnion. Instead, they may only report to one or two. When this happens, your good behavior won’t help your score at the bureaus that don’t get updates on your activity.
With the Fit Mastercard, you don’t have to worry about that. The issuer provides monthly reporting to all three of the major credit bureaus. As long as you act responsibly, your score should go up at each one.
No Security Deposit Required
Some credit cards for borrowers with poor credit require security deposits. Usually, this allows the issuer to secure the debt, reducing their risk. However, not everyone can afford to send over a deposit. Luckily, if you want to build your credit with the Fit Mastercard, you don’t have to worry about one. The issuer doesn’t require a deposit as the card is unsecured.
Competitive Starting Limit for the Category
Credit cards for bad credit borrowers usually come with low limits. Issuers reduce their risk by restricting how much a person can access, especially if the borrower doesn’t have a great history.
With the Fit Mastercard, the starting limit is competitive within the poor credit landscape. It begins at $400 for everyone. Then, if you act responsibly, the issuer may raise the limit periodically.
The ability to see your limit rise can actually help your credit. Your credit score is impacted by your credit utilization ratio, a fancy term for the amount of available credit you actually use. If you keep your balance low, you positively impact your score. At times, this is easier to do if your limit is higher.
While it’s always best to pay your card off in full every month, if you do maintain a balance, aim to keep it below 20 percent of your limit. That way, your score has the potential to improve.
High Interest Rate and Fees
If you want to improve your credit score with the Fit Mastercard, then you need to be prepared for the high interest rate and fees. The annual percentage rate (APR) is a variable 29.99 percent, which is incredibly high. Carrying any balance at all could allow your interest charges to pile up fast. Then, if your balance grows instead of shrinks, you could hurt your credit score instead of help it.
Additionally, a series of fees is also going to impact your balance. There’s a one-time processing fee of $89, taking up nearly 25 percent of your initial $400 limit. There’s also a $99 annual fee, representing another 25 percent of your starting limit. Then, after 12 months, you’re stuck with a $6.25 monthly maintenance charge, which adds up to $75 a year, which is just below 20 percent of your initial credit limit. If you don’t pay those fees off fast, your credit utilization ratio will suffer, hurting your credit score.
But that’s not all. If you mess up with your payments, there are more fees. For a late payment, that can cost you up to $39. The returned payment fee is also as much as $39.
If you want to improve your credit with the Fit Mastercard, then you need to do what you can to manage and avoid fees. For those you can’t prevent, pay them off in full whenever they hit your account. This keeps them from hurting your available credit line, and you won’t have to pay interest on those amounts. Also, make your payments on time every month, ensuring you are dealing with late or returned payment fees.
Is the Fit Mastercard Right for You?
If you have bad credit and need to rebuild, the Fit Mastercard is a viable option. Your approval chances will be reasonable in many cases. Plus, you don’t have to pay a deposit, which is great for anyone who doesn’t have enough cash to handle one.
However, there are other cards in this category that have fewer fees and potentially lower interest rates. It’s best to shop around before you settle for the Fit Mastercard. If you qualify for something with better terms, go that way instead. But, if you don’t and you need to rebuild your credit, you can with the Fit Mastercard. Just avoid carrying a balance, pay off the fees as soon as they hit your account, and keep up with your payments. Then, as soon as your credit reaches a new tier, look for a card that fits your new score and has better terms.
Do you know of another card like the Fit Mastercard that can help a person improve their credit? Do you have any additional tips for those working to increase their credit score? Share your thoughts in the comments below.
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