Capital One® Secured Mastercard®
If you’re looking for a way to build your credit and track your financial progress, you should definitely check out the Capital One® Secured Mastercard®.
Here are the details
Capital One makes the Secured Mastercard available to those who want a chance to rebuild their credit score without paying an excessive amount of fees. While many credit cards require you to have good to excellent credit, you could qualify for the Capital One Secured Mastercard even with a limited credit history or less-than-stellar 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.
New cardholders start off with a $200 line of credit with a security deposit. The amount of the deposit is $49, $99 or $200, but it can be paid in ($20 minimum) installments within the first 35 days of your application, which is 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.
Worthy addition to your wallet?
Those who need to improve their credit score will certainly find value in what the Capital One Secured Mastercard has to offer. However, there are a few drawbacks to consider.
Capital One requires 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.
Cardholders won’t earn rewards with this card. It’s a solid credit-building tool if you’re looking for a way to get back on track financially, but there are other cards available for those seeking rewards opportunities. If you have a high enough credit score to qualify for a card like the Capital One Quicksilver Cash Rewards Credit Card or Citi Double Cash Card, you’ll find more value in those flat-rate cash back cards.
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%
How to get the most value from this card
This is not a card built for long-term use, but rather a financial tool to help you build your credit score for a brighter borrowing future. Use these tips to take advantage of this card:
- Don’t spend more than you can afford to pay each month. Taking this one step will help you to avoid paying high interest rates or further damaging your credit score.
- Pay on time. Another great benefit of this card is that you can choose your own monthly due date and payment method.
- 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. 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.
- Once you’ve improved your score, ask to upgrade to a nonsecured card. Your security deposit is completely refundable if you close your account and pay in full. After you have successfully raised your credit score, ask Capital One about upgrading to a nonsecured card. Alternatively, considering applying for a card that offers rewards or other perks.