The First Digital Credit Card is a genuine Mastercard® designed for individuals seeking to build or rebuild their credit profiles. Unlike secured credit cards, it doesn’t require a security deposit, making it accessible to those who may not have the funds for an upfront deposit. However, this accessibility comes with its own set of considerations.
Key Features of the First Digital Credit Card
Credit Building Opportunities: The card reports to all three major credit bureaus—Equifax, Experian, and TransUnion. This means that responsible use, such as making timely payments and maintaining low balances, can positively impact your credit score over time.
Application Process: The application is straightforward, with a quick online form that provides a response in as little as 60 seconds. Approval doesn’t require perfect credit, making it accessible to those with less-than-ideal credit histories.
Credit Limit: The initial credit limit is set at $300. However, after deducting the annual fee, your available credit starts at $225. It’s important to note that the card charges a 25% fee for any credit limit increase requests.
Cash Back Rewards: Cardholders earn 1% cash back on all payments made to their First Digital Credit Card account. Rewards are tracked as points, with 1 point earned for every dollar paid, equating to 1% cash back. Cash back is provided in the form of statement credits.
Fees and Interest Rates
While the First Digital Credit Card offers accessibility, it’s accompanied by several fees and a high-interest rate:
Annual Fee: $75 for the first year, reducing to $48 annually thereafter.
Program Fee: A one-time fee of up to $95 is due after approval to activate the card.
Monthly Servicing Fee: $0 for the first year; then $99 annually ($8.25 per month).
APR: A variable APR of 35.99%, which is significantly higher than average credit card interest rates.
Additional Fees: These include a cash advance fee (either $10 or 3% of the amount, whichever is greater), a $29 fee for adding an authorized user, and a 25% fee for any credit limit increase.
Pros and Cons
Pros
No Security Deposit Required: Unlike secured credit cards, there’s no need for an upfront security deposit, which can be advantageous for those without extra funds.
Credit Bureau Reporting: Monthly reporting to all three major credit bureaus can aid in building or rebuilding credit with responsible use.
Quick Application Process: The online application is user-friendly, providing decisions in as little as 60 seconds.
Cons
High Fees: The combination of annual, program, and monthly servicing fees makes this card expensive to maintain.
High APR: The 35.99% variable APR is considerably higher than average, making it costly to carry a balance.
Low Initial Credit Limit: With an initial limit of $300, reduced by fees, spending power is limited.
Fees for Credit Limit Increases: A 25% fee is charged for any credit limit increase, which is uncommon among credit cards.
Is the First Digital Credit Card Right for You?
The First Digital Credit Card may be suitable for individuals with poor or limited credit histories who are unable to secure other forms of credit. Its accessibility and reporting to major credit bureaus can assist in building credit when used responsibly. However, the high fees and interest rates are significant drawbacks.
If you decide to proceed with the First Digital Credit Card, it’s crucial to:
Pay Balances in Full: Avoid carrying a balance to prevent high-interest charges.
Monitor Credit Utilization: Keep your credit utilization low to positively impact your credit score.
Consider Upgrading: After improving your credit score, explore options for credit cards with better terms and lower fees.
Alternatives to Consider
Before committing to the First Digital Credit Card, consider these alternatives that may offer more favorable terms:
Secured Credit Cards: While they require a security deposit, many secured cards have lower fees and can be effective tools for building credit.
Credit Builder Loans: These are small loans designed to help individuals build credit. Payments are reported to credit bureaus, aiding in credit history development.
Other Unsecured Cards for Bad Credit: Some unsecured cards cater to individuals with poor credit and may offer more favorable terms.
Conclusion
The First Digital Credit Card provides an opportunity for individuals with poor or limited credit histories to build their credit profiles without the need for a security deposit. However, the high fees and interest rates associated with the card are significant considerations.