Looking for a credit card that caters to people with bad credit but doesn’t require a huge security deposit?
The Capital One secured credit card is one of the best available when you’re working on rebuilding your credit.
Plus, it’s a MasterCard, so you can use it just as you would any other major credit card.
Let’s take a look at the details to find out if this card really is good to have in your wallet.
Capital One Secured Credit Card Account Basics
The card starts off with a credit limit of $200. Depending on your credit history, you’ll need to pay a security deposit of either $49, $99, or $200.
This is relatively low for a secured credit card, especially since your credit limit could potentially be higher than your deposit amount.
Once you successfully use your card for five months with all of your monthly payments made on time, you can have your credit limit increased without having to deposit more money.
Over time, your limit could go as high as $1,000.
Another perk is Credit Score Tracker, a Capital One feature that you’ll have access to as a secured credit cardholder.
You use it as a simulation to find out what would happen to your credit score if you make certain financial decisions.
If you’re thinking about taking out a car loan, for example, you could see how that extra debt would impact your score.
This is definitely a useful tool to have in your belt if you’re working on rebuilding your credit history.
There’s no annual or monthly fee with this card, which really makes it stand out vs other secured credit cards.
You can, however, expect a 24.99% APR.
This certainly isn’t the highest you can pay, particularly for a secured credit card, but it’s well above the APR of an average credit card or personal loan interest rates.
Capital One also charges late fees if you miss a payment, so keep track of your due date in order to avoid these extra payments.
For cardholders who frequently travel abroad, this card can actually provide quite a bit of savings because it doesn’t charge any foreign transaction fees.
Don’t expect any rewards with this card from Capital One. Also, know that you can’t go above the $1,000 credit limit once you reach that threshold.
When that happens, you’ll probably want to explore other options for unsecured credit cards.
By that time, you’ll hopefully have built your credit score enough that you can get approved for a card with better rates and terms.
Getting a Capital One secured credit card can put you on the right path to building a positive credit history.
With a low-security deposit and minimal fees, it’s certainly a competitive card in its category.
Plus, it’s a card you can grow with a positive payment history is continuously rewarded with an increased credit line.
If you’re responsible with credit cards, it could make you look more favorable to personal loan companies in the event you need a loan.