Capital One® Secured Mastercard®
One of the best secured credit card options for those working to build their credit, the Capital One® Secured Mastercard® offers more than just available credit to assist cardholders. The card charges no annual fee and offers the option to increase your credit line with only five on-time monthly payments. You’ll also gain access to CreditWise, which helps you monitor your credit score and track your financial progress.
Here are the details
Capital One makes the Secured Masyotercard available to spenders who need a chance to build or rebuild their credit in a simple and inexpensive way — if you’re willing to pay your balance off each month.
The biggest benefit of this card is that you could qualify even if you have a limited credit history or a poor credit score, as long as you have a bank account to fund the security deposit. The card reports to the three major credit bureaus, meaning that you can use it responsibly and improve your track record for future borrowing.
For no annual fee, the Capital One Secured allows you to open a $200 line of credit with a security deposit. The amount of the deposit is dependent on your creditworthiness, but it can be paid in ($20 minimum) installments within the first 35 days of your application, another big benefit for those trying to get on their financial feet. The deposit is held as collateral against what you borrow and is refundable once you pay off and close your account.
You can increase your credit limit in two ways: by making on-time payments for five consecutive months, or by increasing the amount of your security deposit (up to a credit limit of $1000) within the first 35 days of approval.
Is this card right for you?
Do you want a way to build credit or improve your credit score? Then it certainly could be the right card for you.
While the simplicity of the Capital One Secured Mastercard means that it doesn’t offer flashy perks or rewards, it does offer what anyone who wants to get back to basics needs — a clear path to a better credit score and access to personalized credit education without an annual fee.
Capital One does require that you have a bank account to fund the security deposit, and you will need $49, $99 or $200, depending on your credit score available as collateral. You do have 35 days to pay the deposit, however, should you need a few days to get your ducks in a row.
Discipline is a factor as well. You can’t get into too much trouble with the beginner’s initial credit line of $200, but the ongoing APR is a variable 26.99%, which will add up quickly if you don’t pay your card off every month. The Secured Mastercard is a great way to start healthy credit habits, so this card could work really well for you if you keep your spending within your monthly budget.
Fees and APR
- No annual fee
- No foreign transaction fee on purchases made outside of the United States
- Purchase APR is a variable 26.99%
Extras and perks
- This card comes with Platinum Mastercard benefits, including travel and auto insurances and protections.
- You can increase your credit limit up to $1,000 by making additional deposits up to the amount you want (within 35 days of being approved and before you activate your card)
- Get free access to CreditWise, a credit education tool.
- Choose your own monthly due date and payment method.
How to get the most value from this card
The biggest advantage of the Capital One Secured Mastercard is that it can be your ticket to a better credit score and a brighter borrowing future, at lower rates. Take the following into consideration as a new cardholder:
- Don’t spend more than you can afford to pay each month. Taking this one step will help you to avoid paying exorbitant interest rates or racking up a monthly payment that you can’t afford to pay on time.
- Pay on time, every time. Another great benefit of this card is that you can choose your own monthly due date and payment method, so choose wisely. Remember that paying on time is the single most important thing you can do to improve your credit!
- Use CreditWise. Having free access to your credit report and other tools will enable you to track your progress (with the added benefit of fraud alerts!) It even includes a credit score simulator, to help you guesstimate the impact your financial decisions will have on your score.
- Increase your limit, if you dare. After five months of timely payments, you can request a credit limit increase from Capital One. Having more available credit is also good for your credit score, as long as you don’t use it all up.
The bottom line
The Capital One Secured Mastercard is a solid choice if you’re serious about getting credit-savvy. There’s a safety net in both the security deposit (which can be used if you default on your payment) and the low initial credit limit, but there’s also room to grow for those who do well with a little bit of credit at a time.
The only real danger is the high APR, so be absolutely sure to keep your spending within your budget so you don’t get in over your head with interest.
There are other options for secured cards that offer rewards, such as the Discover it® Secured, but if you’re wanting to keep it simple, Capital One has what you need.