If you’ve been searching for a quick, no-questions-asked credit card that you can use to build your credit in a pinch, you might have come across the OpenSky® Secured Visa® Credit Card. This is a little card that makes big promises, so we thought it was worth investigating. If you’re thinking about trying out OpenSky for yourself, this primer should get you oriented.
Who is OpenSky for?
The OpenSky® Secured Visa® Credit Card is primarily built around two types of users: those with poor credit, and those with little credit history at all. The main benefit of this card is its lack of credit check, so it doesn’t put an immediate dent in your credit score, giving you an onramp onto the road to better credit. In fact, you don’t even need to have a bank account to set up an OpenSky account.
OpenSky wants you to know this; you need only to look at their marketing material to see the no-credit-check selling point placed front and center. Clearly, this card is designed for people who might otherwise struggle to get approved for a credit card. If you’re in this boat, OpenSky wants your attention.
No credit check, no bank account required -- this is the hook. So should you take the bait?
Maybe. That depends on how you feel about the terms.
What are OpenSky’s terms?
When you open a credit account with OpenSky, you’ll be putting down a deposit ( as low as $200 ), which will then become your credit limit. If you want, say, a $1,500 credit limit, you will have to put down a deposit of $1,500 ($3,000 is the maximum deposit amount). You don’t have to pay the deposit all at once; you can build it over time so long as you’re making your payments. Your deposit will be held in a FDIC-insured account, and it is refundable whenever you choose to close the account. Of course, if you read OpenSky’s website, this phrasing has an asterisk – it’s probably safe to assume that you won’t get your deposit back if you’ve failed to make payments.
Additionally, there’s a 17.39% APR. That’s actually pretty average – in fact, it’s less than we would have assumed – but keep in mind that it’s adjustable. Our guts tell us the rate is far more likely to slide upwards than downwards, though OpenSky claims it moves with the market.
There’s also an annual fee of $35. This is certainly not an enormous fee, but it’s more than you would expect to pay on a card without a rewards program (though, we suppose you could argue that the credit-building power of the card is the reward).
Lastly, this card has a 5% fee on cash advances (though $6 is the minimum fee), as well as a 3% fee for foreign transactions.
What are the benefits to using OpenSky?
As we mentioned in previous sections, the major benefit of the OpenSky ® Secured Visa ® Credit Card is that it can help you build a credit score if your credit history has some rough patches. OpenSky reports to all three major credit bureaus, which means you’ll be getting a hefty credit bang for your spending bucks.
You’ll get the absolute most out of this card if you apply some wisdom. Put down a deposit that you can afford, then use the card to pay for things you would already be paying for, such as groceries or your energy bill. Make sure you pay off the full amount when the bill comes due so you don’t start racking up interest. You can set email alerts if you’re worried about forgetting to make a payment, which hypothetically should make it less likely that you’ll forget (we say hypothetically, because it’s still easy to see an email reminder when you’re not ready to pay immediately, and then it slips your mind – it happens to the best of us).
Be wise and frugal. Make the card work for you, rather than becoming indebted to it.
The OpenSky ® Secured Visa ® Credit Card is designed to be an on-ramp card, one that allows you to build your credit from scratch until you get better situated. Of course, there’s a caveat to this: Once you’ve repaired your credit to an acceptable level, you’ll want to move on and get a different card – otherwise your deposit is sitting in a bank somewhere where you can’t access it, and you’re left with the task of paying the $35 annual fee. The problem is that if you cancel the card – which you will probably want to do – you’re risking another hit (albeit not an enormous one) to your credit score. In some ways, that makes this feel like you’re forced to take a step backward before you can continue to move forward again.
Of course, there’s a good chance that if you’re seriously considering OpenSky, you probably don’t have a lot of other options. In that case, this might be a good bet for you. Just keep in mind that, like so many things in life, this credit boost doesn’t come without a fair amount of time, energy, and good sense.