The Capital One® Platinum Credit Card is a great credit-building choice with valuable perks that reward you for practicing responsible financial behavior.
|Card||Ongoing Purchase APR||Annual Fee||Intro Bonus||Credit Needed||Key features|
|Capital One® Platinum Credit Card||26.99% (Variable) APR||$0||None||Fair to Good||Credit-building|
What we like about it
If you don’t want to go the secured credit card route but you still want to build your credit, the Capital One® Platinum Credit Card is a no-fuss way to accomplish that financial goal. This card boasts $0 in annual fees, no security deposit and eventual access to a higher amount of credit after an account review and five initial on-time payments. Besides the simple terms, the Capital One® Platinum Credit Card also touts benefits to support users trying to create a healthier financial future with perks like account alerts, autopay and easy access to your monthly recurring transactions for subscriptions and bills. These extras help card users stay vigilant and improve the chances of on-time payments.
In addition, $0 Fraud Liability protects you if the card is lost or stolen, which means you’re never on the hook for unauthorized charges. The included CreditWise app provides unlimited access to a user’s credit score, an important bellwether of creditworthiness. If you want to improve, rebuild or establish credit, this feature empowers you to take a hands-on approach to your credit card experience. CreditWise makes it easy to monitor your credit profile and immediately spot any issues or maybe even celebrate improvement.
You can imagine the Capital One® Platinum Credit Card as a kind of financial stepping stone to apply for another credit card in the future with lower rates, robust rewards or other perks that come with better credit health, which lenders use to evaluate credit card and loan applicants.
Things to consider
The main drawbacks of the Capital One® Platinum Credit Card are the lack of rewards and the low credit limit. If you’re looking to use this card as your main credit card, you’re not really going to get much out of it besides establishing a consistent credit history. For some credit card users who are just starting their credit history, this might be just fine. But if you’re a seasoned credit card holder, it might benefit you to look into options with rewards like cash back or travel points.
The other potential issue is the low credit limit. Again, if you’re just using this card as part of your strategy to build your credit, it may not be a big deal. This is especially true if you make the first five payments on time and successfully increase your credit limit.
Another drawback is the high-interest rate. This isn’t a great card to carry a high balance on or max out the limit, so if you choose this credit card, make sure you’re paying the balance in full each month. Otherwise, you risk creating a disastrous financial situation for yourself and watching your credit score dip.
Capital One® Platinum Credit Card credit-building details
After five months of on-time payments, your credit limit may increase after an official account review. If you don’t max out your new higher credit limit, your credit utilization ratio will be lower, an important factor that goes into your credit score. Just so we’re on the same page here, your credit utilization is defined as the amount of credit you’re actually using compared to the total available credit available. The lower your utilization, the higher the likelihood of a credit score bump.
Capital One® Platinum Credit Card fees
Planning international travel generally means planning out what cards to use since some carry high foreign transaction fees when you swipe them aboard. The Capital One® Platinum Credit Card, however, has no foreign transaction fee, so you can make international purchases without an extra surprise cost tacked on. If you choose to get a cash advance, you’ll be charged $10 or 3% on the advance, whichever is more. Late payments will set you back up to $39. But there’s no penalty APR and no returned payment fee. Of course, it’s good practice to avoid making late payments even if there is no penalty. Practicing good financial habits over time can boost your credit score.
How does it compare to other credit-building cards?
The Citi® Secured Mastercard® is a smart credit-building choice with a slightly lower APR. The main difference here is that cardholders must put down a security deposit that acts as the credit limit, between $200 and $2,500. It’s held in a Collateral Holding Account, where it will not earn interest for a term of up to 18 months. However, there is no annual fee, and if you need to establish or rebuild your credit, this card can help you reach that goal.
The Discover it® Secured card is another secured option if you want to build credit for the first time or rebuild it while earning cash-back rewards. The drawback is that applicants must provide a security deposit in order to get approved for this card.
Both of these competitors provide new credit card owners and those trying to rebuild a chance to improve their credit in a low-risk manner. But both require a security deposit, and if you default on your account, those lenders can apply your deposit to your remaining balance and close your account.
If you don’t want to put down a security deposit, the Capital One® Platinum Credit Card is a prudent choice since it offers a lower credit limit with the chance of a higher credit limit later. It’s a no-frills way to pick up the pieces if you’ve made a few hiccups here and there during your financial life.
The bottom line
The Capital One® Platinum Credit Card provides beginners — and those who’ve had a couple of credit missteps — with a way to build up a better credit score. While you may start out with a lower credit limit, on-time payments can unlock access to a higher line of credit. This is an excellent choice for credit card users who don’t want to deal with the hassles of secured credit cards and don’t want or need rewards.
Please Note: Information about the Discover it® Secured and Capital One® Platinum Credit Card have been collected independently by TheSimpleDollar.com. The issuer did not provide the details, nor is it responsible for their accuracy.
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