Rates and fees: Annual fee might be too costly
Although it doesn’t require a security deposit, the Credit One Bank Platinum Visa for Rebuilding Credit is far from a low-cost card. The biggest potential cost to consider is the annual fee: $75 for the first year, then $99 per year after (billed at $8.25 per month).
Since the rewards rate is relatively low, the annual fee could make it hard to pocket any cash back. This is especially the case in the second year you hold the card, since you’ll need to spend at least $825 per month (or $9,900 per year) just to offset the $8.25 monthly fee with cash back rewards.
The card’s APR is also higher than the current average credit card interest rate, but this is common on cards designed for people with bad credit.
It’s important to note that if you make a card payment on your due date after 5:00 p.m. PST your payment might not be processed the same day. Unless you pay the optional express payment service fee, you could accumulate interest on any balance you’ve already sent a payment for and incur a late payment fee (up to $39).
Other fees include foreign transaction fees, credit limit increase fees, returned payment fees and cash advance fees.
Credit-building: No standout features
Outside of features like account alerts, zero fraud liability and free monthly credit score access, the Credit One Bank Platinum Visa for Rebuilding Credit doesn’t carry many extra perks — even for building your credit.
Credit One will regularly review your account for responsible card use to determine if you qualify for a credit line increase. With a higher credit limit, you may be able to keep your credit utilization lower, an important factor in determining your credit score. However, opportunities for credit line increase are typical for cards of this type.
You might opt for Credit One's Credit Protection Program, designed to prevent your credit score from dropping for up to six months. This program will cover your card’s minimum payment if you lose your job or become disabled.
You must wait at least 30 days after enrolling, however, to activate your protection – and you’ll still accrue interest on your account (which will be frozen while you receive benefits).
But combined with this card’s high rates and fees, the mounting interest you would accrue by carrying a balance on your card could lead to a costly cycle. Although the program will cover your card’s minimum payment, you’re still on the hook for the rest of the balance.
Since your protection and account can be forcibly closed if you’re 60 days past due or 20 percent overlimit, Credit One’s protection plan could end up costing more than other debt management options.