Capital One® Secured Mastercard®: The Best Option for Repairing Your Credit
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If you are just starting out and attempting to build your credit profile, or if you have had credit problems in the past, you may be on the look-out for a suitable secured credit card. Secured cards are great for building and repairing your credit history. However, determining which secured card to get from the many that are available can be complicated.
The Capital One® Secured Mastercard® stands out as one of the few secured cards with low fees and the opportunity to qualify for credit limit increases without adding more funds to your security deposit. Both are important elements to consider when choosing the secured card that's best for you.
Why We Like This Card
- No annual fee and no foreign transaction fee
- Credit increases without additional deposit
How the Card Works
When you apply and are approved for the card, you have 35 days to make your complete security deposit of $49, $99, or $200, which is based on your creditworthiness. When your deposit has been paid in full, you receive your card with an initial credit line of $200. You can increase your credit line by depositing more than the required minimum within 35 days of account opening and before activating your card. Don't want to make additional deposits? You can also earn a credit line increase after making your first 5 monthly payments on time with no additional deposit required. Your account activity and payments are reported to the three major credit bureaus — TransUnion, Equifax, and Experian — which can help you establish a positive credit rating.
Other Benefits
Platinum Mastercard benefits. As a cardholder, you receive Platinum Mastercard benefits which include auto rental insurance for protection against collision damage or theft, travel accident insurance when you use your card to purchase your fare, 24/7 travel assistance services, 24/7 roadside assistance, and price protection which reimburses you for the difference if a purchase you have made with the card is found at a lower price within 60 days.
Pros
Low fees. The Capital One secured card is one of the only secured cards that does not charge an annual fee or foreign transaction fee. Further, there are no extra fees for things such as credit limit increases and account inquiries that are often associated with secured credit cards. (See also: Secured Credit Cards with Low or No Foreign Transaction Fees)
Credit increases without deposits. When you apply for the card, you will be notified of the amount of deposit that is required and there is a possibility that you won't have to deposit the full amount of your credit line. You may also qualify later for credit limit increases that don't require additional deposits, which isn't offered with many other secured cards. Often times, in order to increase your credit line on a secured card, you must make an additional payment to your deposit in the amount of the increase you are requesting.
Card benefits. There are very few perks that are offered with secured credit cards, but at least with the Capital One secured card, you receive the same valuable card benefits that you would receive with an unsecured card.
Cons
High APR. The APR is among the highest APRs offered with any secured card. If you are dedicated to paying your balance in full each month, you won't pay interest on your purchases and the high APR won't matter. However, if you frequently carry a balance, you are better off with a card that carries a lower interest rate. (See also: Secured Credit Cards with Low APRs).
No interest earning on security deposit. Your security deposit is held in the event you default on your credit card balance and does not accrue interest while it is being held. Some secured cards hold the security deposit in savings accounts or CDs so you can earn extra money while building your credit. (See also: Secured Cards that Pay Interest on Deposits)
Who This Card Is Best For
The Capital One Secured Mastercard is best for those who are building credit or re-establishing credit and appreciate card benefits and tools for managing credit. As one of the only secured cards available that does not charge a foreign transaction fee, it is especially ideal for those who travel abroad or need the card to make foreign purchases. If, however, you plan on carrying a balance rather than paying in full each month, you should instead consider one of the secured options that offer a lower APR.
Tagged: Credit Cards, building credit, Capital One, credit card reviews, rebuild credit, repair credit, secured cards
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