The Capital One® Secured Mastercard® is a credit card for those looking to rebuild their credit. A refundable security deposit of $49, $99 or $200 enables cardholders to approve for their card, which will be regularly reported to the three major credit bureaus. Full, on-time payments can help cardholders increase their line of credit and improve their credit score.
This card comes with $0 annual fee and cardholders get the same Capital One benefits that unsecured credit cardholders do, like security features, mobile banking, a virtual assistant, balance transfer options and free credit report change alerts. After you’re approved and you make your security deposit, you’ll receive your card in as few as two weeks to start making purchases and building your credit.
|Card||Ongoing Purchase APR||Annual Fee||Intro Bonus||Credit Needed||Key features|
|Capital One® Secured Mastercard®||26.74% (Variable) APR||$0||None||Limited, Bad||Credit-building|
What we like about it
For people who can’t get approved for cards requiring higher credit scores, the Capital One® Secured Mastercard® provides an entry to building up credit, as long as payments are made on time. The required refundable security deposit means you’re likely to be approved. No interest is applied to the security deposit. As long as you’ve paid off your entire balance, you’ll receive it back once you close your account.
Even though this is a secured credit card, you still get similar benefits to Capital One unsecured credit cards. You can choose a personalized monthly due date and payment method, including online, by check or at a local branch. Better yet, just sign up for the Autopay feature so your payments are automatically deducted from your savings account. You can get personalized mobile or email reminders that help you stay on top of your account so you can make on-time payments.
Have an issue? Capital One cardholders get 24/7 customer service. Security features include notifications of potentially suspicious transactions, $0 fraud liability and the ability to pay with virtual card numbers online. If your card does happen to get lost or stolen, you can lock your card in the mobile app. If you’re still wondering if the thief caused any damage, you can check credit report changes for free with the CreditWise feature.
The Capital One® Secured Mastercard® also features travel benefits. There are no foreign transaction fees, and you can get travel accident insurance through the card and 24-hour travel assistance services. You can also get collision and theft damage coverage on eligible rental vehicles.
Things to Consider
It’s to be expected with a secured credit card, but the initial credit limit of $200 for a $49 security deposit for the Capital One® Secured Mastercard® is pretty low. Some cardholders who have reviewed the card mentioned increasing the limit is slow to non-existent.
Cardholders who are late with payments will have to pay a fee of up to $39 for each late payment.
This card comes with no rewards program, as well. For some, simply being able to rebuild credit is rewarding in itself, but those who want a rewards program with a secured credit card have at least one option, the Discover it® Secured card.
Capital One® Secured Mastercard® credit-building details
To qualify for Capital One® Secured Mastercard®, cardholders must make the minimum required security deposit of $49 to get an initial credit line of $200. Depositing a higher amount of $99 or $200 will give cardholders access to a higher credit line.
Cardholders will also get access to a higher credit line after making the first five monthly payments on time. For cardholders using this card who want to get the highest credit line possible, it’s best to make a $200 deposit and make all of the first five monthly payments on time.
Cardholders can avoid fees and the high APR by making all payments on time, in full. During the credit-building process, it’s best to only use the credit card for purchases that can be paid on time. That will require discretionary spending and budgeting, but a result of a higher credit score and line of credit may be worth it.
Capital One® Secured Mastercard® fees
Late payments require a fee of up to $39. For a cash advance, the fee is $10 or 3% of the amount of the cash advance, whichever is greater. These fees are fairly standard, especially for unsecured credit cards.
A benefit with the Capital One® Secured Mastercard® is that there are no annual fees, no foreign transaction fees and no transfer fees. As long as cardholders use the card responsibly, they can avoid late payment fees as they build their credit.
How does it compare to other credit-building cards?
If you want to build credit with a secured credit card, you have additional options. The Discover it® Secured credit card also requires a refundable security deposit that affects how high your credit line is. A $200 deposit gives cardholders access to a $200 credit line, while a $500 deposit gives cardholders access to a $500 credit line. There’s no annual fee, with a 24.49% Variable purchase APR.
The Discover it® Secured credit card enables cardholders to earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases. If you’re able to afford a higher minimum deposit, you can get a lower APR and better rewards with this card compared to the Capital One® Secured Mastercard®.
Another secured credit card option is the Green Dot primor® Visa® Gold Secured Credit Card. The card requires a minimum refundable security deposit of $200, but with a deposit of $5,000, you may be able to increase the credit limit to $5,000. The card has an annual fee of $49 with 9.99% Fixed APR for purchases and a 18.99% Fixed APR for cash advances.
The Green Dot Platinum Visa Credit Card has no rewards program, but it may be the choice for those who want a higher line of credit and a lower APR.
The bottom line
For those with the goal of building credit, the Capital One® Secured Mastercard® is a straightforward option. It has one of the lowest minimum refundable security deposit requirements available. But with a high APR and no rewards program, it takes a little patience to work your way up to a more lucrative option.
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