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Building credit takes time and a lot of hard work so if you’re someone who has poor credit, you should consider the Capital One® Secured Mastercard®.
It’s one of the best beginner cards from Capital One since it requires a low credit rating and the income requirements aren’t that high. There are no annual fees and other credit card charges except for late payment penalty fees.
Not to mention, the Capital One Secured card’s benefits include an extended warranty, secondary car rental insurance, and travel accident insurance. What also sets it apart from other secured cards is that it offers a credit limit that’s higher than your initial security deposit.
The Capital One Secured Mastercard At A Glimpse
The Capital One Secured Mastercard is perfect for people looking to build or rebuild their credit. Basically speaking, it really doesn’t matter if you have a credit score below 600 or have multiple credit card rejections in the past because there’s an 80%-90% chance that you’re going to get approved for it.
If you’re contemplating on getting this card, here are some basic things that you need to know:
- Low Security Deposit Required – The card’s security deposit requirements is between $49 to $200, and it’s actually pretty low compared to other secured credit cards that requires at least $300 of security deposit.
- High Line Of Credit – The card is known for having a high line of credit and there’s a chance that your credit line can be increased within 6 without the need for an additional security deposit (provided that you pay your bills on time).
- Zero Annual Fees – A great starter credit card shouldn’t have annual fees and yes, the Capital One Secured doesn’t have one.
- Credit Bureau Reporting – The Capital One Secured is a legit credit card that reports to all three credit bureaus ( Equifax, Experian, and Transunion) so it helps in building your credit when you use it the right way.
- No Rewards – Unfortunately, the Captial One Secured Mastercard isn’t a premium card like the Amex Gold or Chase Sapphire Reserve. Its main purpose is to provide funds for borrowers who want to build or rebuild their credit so they can be approved for more credit cards in the future.
Read More: How To Increase My Credit Score To 800
Capital One Secured Benefits & Perks
The Capital One Secured Mastercard is not a cashback or miles card so don’t expect too much from it. However, it’s a solid credit choice for starters because it covers all the basic features that you would need in a credit card.
It’s accepted in thousands of locations all over the world so you can use it when you’re traveling domestically or even abroad. Even if you just make a minimum security deposit, you can get a $200 initial credit limit.
Here are more of the card’s benefits:
- Get Platinum Mastercard Benefits – All eligible Capital One Secured Mastercard holders will also be entitled to the Platinum Mastercard’s benefits such as travel and emergency assistance, card emergency services, and price protection.
- Personalized Payment Terms – Cardholders will have the option of picking a specific monthly due date and payment method which makes paying balances a whole lot easier.
- Fraud Coverage – Get zero fraud liability coverage plan if ever your credit card gets lost or stolen.
- 24/7 Customer Service – Cardholders will have 24/7 access to Capital One’s customer service centers whether it’s via phone, mobile, or website.
- Extended Warranty – Purchase eligible items using your credit card and get an extended warranty if ever your products are defective.
Pros & Cons Explained
- Credit limit can be higher than your security deposit
- Pay your security deposit in installments
- Zero foreign and annual fees
- No bonus rewards or rewards program
- Bank account needed when getting the card
- Credit Limit Can Be Higher Than Your Security Deposit – Most credit cards usually give cardholders a credit limit that’s only equal to the amount of their security deposit. For example, you can put a $49 security deposit and can still be approved for $200.
- Installment Security Deposits – You can pay for the card’s security deposit in installments and each payment must be at least $20 per transaction. Also, you need to reach the deposit amount within 35 days of getting approved.
- No Annual or Foreign Transaction Fees – You won’t pay any annual fees which is a huge benefit since annual fees can range between $95-$500. Also, there is no foreign fee so you can shop till you drop whenever you’re out of the country since foreign fees are usually at 3%.
- Bank Account Required – You need to have a bank account whenever you want to make monthly payments or pay bills. It’s pretty inconvenient for people who don’t have one yet such as those who just moved to the U.S.
- No Early Spend Bonus or Rewards Program – The card isn’t a cashback or miles credit card and its main purposes are to give cardholders credit and help them build their credit score. There are other secured cards that are pretty similar to the Capital One Secured but has a rewards program.
Capital One Secured VS Discover It Secured
We’ve tried comparing the Capital One Secured Mastercard against the Discover It Secured card based on a few categories, and here are the results.
- Benefits – The Capital One Secured gives cardholders fraud protection, personalized payment plans, buyer protection, and travel assistance. Meanwhile the Discover It Secured allows cardholders to view their FICO Score for free so they can keep track of their credit.
- Rewards – The Capital One Secured Card does not have a cashback or rewards system. Meanwhile, the Discover It Secured gives cardholders a 2% cashback on restaurants and gas stations, and 1% on everything else.
- Welcome Offer – The Capital One Secured Mastercard doesn’t have a welcome offer. Meanwhile, the Discover It Secured card will match all of the cash back you’ve earned at the end of your calendar year. Let’s say you’ve earned $100, at the end of the year, Discover will give you an additional $100 which totals your cashback to $200.
Capital One Secured VS SDFCU Savings Secured Visa Platinum Card
Another secured credit card that’s very comparable to the Capital One Secured is the SDFCU Savings Secured Visa. Here are a few examples of their differences.
- Annual Fees – Both the Capital One Secured and the SDFU Savings Secured Visa Platinum do not have annual fees.
- Rewards – The Capital One Secured has no rewards program while the SDFCU has a Flexpoints rewards program that earns one point per dollar.
- Welcome Offer – Both cards do not have a welcome offer so it’s really a tough choice for this category on which one’s better.
If you’re just looking to build credit or rebuild your credit, then the Capital One Secured Mastercard is a solid option. No annual fees, no foreign fees, and high credit limits are decent perks that will get the job done without paying for extra fees.
Whatever secured card you get, always remember to use it properly so you can get higher credit scores and eventually sign up for much better cards in the future.
If you’re still undecided about which card to get, we’re offering a travel hacking concierge where you can access tons of travel hacking resources from the Points Panda and of course, get one-on-one consultations with us.