5 Things to Know About the Imagine Credit Card – NerdWallet

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The Imagine Visa Credit Card, issued by WebBank, is an unsecured credit card for consumers who are looking to build their credit without having to make a security deposit. Unlike other starter credit cards, it offers decent cash-back rewards on useful spending categories.
There’s a big catch, though. The card’s fees (and interest rate, if you carry a balance) will eat into any rewards you earn and may wipe out that cash back entirely. Other credit-building cards with lower fees may be a better fit, even if their rewards programs aren’t as robust.
Here are five things to know about the Imagine Visa Credit Card.
» MORE: NerdWallet’s best starter credit cards
Secured credit cards require an upfront deposit that becomes your credit limit, which can be a hardship if the minimum deposit requirement is high. The Imagine Visa Credit Card has no such requirement and offers credit limits of $350, $400, $500, $700 or $1,000, depending on what you qualify for.
You can prequalify for the card without affecting your credit score. Only if you accept the offer will you be subject to a hard credit inquiry, which will have an impact on your score.
If you get the Imagine Visa Credit Card, your payment activity will be reported to the major credit bureaus.
» MORE: NerdWallet’s best unsecured credit cards for short credit histories
The Imagine Visa Credit Card earns:
3% cash back on gas, groceries and utility bill payments.
1% cash back on all other eligible purchases.
That’s a respectable cash-back rate for everyday purchases and monthly bills, especially for a credit-building card. Many other cards for this purpose offer little to no rewards.
However, there are two downsides to note. First, cash back is automatically redeemed just once a year as a statement credit. Other cash-back cards let you redeem whenever you accumulate a certain minimum amount of rewards, and some even let you redeem as little as a penny’s worth. So you’ll be waiting a long time to get what you earned.
Second, the cost of carrying the Imagine Visa Credit Card is high. More on that below.
The Imagine Visa Credit Card charges not just an annual fee, but it also charges a monthly account maintenance fee after the first year. Fee amounts differ depending on the credit limit you qualify for.
Initial credit limit
Annual fee
Account maintenance fee (billed after the first year)
$1,000
$175 for the first year, then $49 per year.
$150 annually, billed at $12.50 per month.
$700
$175 for the first year, then $49 per year.
$150 annually, billed at $12.50 per month.
$500
$125 for the first year, then $39 per year.
$120 annually, billed at $10 per month.
$400
$99 for the first year, then $39 per year.
$99 annually, billed at $8.25 per month.
$350
$85 for the first year, then $39 per year.
$87 annually, billed at $7.25 per month.
Let’s say you’re granted a $500 credit limit. That means in the first year, the card will cost $125 to carry (that’s just the first-year annual fee; the account maintenance fee won’t kick in until year two). You would need to spend $347.22 per month, or around $86.81 per week, on gas and groceries to earn $125 in cash back.
Now let’s look at the second year with the same $500 credit limit. The annual fee will now be $39, and the account maintenance fee will cost $120 for the year, so the card now costs $159. Now, you’ll need to spend $441.67 per month, or around $110.42 per week, on gas and groceries to earn $159 in cash back.
Depending on your typical food and transportation spending, it could be possible to more than offset the card’s cost. But if you don’t usually spend that much, those fees will exceed the value of the cash back you would earn.
» MORE: Annual fees? Several new credit cards are opting for monthly ones
As of this writing, the Imagine Visa Credit Card charges an APR of 19.24%–36%. It’s not unusual to see high interest rates on unsecured starter cards, but that upper limit is especially eye-opening. Since you can prequalify without affecting your credit score, shopping around for lower-interest cards can potentially unlock some savings.
» MORE: What is a good APR for a credit card?
Depending on the terms you qualify for, other cards may fit your needs and budget more closely. A no-annual-fee secured card is one contender. While the initial security deposit can be a steep cost, you’ll get it back once you’re ready to graduate to an unsecured card. Annual fees, on the other hand, are nonrefundable, so any money you sink into carrying the Imagine Visa Credit Card is gone forever.
The Discover it® Secured Credit Card has a $0 annual fee. It requires a $200 minimum security deposit, and after seven months, Discover will begin reviewing your account monthly to determine if you’d be eligible to switch to an unsecured card and get your deposit back. You’ll earn 2% cash back at gas stations and restaurants on up to $1,000 in combined spending each quarter, and 1% cash back on all other purchases. Plus, new cardholders can get a welcome bonus: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
The $0-annual-fee Capital One Quicksilver Secured Cash Rewards Credit Card also requires a $200 minimum security deposit that’s refundable once you switch to an unsecured card. Capital One will consider you for a higher credit limit in as little as six months with no extra security deposit. The card earns 1.5% cash back on all purchases.
» MORE: NerdWallet’s best secured credit cards
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