Navy Federal Credit Unition nRewards® Secured Card review

Quick highlights

• Rewards rate: 1 point for every dollar spent on all purchases
• Welcome offer: N/A
• Annual fee: N/A
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 18.00 percent

Current welcome offer

Like most other secured credit cards, the Navy Federal nRewards Secured credit card does not come with a welcome offer. This is to be expected on a secured credit card, but there are other options available that do have welcome offers. The Discover it® Secured Credit Card is one option that offers a Cashback Match™ for all rewards earned at the end of your first year.

However, the Discover it® Secured Credit Card is a bit of an outlier in the secured cards landscape. That the nRewards Secured card doesn’t have one should not come as a surprise.

Rewards rate

Unlike many other secured credit cards, the nRewards Secured earns rewards for every new purchase you make with the card. Secured cards are recognized as tools to establish and build back your credit, so it is never an expectation that they provide a healthy amount of cash back or points for purchases.

How you earn

You will earn 1 point for every dollar you spend on all purchases with your card. This is a better rate than other secured credit cards, but also falls a little short of more rewarding options that can reward as high as 5 percent back for travel purchases through an issuer’s portal. However, some of these cards with higher rates also have rewards caps or quarterly and annual limits. The nRewards Secured card doesn’t place any limit on the amount of points you can earn.

How to redeem

Navy Federal Credit Union allows cardholders to redeem points earned with their nRewards Secured card for merchandise, gift cards or cash back. These are a decent range of redemption options and certainly give cardholders plenty of opportunity to make the most of their rewards. However, cardholders looking to redeem points for travel or transfer them to travel partners are out of luck.

Every point you earn with the nRewards Secured card is worth about 1 cent when you redeem it for merchandise or gift cards through Navy Federal’s portal.

This is the base value of points across most credit cards according to Bankrate. Other secured cards earn points specific to the issuer or cash back that can be redeemed a variety of ways. Typically some redemption options grab a better point value. You won’t have to worry about weighing redemptions for the highest rewards value with the nRewards Secured card, however.

That said, your priority with this card shouldn’t be about earning and redeeming rewards in ways that are favorable or designed to maximize your earnings. This card’s first priority is as a credit building tool.

Secured credit cards are favorable options for credit builders, so perks offered on secured cards should double down on that accommodation. While the best perks and benefits are available for users with good credit on other cards, secured cards make getting there as easy as possible. The nRewards Secured card has a host of perks that bring convenience and protections while providing the tools necessary to remain a responsible credit user.

Account reviews at three and six months

After three months of holding your card, Navy Federal Credit Union will review your account to see if you’re eligible for an upgraded credit limit without providing additional deposits. This benefit is exactly the sort of flexibility cardholders need at this point in their credit journey. A higher credit limit will give cardholders more wiggle room when keeping their credit utilization below 30 percent. At six months, Navy Federal will review your account again for eligibility of having the hold removed so you can be upgraded to the cashRewards credit card.

Graduating to an unsecured credit card after only six months with a secured card is a great chance for budding credit builders to get on the right track with financial responsibility.

Collision Damage Waiver

Your Navy Federal card comes with an automatic Collision Damage Waiver. When you rent a car for 15 days or less and pay with your card, this coverage includes physical damage, theft, towing charges, loss-of-use charges from the rental company, your deductible and all other eligible amounts your insurance doesn’t cover.

Free credit score monitoring

Navy Federal provides access to free credit scores for primary cardholders. This feature is not reported to credit bureaus, so checking as often as you’d like to will not hinder your credit building progress.

It’s not uncommon to see secured cards that charge an annual fee, a processing fee or sometimes a combination of both. The nRewards Secured card skips these charges. Navy Federal Members need only open a savings account with a minimum $200 security deposit. That amount establishes your credit limit of the same amount.

Lower fees are an important benefit because any upfront cost you have to pay will instantly reduce your purchasing power and chip away at your credit utilization ratio, which can negatively impact your score if what you borrow is proportionately substantial to the limit you’re able to borrow.

The no-fee structure of the nRewards card will give you a better chance of using your credit line responsibly so you can build a stronger credit profile over time. The card also doesn’t charge foreign transaction fees — another plus, especially for Navy Federal members in the military who are stationed overseas.

That said, there are penalty fees for late and returned payments that can climb as high as $20.00. As far as the nRewards Secured card goes, however, it checks many of the boxes for things to look for on secured credit cards.

The nRewards Secured card from Navy Federal is a solid choice for service members who are often overseas and are just starting their credit journey. It has convenient, quick processes in place to get you from budding credit user to graduating to an unsecured card. That said, most other secured cards do this too. Some even do it while giving you better rewards rates.

nRewards Secured card vs. Capital One Platinum Secured Credit Card

The Capital One Platinum Secured Credit Card is Bankrate’s top choice for a secured credit card, so it should definitely be on your radar if the nRewards Secured card interests you. Although the Platinum Secured card does not earn rewards on purchases, it does let cardholders open an account with a deposit as low as $49 (Your minimum security deposit amount will be either $49, $99 or $200, Terms Apply).

Like the nRewards card, the Platinum secured also comes with no annual fee and no foreign transaction fees (See Rates & Fees), making it a good option for service members who are stationed overseas.The nRewards card offers a better credit increase time frame, however. Account reviews at three months for increased limits beats the Platinum Secured card’s six month review cycle. At six months with the nRewards card, Navy Federal may offer you an opportunity to graduate to an unsecured card and give you your initial deposit back.

Overall, neither of these cards really distract cardholders from what’s important at this point in their credit journey: spending responsibly and paying on time. Cards with more generous rewards programs can sometimes result in spending for the sake of what you may earn back.

nRewards Secured card vs. Discover it® Secured Credit card

The Discover it® Secured Credit Card is a great example of a secured credit card that comes with a generous rewards rate and a welcome offer. While the nRewards Secured rewards 1 point for each dollar spent on every purchase, the Discover it® Secured Credit Card awards 2 percent cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter and an unlimited 1 percent back on all other purchases. It has a higher rewards potential than the nRewards, but that should not make your decision one way or the other.

These features on a secured credit card in the hands of those who are new to credit may lead to overspending. This is especially true with Discover’s Cashback Match. This welcome offer will match all of the cashback you earn at the end of your first year. Since you’ll earn unlimited cash back with the Discover it® Secured Credit Card it can seem like an opportunity to rack up a nice pay out come year’s end. However, if a secured card is your only option, you want to make sure you lean into the more responsible practices that come with having a credit card.

Best cards to pair with the nRewards Secured card

It might seem difficult to find a card to pair with any secured card because your options are limited and you don’t really have a cash back or rewards strategy to keep in mind.

With this in mind, you want to look for a way to get the highest credit limit possible between all of your credit cards. This will give you more breathing room with your credit utilization, making it easier for you to build your credit score. However, with secured cards your credit limit will only be as high as you’re able to deposit.

The nRewards Secured card can certainly be worth it for service members who are stationed overseas and want access to a line of credit. It’s a solid credit building tool that can fast track you to an unsecured credit card, while giving you a nice chance to earn rewards in the meantime.

However, there are secured cards that are more rewarding. If you’re confident you can resist the temptation to overspend for the sake of earning rewards, then a secured card that earns slightly more for every purchase can’t hurt. Just be sure you’re focused on on-time payments and responsible credit habits.