The Capital One Secured Mastercard Credit Card is an amazing option for people that don’t have excellent credit and don’t want to contribute to a large security deposit. In fact, applicants may be eligible to receive a credit limit larger than their security deposit.
When applying for a credit card, one of the most significant obstacles is compiling the cash necessary to pay a security deposit. If you’re trying to build your credit and receive access to instant cash flow, a high security deposit can certainly deter you from this goal.
The Capital One Secured Mastercard Credit Card is designed to lighten this load. Cardholders can take advantage of a $0 annual fee, in addition to helpful perks that will allow them to gradually improve their credit score.
In this Capital One Secured Mastercard Credit Card review, you’ll find out why this option is ideal for people looking to build their credit and decide if applying is the best option for you.
Capital One Secured Mastercard Credit Card Review: Quick Facts
Here is some basic, bottom-line information about the Capital One Secured Mastercard Credit Card:
There isn’t an annual fee.
This credit card allows for quick reporting to all three major credit bureaus, unlike prepaid cards.
This credit card is also accepted at millions of worldwide locations.
Capital One Secured Mastercard Credit Card: Specifications
To help you learn more about this credit card option, here are some basic specifications to review:
Annual Fee: $0
Card Category: Secured credit card
Interest Rate: 26.99% ongoing APR variable
Deposit Terms: For applicants that qualify, they can receive a $200 line of credit with a $50, $100, or $200 initial deposit. If you add more money before your account official opens, you can receive a credit limit up to $1,000.
Foreign Transaction Fees: $0
Benefits of Applying for the Capital One Secured Mastercard Credit Card
The Capital One Secured Mastercard Credit Card is just like any other secured credit card. Eligible applicants are required to make a one-time, refundable security deposit. In many cases, your credit limit will equal your security deposit.
This credit card, on the other hand, offers a flexible security deposit for those that qualify. You can choose to deposit either $50, $100, or $200. You can even increase your credit limit up to $1000 when you make a higher security deposit.
Applicants on a fixed income can rest easy knowing that Capital One will allow them to pay their security deposit in installments of at least $20. The only condition is that the security deposit will have to be paid in full within 35 days of being approved.
Higher Credit Limit:
If you make your monthly credit card payments on time, you can increase your credit limit in as little as six months without having to make another security deposit. The benefits of having a higher credit limit is clear.
You enjoy more financial freedom while reducing your credit utilization rate, which is a vital factor in improving your credit score. The lower your credit utilization score, the better your credit score will be.
For example, if you have a balance of $60 and a $200 credit limit, your credit utilization rate will be at approximately 30%. This is the highest you will need this rate to go. If your credit score increases to about $500, this rate decreases to 12%, which is ideal for building credit.
Credit cards focused for people with bad credit are known for having high fees. For this reason, applying for a secured credit card is a great option for building credit without breaking the bank.
By applying for this credit card, you can always be reimbursed your security deposit when you close the account without any disputes or upgrade to a newer unsecured card.
The Capital One Secured Mastercard Credit Card offers $0 annual and foreign transaction fees. There is the matter of paying a $39 late fee if you miss a payment, but this can be easily avoided.
Potential to Upgrade:
Capital One has a strong reputation for providing credit cards to people across a wide variety of credit scores. As you make on-time payments and establish excellent payment history, you can become eligible to upgrade to a new card.
Drawbacks of Applying for the Capital One Secured Mastercard Credit Card
Not every secured credit card is perfect. If you want to consider the consequences of applying for this credit card, here are some noticeable drawbacks:
Many secured cards charge a high interest rate, and the Capital One Secured Mastercard Credit Card is no exception. There is an ongoing variable APR of 26.99%. If you pay your balance on time, there’s nothing to worry about.
Otherwise, you may want to consider other credit card options with an 0% introductory APR period.
The Capital One Secured Mastercard Credit Card, also like many secured credit cards, doesn’t offer any rewards. There are actually very few credit cards that provide this benefit.
Credit Check and Bank Account is Required:
In order to qualify for this credit card, you must undergo a credit check and have an open bank account, whether it’s a checking or savings account. Capital One may even seek to check your employment history.
This is a significant drawback to applicants with a challenged employment history that don’t have credit or a bank account.
Capital One Secured Mastercard Credit Card Review: The Final Verdict
If you want to gradually improve your credit score, the Capital One Secured Mastercard Credit Card is certainly an ideal option. This card offers low fees, optional security deposit amounts, and the potential to upgrade one day.
If you establish a great credit history with this credit card, you can move on to another credit card with low interest and fees and greater rewards without having to pay a security deposit at all.
Credit Shout is a community of personal finance experts dedicated to helping you save money and make smart financial decisions. Learn how to master your credit card rewards, improve your credit score and start eliminating your debt.