The latest sign of the surging demand for secured credit cards comes from an Arkansas thrift which by legal necessity is offering what may be the lowest rate on such cards in the country.

Federal Savings Bank of Rogers, which has gained renown for offering low-rate credit cards that conform to the state's strict usury law, began making the secured product available nationwide in mid-November.

Secured cards generally appeal to people who need to establish credit or who have had past credit problems. The line of credit is collateralized by a deposit, which generally earns interest.

Security Minimum Is $300

Federal's products has a variable interest rate, currently at 8%, and requires a minimum security deposit of $300.

The issuer charges a $55 annual fee, and squeezes additional al revenue by allowing no grace period on purchases.

Cardholders may borrow an amount equaling up to 90% of the deposit. A gold version of the secured card, with a minimum deposit of $5,500 and a $70 annual fee, is also available. The maximum secured-card deposit is $10,000.

The extremely competitive interest rate can be attributed to an 11-year-old law that prohibits Arkansas lenders from charging more than 5% over the Federal Reserve discount rate.

"There is nothing we can do about [the law], so we have learned to live with it, turning a negative into a positive," said Clinton D. White, senior vice president and manager of the thrift's credit card division in Little Rock.

Federal Savings Bank of Rogers also offers unsecured low rate cards. A standard card has a 7.9% interest rate, a 25-day grace period, and a $33 annual fee.

Perhaps what is most interesting about an Arkansas institution offering a secured credit card is the fact that after the usury law was enacted, those Arkansas banks remaining in the credit card business tightened their lending criteria in order to remain profitable, earning a reputation for approving only customers who had spotless credit records.

Past Bankruptcy No Barrier

Federal Savings Bank of Rogers, however, is welcoming and approving applications for secured cards from people who have had past credit problems.

Said Mr. White, "Anyone who has been discharged from a bankruptcy can qualify for a credit card, as long as that person is not currently in arrears on their obligations."

Some issuers of secured cards stipulate that applicants cannot have past credit problems. If there was a bankruptcy, it must have been resolved a number of years earlier; it cannot appear on the applicant's credit bureau report. A bankruptcy customarily is not expunged from a consumer's credit file until 10 years have passed.

"We have been able to hold our operational expenses in line, so this is an excellent opportunity for us to reach new customers." said Mr. White.

He added that many of his new customers are from the East and West coasts.

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