Intended to jump-start your credit experience, the Kikoff Secured credit card has great initial appeal for credit newbies. It has a $0 annual fee, earns modest rewards, and does not require a credit checkwhich means you can get the card with bad credit (credit scores of 629 or lower), or even no credit.

But there’s a sneaky hidden cost to the Kikoff card that effectively puts its annual fee at almost $250. That’s a major asterisk.

For the right consumer, namely tenants who generally pay their rent on time, the Kikoff card could be a tool to improve their credit score. If you don’t want to pay a cent for a credit card, there are plenty of alternatives.

Here’s what you need to know about the Kikoff Secured credit card, issued by Coastal Community Bank.

The Kikoff card does not charge any annual fees or monthly fees, APR or foreign transaction fees. There is a $2.50 ATM withdrawal fee, but only if you withdraw money from an ATM outside the Allpoint network.

This is all well and good, but there is one very big caveat.

To benefit from the card, you will need a Kikoff Premium ($20/month) or Ultimate ($35/month) subscription. That means you’ll pay at least $240 per year to use the Kikoff card, which is an annual fee that rivals those of the most popular cards. premium credit cards on the market. The Premium and Ultimate plans have rent reporting as one of their main benefits, which can help you improve your credit scores. But if you don’t need this service, you can certainly find another secured card that is truly free to use.

Many secured cards require a security deposit of a few hundred dollars to open an account. The Kikoff Card doesn’t require a certain deposit amount, but you’ll probably want to have at least $50 on hand to unlock some of the card’s most essential features. A $50 deposit into a linked checking account is required for the Kikoff Card to report your credit activity to three major credit bureausand receive a physical card in the mail. (Once approved, a virtual card is immediately available in the Kikoff app.)

Deposits can be made by direct deposit, bank transfer, or cash deposit at an ATM.

According to Kikoff, the Kikoff Card is a credit card but “works like a checking account and a debit card,” which may appeal to those who want a certain degree of liquidity. You can use the Kikoff Card to withdraw money from the checking account linked to your Kikoff Card, but this reduces the card’s credit limit.

By design, the Kikoff card makes the credit experience as risk-free as possible. Card balances are automatically paid off using funds from the linked checking account, eliminating late fees and interest charges on unpaid balances. However, if and when you switch from the Kikoff card to an unsecured credit card, things won’t be so easy. You’ll likely pay high late fees and double-digit interest rates on unpaid balances, and if you want put your credit card bill on autopayyou will have to configure it yourself.

THE Discover it® Secured Credit Card may be better preparation for the “real” credit card experience. It’s the cardholder’s responsibility to make payments on time, and the APR is high, but Discover forgives the first late payment. It also allows you to earn rewards with every purchase. And Discover, unlike Kikoff, offers a number of unsecured credit cards in its portfolio that you can upgrade once you’re ready.

Kikoff cardholders can earn rewards in two ways: online offers and card-related offers. Participating merchants include Allbirds, Kindle and Jack in the Box.

To benefit from an online offer, go to the “Offers” tab in the Kikoff app or by clicking on the unique URL sent in a promotional email. Purchases must be made through the app or through Kikoff’s link to earn rewards.

Card-related offers are easier to access. Kikoff automatically enrolls cardholders in all available card-related offers. To earn rewards, simply complete a qualifying transaction under the offer terms and conditions.

It is possible to earn additional rewards on certain offers by making at least $500 in direct deposits into your Kikoff-linked checking account each month.

The only redemption option is to add rewards as credit to your Kikoff account balance.