The “Capital One Secured Credit Card” is designed for those looking to establish or rebuild credit. Known for its ease of qualification and low fees, this secured card offers both benefits and some limitations. Let’s look at how it works and assess its advantages and potential drawbacks.
Capital One® Secured MasterCard®
The Capital One® Secured MasterCard® Credit Card has several features that make it popular among secured credit card users. The card has no annual fee which is rare for a secured credit card, but the APR is higher than the alternatives.
You may get a credit line larger than your deposit
Easy to qualify
Reports to all 3 major credit bureaus
Access to your credit reports and score
No Annual Fee
Automatic upgrade to an unsecured card if you qualify
Requires a security deposit
Credit Check Required
What’s The Capital One® Secured Credit Card?
The Capital One secured MasterCard® was created by Capital One® and has become one of the most popular well-rounded secured cards in the space.
The card gives you all the advantages of credit card use. It also helps you build a credit history by reporting to all three major credit reporting agencies. You have the ability to create your own credit limit.
Like most secured cards, it requires an initial security deposit once you get approved. The deposit protects the issuer if you fail to pay, allowing Capital One to issue these cards to people with low credit scores.
Who Is Capital One?
While Capital One might seem like a 100-year-old company, they were actually founded in 1993.
They go by the name Capital One Financial Corporation, and along with being a bank holding company they also focus on credit cards, auto loans, and banking.
They are one of the largest banks in the U.S. by assets and are the 2nd largest auto finance company in America.
What Makes Capital One® Secured Credit Card Different?
What makes Capital One Different is that they offer significant additional benefits with their cards.
You will get free access to your credit report and score. You can also be upgraded to a regular unsecured card if you make your payments reliably.
Unlike many secured cards, your Capital One Secured Card deposit does not automatically become your credit limit. Some applicants, depending on their creditworthiness, may receive a credit line greater than their deposit. You may be able to secure the minimum $200 credit line with a deposit of $99 or even $49.
Did we mention that there is NO annual fee?
Capital One Secured Credit Card Rates & Fees
Below are all the fees associated with the Capital One® Secured MasterCard®:
- Interest rate: 30.49% Variable APR
- Annual fee: $0
- Rewards: None
- *Security deposit: $49, $99, or $200 minimum for a $200 credit line, depending on your creditworthiness.
- Foreign transaction fee: None
- Cash advance fee: Either $3 or 3% of the amount of each cash advance, whichever is greater.
- Late payment fee: Up to $40.00
- Balance Transfer fee: None
*With secured cards, you will need to provide a refundable security deposit, which determines what your initial credit limit will be. The credit card company holds that deposit in case you don’t pay your bill.
The absence of an annual fee is a strong selling point, but the APR is on the high side. If you pay your balance in full and on time, that won’t matter, because you won’t pay interest.
Capital One® Secured Mastercard® Features
The Capital One® Secured MasterCard® Credit Card is packed with several features that make it a top choice in the secured credit card market.
The main features of this card include:
- Easy Online Application Process
- Free Access To Your Credit Report & Score
- Monthly reports to all three major credit bureaus
- Potential for a credit line larger than your deposit
- Manage your account 24/7 with online access, or using their mobile app
- No annual fee
- Automatic upgrade to an unsecured card with responsible use
As with any credit card, you’ll need to manage your card wisely to get the full credit-building benefits. If you don’t, you could end up harming your credit score instead of helping it.
Credit Wise Program By Capital One®
The Credit Wise® program with Capital One® is a great benefit that most secured cards don’t offer. This program gives you free access to your credit report and credit score.
You will be able to view your TransUnion credit report and VantageScore 3.0 credit score. You will also get email alerts when your credit report changes with TransUnion and finally you will receive fraud alerts if anything suspicious happens on your TransUnion or Experian credit reports.
Signing up for Credit Wise is very simple, and you have access as soon as you are approved for your account.
Understanding Your Security Deposit
It is essential to consider what you want your initial security deposit to be. It will affect your credit profile.
With Capital One®, your initial deposit can be as low as $49.00, but your initial limit will still be $200.00.
But here’s the thing, most creditors will determine your future credit limits based on your current highest limit. A higher credit limit also makes it easier to keep your credit utilization low.
You can raise your limit up to $1,000 by increasing your deposit. That means you can add $100 a month to your deposit for 8 months after your initial $200 and have a $1,000 credit limit.
Requesting A Credit Limit Increase
No matter the type of credit card that you have with Capital One, requesting an increase is the same:
- Log in to your account.
- Click on the “view account” button.
- Click on the Gear icon that says “I Want To…”
- Hit the “Request Credit Line Increase” button.
- Complete the short form & submit It.
If you are approved for an increase, it will become available immediately. There’s no hard credit inquiry.
Upgrading Your Capital One Secured Card
If you use your Capital One® Secured MasterCard® Credit Card responsibly, Capital One will automatically upgrade your card to an unsecured card. Your deposit will be refunded as a statement credit. It will be applied to your future bills.
You don’t have to request an upgrade. Capital One will upgrade your card when you are eligible and notify you.
Your APR, due date, credit limit, and other terms will remain the same unless Capital One informs you of changes.
Steps To Take After You’re Approved
The real work starts once you have been approved for your Capital One Secured MasterCard Credit Card.
1. Monitor Your Credit
Monitoring your credit is a key part of trying to build or rebuild your credit. Keeping an eye on your credit reports will help you understand your credit and your finances and can give you an early warning of identity theft.
You should try to find a service that allows you to monitor all 3 of your reports.
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2. Pay In Full and On Time
Making on-time payments sounds simple, but sometimes it isn’t. We all live in the real world, where things almost never go as planned.
It’s not always easy, but it’s important to make all payments on time. Late payments will trigger costly late fees and do serious damage to your credit. If you’re not sure if you’ll be able to make payments, minimize spending on your card.
It’s also important to pay your balance in full. If you pay your balance in full for each statement period, you will not pay interest.
3. Keep Credit Utilization Low
Another factor to consider is credit utilization. This is the percentage of your credit limit that you actually use. Secured cards typically have low limits, so you’ll have to watch your balance carefully to keep credit utilization down.
Credit utilization is an important component of your credit score. Try to keep your balance below 30% of your limit. Under 10% is even better!
👉 For Example
If your Capital One Secured MasterCard Credit Card has a $400 credit limit and your balance is $100, your credit utilization is 25%. That’s not bad, but it could be better.
Here’s a proven way to build credit with a credit card.
Place a single small recurring expense, like a Netflix account or your Internet bill, on your card. Set up a pull from your checking account to cover the bill and be sure the balance stays high enough to make the payment.
Put the card away and forget about it. Your card will be active, payments will be made on time, you won’t pay interest, and your credit utilization will stay low.
How To Cancel Your Capital One Secured Card?
Cancel Online: Log in to your Capital One® account. Click on “More Account Services” and then “Close Account.” They will ask you to confirm that you want to cancel your account.
Cancel By Phone: Call Capital One®at 1-800-227-4825. Enter your full card number to be connected to a representative. Tell them you want to cancel your Capital One® secured credit card.
Is There A Fee For Closing My Account?
Outside of the fees associated with your remaining balance, there is no fee for closing your account.
Your security deposit will be refunded.
I would recommend keeping the card active as long as you can. There’s no annual fee, so you won’t pay to keep it open, and keeping it open will improve the length of your credit history.
Alternatives To The Capital One Secured Card
A secured credit card through Capital One® is a solid option if you need to use a credit card while establishing or rebuilding credit.
If you’re considering one, you should still compare the card to other top picks in the secured card market. Always shop around!
No matter if you are looking to start building your credit or need to rebuild your credit, a secured credit card is one of the best tools to use on your journey.
There are a few other options for building or rebuilding your credit. Many can be used alongside a secured credit card.
Experian BOOST™ can help you build your credit record with phone and utility payments… and it’s absolutely free!.
Self online credit builder loans are straightforward to apply for and the application process is easy.
A Valuable Credit Building Tool
The Capital One® Secured MasterCard® is popular for a reason. It has an industry-leading set of features and no annual fee. If you’re looking for a secured card it will certainly be on your shortlist.
The main reason why you might not want to apply for this card is that it does require a credit check. If you have no credit or poor credit you might want to apply for a card that does not check your credit. You’ll probably pay an annual fee but you have a better chance of approval.
Preapproval for the Capital One® Secured MasterCard® requires only a soft credit check, so if you aren’t sure whether you’ll be approved or not there’s nothing to lose by going through the pre-approval process.
This is a very good secured card, but you should always shop around. Compare this card with several others and choose the one that best suits your needs!