The Neo Secured Card is making waves in the market, with many people praising its low barrier to entry and good rewards. But is it really worth the hype?
In this review, we'll dive into what the Neo Secured Card is all about, its features, the eligibility criteria, and how to apply for it. We'll also explore the important questions of whether this card can actually help you boost your credit score and whether it's as good as people claim it to be.
So, let's get started and find out if the Neo Secured Card is the right fit for you!
About Neo Financial
First, a little bit about Neo Financial. Despite offering innovative financial products, Neo is not actually a traditional, registered bank. Rather, it is a financial technology company that creates partnerships with established financial organizations, such as Mastercard, Concentra, and ATB Financial, to provide low-fee, digitalized financial products.
With a focus on technology, Neo offers money accounts, credit cards, investments and mortgage options that cater to the needs of modern-day consumers. The company has no in-person branches, which means it can pass on its savings on infrastructure to its consumers, offering little to no fees and great cashback perks.
Neo Financial was built by the founders of SkipTheDishes, a Canadian online food delivery service that was sold in 2016 for $110 million. As of 2023, Neo has more than 750 employees and has raised nearly $300 million in funding.
Introducing the Neo Secured Card
The Neo Secured MasterCard is a good credit card option for those who have a relatively lower credit score. As the secured version of Neo’s “traditional” Mastercard, it requires a refundable security deposit, which serves as collateral for the credit limit. With responsible use, the cardholder can increase their credit score and eventually graduate to an unsecured credit card (more on this later.)
The Neo Secured Card offers a low annual fee and cashback rewards on eligible purchases. It also provides real-time spending notifications and other features that make it easy to manage your finances. If you're looking for a secured credit card, the Neo Secured Card is definitely worth considering, but not before exploring all of the card’s features in detail, which we will do so now.
What to expect from your Neo Secured Card
Now that we have loosely covered what the Neo Secured Card is, let’s go over all of its features in detail.
Fees and interest
One of the best things about the Neo Secured Card is its low barrier to entry. With many secured cards on the Canadian market requiring a security deposit of anywhere between $300 to several thousand dollars, Neo’s $50 minimum is truly unique. Of course, you may also put down more security funds for a larger spending limit, but this is completely up to you.
Other than the incredibly flexible security deposit, this card also has no monthly or annual fees. It does, however, charge $2.50 per cash advance within Canada ($5 for international cash advances) and a 2.5% flat fee for foreign exchange transactions. Both of these fees are pretty standard when it comes to credit cards, but they are still good to keep in mind.
On the purchase interest rate side of things, Neo has a sliding scale depending on your credit profile, your credit application and your province of residence. For regular purchases on your card, the interest rate ranges from 19.99% to 26.99%. For cash advances, on the other hand, the range is between 22.99% to 28.99%.
Unfortunately, the upper limit of these ranges is higher than the market average. If you end up being offered one of these higher rates, it is recommended that you avoid carrying a balance on this card, at least until you qualify for a lower rate or an unsecured credit card at another company.
Cashback and perks
Many no-fee and secured cards on the market don’t offer good cashback and perks. The Neo Secured Card, however, is an exception.
Upon receiving your card, you can immediately benefit from a cashback incentive when you use your card to shop at Neo partner stores, receiving an average of 5% instant cashback. Moreover, participating stores, such as Earl’s Restaurants, Herschel, Boston Pizza, and Well.ca, offer a 15% cashback reward for first-time purchases. The rewards are instant and can be tracked on your mobile app.
Another perk is that even if your instant partner cashback is less than 0.5% across all other purchases, Neo guarantees a minimum of 0.5% cashback each month. Once you accumulate enough, you can use your reward points to pay your credit balance or redeem them for gift cards, merchandise or even investments.
You may have heard from current or previous Neo customers that Neo does not actually report to major credit monitoring agencies, thus not actually helping you build your credit score over time. Whether or not this is actually the case is a valid question. After all, if your secured card is not helping you build your credit, is it even worth getting one when you could just use a debit card?
While this issue is a cause for concern, we’ve cleared things up for you. As of April 2023, Neo is reporting to TransUnion on a monthly basis (but not Equifax.) All previous transactional history has been retroactively captured.
This means that it is possible that your credit score looks different on TransUnion and Equifax. If building or rebuilding your credit score is your primary concern, it might be worth considering another credit card to build up your credit score. Otherwise, your score will be improving on TransUnion over time, given that you pay your balances.
Since Neo is a financial technology (fintech) company, its user experience is above average. With their secured and unsecured cards specifically, users can take advantage of great spending insight tools that are built into their app for better budgeting and financial management.
More specifically, users can easily view their spending by both month and by category, including their lifetime averages, and get a straightforward snapshot across all of their Neo accounts. They can also keep close track of their cashback, find nearby stores that Neo partners with for extra reward perks, easily toggle between accounts and get security notifications if necessary.
In terms of customer service, users can get in touch with the company via live chat, which is available every day from 7 AM to 8 PM Mountain Time (MT.) Since Neo is a fully digital company, don’t forget that they have no in-person branches, so all interactions with the company have to be through virtual/digital means.
As mentioned earlier, the Neo Secured Card has very low barriers to entry, which is great. In order to be eligible, all applicants must simply be the age of majority in their province/territory of residence, be a Canadian resident and provide a minimum of $50 in security funds. If you meet all three of these criteria, Neo claims that approval is guaranteed.
Since this is a secured card, there are no credit score or income requirements for this card. The company will not perform a hard credit check, just a soft one to determine your purchase and cash advance interest rates.
If you decide to close your Neo Secured Card, or move over to their regular Mastercard after building up your credit score, don’t fret, you will be getting your security funds back (assuming your account is in good standing!)
How to apply for the Neo Secured Card
Happy with what you have read so far? If so, you may be considering applying for the Neo Secured Card. Here’s how to do that (hint: it’s very easy.)
Before you head over to the Neo Financial website to fill out an application, make sure that you fulfill the eligibility criteria for the Neo Secured Card. To reiterate, these are:
– Being a Canadian resident (permanent resident, citizen, refugee, student, etc.)
– Being the age of majority in your province/territory of residence
– Being able to provide a minimum of $50 in security funds
If you fulfill these, you are eligible for the Neo Secured Card. The whole application process is meant to take less than five minutes. It involves setting up your Neo profile and making an application for the Neo Card.
Given that you meet the criteria, Neo guarantees that your application will be approved. Do note that, however, some applicants claim that they have gotten their Neo Secured Card applications denied due to their low credit scores. So, although Neo markets and claims differently, it’s still good to keep this possibility in mind.
In addition, don’t forget that applying for a Neo Secured Card does not require a hard credit check. This means that your application will not be reported on your credit report and have no negative implications for your score, which is great.
Final thoughts on the Neo Secured Card
While there are several secured cards on the Canadian market, Neo’s Secured Card is one of a kind. With no annual fees, great perks and a low barrier to entry, it can be a good fit for most consumers in Canada.
If you are struggling with your credit score or simply don’t want to deal with going through a hard credit check, then this card might be a good fit for you. If you do get it, don’t forget to let us know your thoughts!
Frequently asked questions about the Neo Secured Card
Here is a rapid-fire question-and-answer section for all your burning questions about the Neo Secured Card.
You can pay for your Neo Secured Card either through your Neo Money Account or a chequing account at any other financial institution. The former is instantaneous, whereas paying from an external bank takes about one to three business days to go through.
To pay from your Neo Money Account, simply log on to your Neo account through a web browser or the app and click on “Pay.” To pay through another financial institution, you must first add Neo Financial as a payee through digital or branch banking and link up your card. Once you do this, you can pay your bill through your external bank account.
Neo is not technically a credit card company. Rather, it’s a Canadian financial technology that partners with ATB Financial (a financial institution and Crown corporation owned by the province of Alberta) and Mastercard to provide credit cards for consumers.
As of April 2023, both the Neo secured and unsecured credit cards can help you build your credit, but only with TransUnion. This is because Neo does not report to the other major credit organization in Canada, Equifax.
Once you make sure that you meet Neo’s three criteria for the Secured Card, you can apply on their website. The process is supposed to take about five minutes, and Neo claims that approvals are guaranteed.
Do note that some applicants claim that they have gotten their Neo Secured Card applications denied due to low credit scores. So, although Neo markets and claims differently, it’s still good to keep this possibility in mind.