Credit One Bank® Platinum Visa® for Rebuilding Credit review: An expensive way to rebuild credit

It can be difficult to find the right credit card when you have bad credit, especially if you want to earn rewards, avoid annual fees and find a manageable APR.  

Secured credit cards are the most common type of card available to people with bad credit, but they require a security deposit. If you want to avoid the deposit then your options are limited to a handful of cards, including The Credit One Bank® Platinum Visa® for Rebuilding Credit.  

It seems like an incredible deal at first: It’s an unsecured credit card (meaning no security deposit is needed) that also earns cash back on everyday purchases. However, this card’s APR is very high, and its annual fee can climb as high as a fee on a premium rewards card.If you’re focused on improving your credit score there are plenty of less expensive options that don’t require any credit history, but these would likely require a deposit. The Credit One Bank® Platinum Visa® for Rebuilding Credit could be worth its cost as a short-term solution without having to make a deposit. However, a secured card can be a more sustainable choice in the long-term if your goal is to achieve fair or good credit.

Quick highlights

• Rewards rate: Earn 1% cash back rewards on eligible gas, grocery purchases and mobile phone service, internet, cable and satellite TV services (Terms apply)
• Welcome offer: N/A
• Annual fee: $75 the first year, then $99 ($8.25 per month)
• Purchase intro APR: N/A
• Balance transfer intro APR: N/A
• Regular APR: 28.74 percent (variable)

Current welcome offer

The Credit One Bank Platinum Visa for Rebuilding Credit does not come with a welcome offer. This is common for credit cards available at this credit level. However, a welcome offer shouldn’t be your focus if your goal is to rebuild credit. The lack of a bonus could even work in your favor if you would otherwise be tempted to spend more just to earn it. 

That said, if you must have a welcome offer you might be better served by a secured card with no annual fee, like the Discover it® Secured Credit Card. This secured option offers a Cashback Match, Discover will automatically match all the cash back you've earned at the end of your first year.

Rewards rate

Credit One’s prequalification form is also an application for any of the four different Credit One Bank Platinum Visa cards. These similarly named cards carry different cash back programs. Unfortunately, you won’t know which of them you prequalify for until Credit One reviews your application and selects one or more based on your creditworthiness.

The odds are you’ll qualify for the Credit One Bank Platinum Visa for Rebuilding Credit if you have bad credit. This option has the most basic cash back program and one of the highest annual fees among Credit One cards. 

How to earn

The Credit One Bank Platinum Visa for Rebuilding Credit earns unlimited 1 percent cash backon eligible gas purchases, grocery purchases, mobile phone service subscriptions, internet service subscriptions and cable and satellite TV service purchases. Credit One’s system to track which purchases earn rewards is different, however, from that of most other Visa credit cards. Instead of using typical merchant category codes (MCCs), Credit One Visa cards use “Standard Industrial Classification Codes.”

These two work similarly, but it can be harder to track which stores earn cash back using Standard Industrial codes. Though this is a small difference, it’s important to keep in mind if you’re unsure which category your favorite merchants fall under. This also means that if you have multiple Visa cards, they may not earn rewards at the same locations.

How to redeem

You don’t get to choose how you redeem rewards with the Credit One Bank Platinum Visa. Your cash back rewards are automatically added to your account as a statement credit on each billing cycle’s statement.

While more flexibility is great, having rewards automatically applied to your balance as a statement credit is a low-hassle benefit. Cards with multiple redemption options usually come with choices that are valued differently from one to the next. With Credit One’s simple redemption model you’re guaranteed to get the full amount of your cash back every statement.

Credit One’s rewards system works like many other cash back programs. You’ll earn 1 cent back per dollar on eligible purchases (terms apply). For instance, if you spend $10 at an eligible grocery store, you’ll earn 10 cents back. If you spend $100, you’ll earn $1 back.

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.

The card’s most prominent benefits include potential credit limit increases, two card-linked rewards programs and a “Credit Protection Program” of questionable value.

Credit limit increases

Credit One will regularly review your account for responsible card use to determine if you qualify for a credit line increase. This may allow you to access a higher credit limit which can make building credit easier. Credit utilization is an important factor in determining your credit score. You may be able to keep your utilization lower with a higher available credit limit.

If you were to opt for a secured credit card, sometimes the only way to increase your limit is with a higher deposit. 

Credit One More Cash Back Rewards and Visa Offers + Perks

Credit One Bank Visa cards offer access to two programs that you can use to earn extra cash back and discounts. By linking your card and shopping with participating retailers, Credit One’s More Rewards and Visa Offers + Perks stack extra rewards or discounts on top of your original earnings for eligible purchases. These programs work similarly to Amex Offers or Chase Offers. Issuer-run rewards programs like these that come on some of the best credit cards available. 

More Rewards provides deals that offer up to 10 percent bonus cash back, while Visa Offers + Perks is tailored toward online shopping, apparel and dining discounts with select businesses.

Select Visa Traditional perks

As a basic Visa Traditional credit card, your Credit One Bank Platinum Visa for Rebuilding Credit comes with zero fraud liability. This can give you one less thing to worry about if you lose your card, if someone makes an unauthorized purchase with it or if someone steals it. 

Credit Protection Program

The optional Credit Protection Program outlined in the card’s prequalification terms is designed to prevent your credit score from dropping for up to six months. This program will cover your card’s minimum payment in the event you lose your job or become disabled.

You’ll have to 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).

Combined with this card’s rates and fees, the mounting interest you would accrue by carrying a balance on your card could lead to a more 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.

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 higher than the current average credit card interest rate, but this is common on cards designed for people with bad credit. 

It’s also 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 anybalance you’ve already sent a payment for and incur a late payment fee (up to $39).

A few other potential rates and fees to be aware of before you apply are 3 percent (or $1, whichever is greater) foreign transaction fees, credit limit increase fees (based on your payment history and creditworthiness; disclosed in advance if imposed for processing a request), up to $39 returned payment fees and cash advance fees of either $5 or 8 percent of the amount of each transaction, whichever is greater.

When you have bad credit and want a new credit card, you should first decide whether you want a secured credit card or an unsecured credit card. Despite higher upfront costs as a result of refundable deposits, secured credit cards could be better options for building credit. They can come with fewer potential costs than the Credit One Bank Platinum Visa for Rebuilding Credit and often include plenty of credit building features.

There are plenty of cards for people with no credit history that may be more straightforward and even easier to get than Credit One’s cards. It can be helpful to compare your options with one another to decide which one works best for you.

Credit One Bank Platinum Visa for Rebuilding Credit vs. Discover it® Secured Credit Card

The Discover it® Secured Credit Card can be a stronger choice than the Credit One Bank Platinum Visa for Rebuilding Credit if you can spare a couple hundred dollars to meet Discover’s minimum deposit requirement. It offers boosted cash back rates in select categories, comes with a welcome offer and doesn’t charge an annual fee.

You can earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, giving you more rewards potential than you have available on the Credit One Bank Platinum Visa for Rebuilding Credit. Discover will automatically match all the cash back you've earned at the end of your first year. This gives you the potential to earn a sizable bonus, but it could burden you with the temptation to earn more cash back by overspending. 

To access these benefits you have to make at least a $200 security deposit, which the Credit One Bank Platinum Visa for Rebuilding Credit does not require. 

Although the Discover it® Secured Credit Card can be a more rewarding option, that alone should not make your decision. If you’re strapped for cash, you might only be able to afford the annual fee on Credit One’s card. Since Credit One’s annual fee is lower than Discover’s minimum deposit requirement, you can get started with a $300 credit limit even if you don’t have $300 to deposit. Still, the Discover it® Secured Credit Card could be worth the temporary price tag. Discover does automatic reviews starting at 7 months to see if we can transition you to an unsecured line of credit and return your deposit.

Credit One Bank Platinum Visa for Rebuilding Credit vs. Capital One Platinum Secured Credit Card

A great choice if you want to focus on rebuilding your credit score, the Capital One Platinum Secured Credit Card offers good approval odds even for applicants with bad credit. It comes with no annual fee and you can get a $200 credit line with a deposit of just $49. Your credit limit traditionally matches your deposit on most secured cards, so the Capital One Platinum Secured is a solid choice for anyone who can’t, or is unwilling to, deposit hundreds of dollars to access a decent credit limit. This alone makes it a strong alternative to the Credit One Bank Platinum Visa for Rebuilding Credit. 

A major downside is that, unlike the Credit One Bank Platinum Visa for Rebuilding Credit, the Capital One Platinum Secured card doesn’t earn rewards. However, the Credit One Bank Platinum Visa for Rebuilding Credit only earns 1 percent back on purchases. This can make it difficult to make up the card’s annual fee, putting you in the negative. With the Capital One Platinum Secured card this won’t be an issue because you’ll get your $49 deposit back when you either upgrade to an unsecured card or close your account in good standing. 

The Credit One Bank Platinum Visa for Rebuilding Credit doesn’t carry the same refundable (but expensive) upfront cost as a secured credit card, but it does come with a costly annual fee that will be difficult to offset with its limited 1 percent cash back. The card may be a decent option if you have bad credit, but sometimes depositing money to open a secured card with a larger credit limit can be a more effective strategy as you work on improving your credit score.

Simply put, there are better credit cards available that accept applicants with a less-than-ideal credit history, and your pool of options deepens considerably if you have fair credit.

*The information about Credit One Bank® Platinum Visa® for Rebuilding Credit has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.