Capital One® Secured Mastercard® Review: A Great Secured Card to Rebuild Credit
Capital One® Secured Mastercard®
The Capital One® Secured Mastercard® is a great credit card if you want to rebuild your credit score. Depending on your credit, the card will require as little as a $49 security deposit. At worst, the required deposit will be $200, which is still among the lowest deposits required by secured card issuers. Add the fact that the card has no annual fee, and you’ll be hard-pressed to find a better secured credit card.
Capital One® Secured Mastercard® Credit Card Quick Review
Here are the highlights of the Capital One® Secured Mastercard® Credit Card:
- Security deposit as low as $49
- No annual fee
- View your credit score with Capital One Credit Wise
- Choose your own payment date
- Automatic credit limit increase after five on-time payments
If your balance is less than $25, then the minimum payment is your full balance. Otherwise, the payment will be the greater of:
- 1% of your balance plus interest charges and late fees
Plus all past-due amounts.
- Up to $39 for late payments
- The greater of $10 or 3% for cash advances
Why Apply for the Capital One® Secured Mastercard® Credit Card
If you’re applying for a secured credit card, the Capital One® Secured Mastercard® has a lot to offer.
You want to improve and track your credit score
If you want a secured credit card to build or rebuild your credit score, the Capital One® Secured Mastercard® is a solid choice. You can qualify for this card with poor credit and Capital One will report your card use to all three credit bureaus, which is essential for building credit. (If a card does not report to the credit bureaus, using it will likely not improve your credit.)
Capital One also makes it easy to monitor your credit score with Credit Wise. This free service gives you regular credit score updates and lets you see how different actions might impact your score.
You want a secured card without an annual fee
Secured credit cards often charge hefty fees, as the people applying for secured cards usually don’t have good credit scores and can’t get other credit cards. Card issuers know that, and thus take advantage with big fees.
The Capital One® Secured Mastercard® Credit Card doesn’t charge an application fee or annual fee. This allows cardholders to rebuild their credit without having to pay anything extra, so long as you pay off your statement each month.
Capital One® Secured Mastercard® Credit Card: Drawbacks and Downsides
The Capital One® Secured Mastercard® Credit Card does have a few drawbacks to keep in mind.
High interest rate
In a perfect world, you pay off your credit card in full each month. You’re rewarded with an improved credit score and not having to shell out for interest payments.
But we don’t live in a perfect world, and sometimes have to carry a balance. The Capital One® Secured Mastercard® Credit Card charges a high rate of interest rate of 26.99% (Variable), making even a small balance expensive.
Some secured cards, like the Green Dot primor® Visa® Gold Secured Credit Card charge a lower rate, which saves you money if you carry a balance. The tradeoff with this card, though, is it has an annual fee. If you plan on carrying a balance, a card like the Green Dot primor® Visa® Gold Secured Credit Card is likely a better choice.
No automated path to an unsecured card
Your goal with a secured card should be to improve your credit score to where you qualify for an unsecured credit card.
In light of that, some secured card issuers will review your account periodically and, if you qualify, offer to upgrade your account automatically.
The Capital One® Secured Mastercard® Credit Card doesn’t offer automatic upgrades. When your score improves, you’ll have to apply for a different card to move to an unsecured account.
Capital One® Secured Mastercard® Credit Card Alternatives
If you’re in the market for a secured credit card, you should also consider these alternatives.
Citi® Secured Mastercard®
If you want a secured credit card that will automatically upgrade to an unsecured card when you qualify, check out the Citi® Secured Mastercard®.
The card has many of the same benefits as the Capital One card, charging no annual fee and reporting your activity to all three credit bureaus.
Citi will review your account after 18 months and, if your credit has improved and the account is in good standing, the bank card will automatically upgrade you to an unsecured card.
Discover it® Secured Card
If you want a secured credit card with cash back rewards, consider the Discover it® Secured Card.
Few secured credit cards offer any kind of cash back rewards, but the Discover it® Secured Card earns 2% on gas and dining, and 1% back on all other purchases.
Depending on how often you use the card, that can translate to hundreds of dollars per year in rewards, while still improving your credit score.
Other Things to Know
Here are a few frequently asked questions about the Capital One® Secured Mastercard®.
What is the credit limit on the Capital One® Secured Mastercard®?
The starting credit limit for the Capital One® Secured Mastercard® is $200. You can add to your security deposit for a credit limit as high as $3,000.
Does Capital One pull your credit for a credit limit increase?
No, Capital One will not make a hard pull on your credit, which decreases your credit score, when considering your card for a credit limit increase.
Bottom Line: Should You Apply for the Capital One® Secured Mastercard® Credit Card?
The Capital One® Secured Mastercard® is a great choice for people rebuilding their credit. The low security deposit and lack of annual fee should more than offset the card’s high interest rate, so long as you pay your bill off regularly.
While the Capital One® Secured Mastercard® won’t automatically upgrade to an unsecured card, Capital One is a good bank to establish a relationship with for when your credit has improved.