When you think of Capital One you may think of fun loving pillaging vikings invading the modern world like you see in their wildly popular commercials but there’s another side to the company you may not know about. Capital One is a relatively young bank that surged to the market in 2005 through a series of acquisitions and mergers and to this day continue to stand as a leader in the credit lending arena. The successful company also offers a credit card for people with bad credit which is the subject of our Capital One Secured Credit Card review.
Who should apply for a Capital One Secured Credit Card?
A secured credit card is a specially designed credit card designed for people with poor credit (below 660). For those not in the know, a secured credit card functions like a normal credit card, however, you’re required to put down a deposit in order to begin using your card and your deposit acts as the maximum you can spend on your card. If you should default on your payments the card issuer has the right to seek the funds from your initial deposit.
Features We Like About the Capital One Secured Credit Card
Reporting to the 3 Major Credit Bureaus – You most likely are seeking a secured credit card so that you can repair your poor credit. The Capital One Secured Credit Card reports all your payment history to the 3 major credit bureaus – Equifax, Experian, and TransUnion. This means that after a 3-6 months of use and no late payments, you’ll start seeing positive growth on your credit score. Remember that if for any reason you can’t make a payment to call Capital One and discuss it with your representative, many times they can work out an arrangement with you without negatively impacting your credit.
No Application Fees – Many secured credit card companies charge a application fee to process your information and issue your card. Capital One has waived the application fee which means all it will cost you is the deposit you put into your secured card savings account.
$3000 Card Maximum – Capital One allows you to put down up to $3000 on your card which is most than most card issuers. The minimum you can put down on your secured credit card varies between $49, $99 and $200 depending on how much of a risk the company thinks you may be. Regardless of which minimum deposit you make on your card you’ll be given a $200 credit limit. Any amount you add to that total goes towards raising your limit.
No Need to Pay Your Deposit all at Once – If you’re struggling to come up with your initial deposit, Capital One gives you up to 80 days to pay. As soon as you pay enough into your account to satisfy the deposit, they’ll send you your card.
Credit Line Increases – As long as you make timely payments and you don’t go over your limit, Capital One will raise your credit line based off your good performance. The better you are as a customer of the Capital One secured credit card, the more you’ll be rewarded by the company.
Transfer Your Balance for Free – If you already have a credit card balance that you’re transferring to your card then you won’t be charged any transfer balance fees by the company.
Free Account Notifications – Sign up for free e-mail and text alerts so you never miss a payment again.
What We Don’t like about the Capital One Secured Credit Card
High Interest Rate – Because the company hasn’t had a history with you and your credit score is already low, they naturally view you as a risk. This is to be expected of any company offering secured cards. Currently the card is at 22.9%. Pay your card off every month and you’ll never see the interest rate on the card.
No Rewards – The card has no rewards for your purchases but if you pay on time and keep up a good history then Capital One will soon upgrade you to their unsecured credit card program which offers many rewards and benefits.
Annual Fee – The Capital One secured credit card has a small fee of $29/yr but the company is also a little more lenient than other card issues that have no annual fees. It’s a small price to pay to fix your credit history once and for all.
Capital One Secured Credit Card Review
The Capital One Secured Mastercard is overall a great option for anyone looking to build up their credit history. With no application fees and the option to get started without having to put the full deposit down, there’s no reason not to sign up today. While many card issues charge 3%-5% to transfer your balance over, Capital One allows you to transfer your balance fee. As long as the small $29 annual fee is manageable for you you’ll be on your way to a 700 plus credit score in no time.
