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Capital One® Secured Mastercard Review

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Capital One Secured MasterCard Review

Have you been denied for a credit card due to having little or bad credit? If so, the Capital One® Secured Mastercard® could help you get back on the right track. You don’t need a perfect credit score, but you do need to be capable of making payments.

What’s a Secured Credit Card, and How Is It Different from Other Options?

You might be wondering what makes a secured credit card different from a regular credit card or a prepaid card. If you’re familiar with secured loans, secured credit cards work in a similar way: they require collateral. The Capital One® Secured Mastercard® requires that you provide collateral in the form of a cash deposit. This collateral allows creditors to lend to borrowers who don’t have the best credit.

Secured cards are mainly for those who need to rebuild their credit. If you’ve previously been in a lot of credit card debt because of irresponsible usage, or need help establishing credit in the first place, secured cards are a great option.

How does this differ from a prepaid card? Prepaid cards aren’t useful for building credit because the usage isn’t reported to the three major credit bureaus. Prepaid cards function more like a debit card because you’re putting money you already have toward them. No lending is involved.

Details of the Capital One® Secured Mastercard®

If you’re looking to rebuild your credit, the Capital One® Secured Mastercard® is a good choice.

The required security deposit is $49, $99, or $200 (refundable) and must be paid in full within 80 days of your account being approved (you can pay it over time within those 80 days). The amount you need to deposit is based on your creditworthiness, but this is a fairly low deposit compared to other options.

You can’t use the deposit toward minimum monthly payments as it’s used as collateral against your account, and you won’t earn any interest on your deposit while Capital One holds onto it.

Note that the deposit is refundable only if you pay off your balance in full and close the account. You can’t convert the secured card to an unsecured credit card, but once you improve your credit you can apply for an unsecured card and then close the secured one.

The credit line ranges from $200 to $3,000, depending on how much you put down for a your security deposit. If you want to increase your credit line, you just need to make an additional deposit.

However, the APR on this secured card is a whopping 26.49% (Variable) – you definitely don’t want to carry a balance on this card. A lower credit line may actually help you here, as you won’t be able to charge an enormous amount to the card.

You can also request a balance transfer, but you have to wait 10 days after your account has been opened to do so.

Since the Capital One® Secured Mastercard® is a Mastercard, it comes with all the regular features and benefits of a Platinum MasterCard:

  • 24/7 travel and roadside assistance
  • Reimbursement of the difference in price if you find a lower price for an item you purchased within 60 days
  • Extended warranty protection
  • Travel accident insurance and auto rental insurance
  • Fraud coverage
  • You can pick your due date
  • 24/7 access to customer service

Lastly, and most importantly, your card usage is reported to all three major credit bureaus.

Capital One CreditWise®

The nice bonus with this card is you’ll have 100% free access to your credit score. Monitoring your score while working to increase it is very useful.

CreditWise® also has a simulator feature. If you’re thinking about taking a certain action with your card (like making a big purchase), you’ll be able to see how your credit score will be affected.

You’ll also receive free alerts whenever your TransUnion credit report changes.

If you’re unsure of how your credit score works, or what makes for a good credit score, CreditWise® will help. It grades your score and will give you tips on how to improve.

Using CreditWise® won’t impact your credit score, either.

Who’s Eligible to Apply?

According to the disclosure on Capital One’s website, you’re eligible to apply if:

  • You’re located within the United States
  • You have a monthly income that’s enough to cover your expenses and debt for which you’re currently responsible
  • You’re at least 18 years old and have a valid Social Security number
  • You have a checking or savings account (doesn’t need to be with Capital One)
  • You haven’t applied for a Capital One credit card more than 3 times within the past 45 days
  • You have two or more open credit card accounts with Capital One (not required, but can make you eligible)
  • You have a Capital One account currently not in good standing (overdue balance, has been charged off, etc.) (not required, but can make you eligible)
  • You don’t have a bankruptcy that’s still unresolved

The Application Process

As with most credit cards, the application process is simple and quick. You can apply online, and you only need to fill out your personal information. You’ll be asked for your physical address (it can’t be a P.O. Box), income, rent/mortgage amount, and employment status.

Remember that a hard inquiry against your credit will result from applying for a credit card, even a secured one.

The Fine Print

There is a $0 annual fee for this card, and late fees are up to $38. Cash advance fees are 3% of the amount of the cash advance, but not less than $10. That being said, there used to be a $29 annual fee associated with this card, so if you applied before the change in policy, you would have been charged a fee.

Capital One assures customers “there are no additional penalty fees associated with this card,” and there’s no foreign transaction fee or balance transfer fee to worry about.

It also mentions that a late payment won’t increase your APR, but the APR varies with the market, so it can fluctuate.

Finally, it states, “if your account is 180 days past due, part of a bankruptcy proceeding, or otherwise charges off, the entire balance is due immediately.”

It’s a good idea to read all of Capital One’s disclosure to educate yourself on how the card works.

Capital One® Secured Mastercard®

APPLY NOW Secured

on Capital One's website

Alternative Secured Cards

Not thrilled with what Capital One has to offer? There are other choices when it comes to applying for a secured card.

You can always check with your local credit union or community bank to see if it offers any secured cards. Many of our highly rated secured cards are products of these institutions.

The Savings Secured Visa Platinum Card from State Department Federal. This simple and transparent card offers low APR (14.24% Variable) and $0 annual fee. There is a minimum deposit of $250. You don’t need to be a member of the State Department nor one of the organizations tied to the credit union in order to join. You can join the American Consumer Council for only $5 to be eligible.

Savings Secured Visa Platinum Card from State Department Federal

APPLY NOW Secured

on State Department Federal Credit Union’s secure website

The Visa Classic Secured Card from Justice FCU has a $110 minimum deposit, 16.90% Variable APR and $0 annual fee. Anyone can join JFCU by first becoming a member of an eligible JFCU association like the National Sheriff’s Association, charges a $38 membership fee. It only costs $5 for eligible individuals to join JFCU, so that would raise the total cost of membership to $43.

Visa Classic Secured Card from Justice FCU

APPLY NOW Secured

on Justice Federal Credit Union’s secure website

Compare Your Options

You shouldn’t plan on carrying a balance on any credit card – even a secured card. If you can avoid doing so, the high APR of the Capital One® Secured Mastercard® isn’t a concern. It’s also a great option if you can pay the $49 or $99 minimum deposit, as opposed to $200. However, it pays to run the numbers when comparing different secured cards. Each has different benefits and fees, so make sure you choose the card that’s best for your situation.

Explore our Secured Card Comparison Table Here.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at [email protected]

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The Best Options for Rebuilding Your Credit Score – October 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

The Best Options for Rebuilding Your Credit Score

A strong credit score is a vital part of your overall financial health. But rebuilding a damaged (or non-existent) credit score can feel impossible. Don’t despair. There are plenty of avenues you can take in order to rehabilitate your credit score and it all begins with identifying your starting point.

How Bad is Your Bad Credit Score?

Before you start to panic about rehabilitating your bad credit score, let’s determine if it’s even bad. Where do you fall in the range of FICO® credit scores? Below you’ll find what your credit score is considered, with ranges from Experian.

  • Above 740: Excellent Credit
  • 670 – 739: Good Credit
  • 580 – 669: Fair Credit
  • Below 579: Bad Credit or No Credit Score/Thin File

Your credit score isn’t the only thing that will keep you from being approved for credit. These factors are common reasons for being declined.

  • Your debt-to-income ratio is above 50%
  • You have no credit score
  • You have been building up a lot of debt recently
  • You are unemployed

In order to focus on rehabilitating your credit score, you’ll need to start with getting a line of credit. This may sound impossible because you’re constantly getting declined. Fortunately, there are options tailored specifically for people looking to re-establish credit.

[Read more about bad credit scores here.]

Rehabilitating a Bad Credit Score (579 and under)

Get a Secured Card

You’ll use your own money as collateral by putting down a deposit, which is often about $150 – $250. Typically, the amount of your deposit will then be your credit limit. You should make one small purchase each month and then pay it off on time and in full. Once you prove you’re responsible, you can get back your deposit and upgrade to a regular credit card.

Check out two of our favorite secured cards below, and more options for a secured credit card here.

Discover it® Secured

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

Discover it® Secured

Annual fee
$0
Minimum Deposit
$200
Regular APR
24.74% Variable

Perhaps our favorite secured card, Discover it® Secured, has numerous benefits for those looking to rebound from a bad credit score. There is a $200 minimum security deposit that will become your line of credit, which is typical of secured credit cards.  Additional perks include a rewards program (very rare for secured cards) that offers 2% cash back at restaurants or gas stations on up to $1,000 in combined purchases each quarter, automatically. Plus 1% cash back on all other credit card purchases. This card has another great feature: Discover will automatically review your account, starting at month eight, to see if your account is eligible to transition to an unsecured card. Discover will decide if you’re eligible based on a variety of credit factors, and if you are, you will receive notification and get your security deposit back.

Capital One® Secured Mastercard®

APPLY NOW Secured

on Capital One's website

Capital One® Secured Mastercard®

Annual fee
$0
Minimum Deposit
$49, $99, or $200
Regular Purchase APR
26.49% (Variable)
Credit required
bad-credit
Limited/Bad

The Capital One® Secured Mastercard® is another option for those who want to strengthen their credit score. This card offers a potentially lower minimum security deposit than other cards, starting as low as $49. Be aware the lower deposit is not guaranteed and you may be required to deposit $99 or $200. You can deposit more before your account opens and get a maximum credit limit of $1,000. There is a feature that will assist your transition from a secured to an unsecured card. Capital One automatically reviews your account for on time payments and will inform you if you’re eligible for an upgrade. However, there is no set time period when they will review your account — it depends on several credit activities. If you receive notification that you’re eligible, you will be refunded your security deposit and will receive an unsecured card.

Rebuilding from a Fair Credit Score (580 – 669)

Apply for a Store Credit Card

You might be used to checking out at a store and being asked if you’d like to open a credit card. While these credit cards come with really high interest rates and are great tools to tempt you into buying items you don’t need, there is a big perk to store credit cards: they’re more likely to approve people with low credit scores. Just be sure to only use the card to make one small purchase a month and then pay it off on time and in full. Unsubscribe to emails about deals and don’t even carry it around everyday in your wallet if you can’t resist the desire to spend. Read more here. 

Those unable to get a store credit card should apply for a secured card to build credit. With proper credit behavior, you can see your score rise and then you may qualify for a store card.

Here are our picks for two store credit cards:

The Walmart Rewards Card offers a great rewards rate. Earn 5% back on purchases made at Walmart.com and on the Walmart app, 2% back on Walmart purchases in stores outside of the introductory offer, and 2% back at Walmart Fuel Stations. The sign-up bonus has the potential to be an excellent value, too. Get 5% back for the first 12 months when you use your card with Walmart Pay for in-store purchases, upon approval. Just remember that your cashback rate on purchases in Walmart stores will go down after the intro offer ends, so after your first year with the card, make sure to do most of your shopping on Walmart.com or in the Walmart app to take advantage of the higher rate you get for shopping that way. Note that this is a store card, so you can’t use it outside the Walmart ecosystem.

The information related to Walmart Rewards Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Target REDcard™ Credit Card

The information related to Target REDcard™ Credit Card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms Apply.

Target REDcard™ Credit Card

Regular Purchase APR
25.15% Variable
Annual fee
$0
Rewards Rate
5% at Target & Target.com

The Target REDcard™ Credit Card offers great perks that are sure to please frequent Target shoppers. You receive a discount of 5% at Target & Target.com off every eligible transaction. The discount automatically comes off your purchase — no redemption needed. Other benefits include free shipping on most items, early access to sales and exclusive extras like special items, offers, and 10% off coupon as a gift on your REDcard anniversary each year.* Recently, cardholders received early access to Black Friday deals. Reminder: This card can only be used at Target and on Target.com.

Check If You Pre-Qualify

If you’re on the higher end of the spectrum, you may want to consider checking to see if you’re pre-qualified for any cards. This may help minimize your chance of rejection upon applying because pre-qualification performs a soft pull on your credit. This doesn’t harm your credit score.

Your goal in this credit range should be to use no more than 20% of your total available credit. Pay your bills on time and in full. And keep pumping that positive information onto your credit report until you reach the 700+ category. 

Who You Need to Avoid

Access to credit and loans may come easier than you expect, but that should also be a danger sign. There are several lenders who are willing to provide lines of credits or loans to people with poor credit. These options are often very predatory. If you’re simply trying to rebuild your credit history and improve your credit score, then there is no need to take these offers.

Here are the options you need to avoid when trying to rebuild credit:

1. Payday and Title Loan Lenders – There is never a need to take out a payday or title loan if you’re trying to merely rebuild or establish credit history. Most of these lenders don’t report to the bureaus and you’ll likely end up in a painful vicious cycle of borrowing and being unable to pay it down.

[How to get out of the payday loan trap.]

2. First Premier – The bank claims to want to offer people a second chance when it comes to their finances, but its fee structure and fine print prove the exact opposite. First Premier charges you a processing fee of up to $95 just to apply for a credit card. Then it levies a $75 annual fee on the credit cards and most cards only come with a $300 limit. You’re paying $170 for a $300 credit line! The APR is a painful 36%. In year two the annual fee reduces to $45, but then you’re charged a monthly servicing fee of $6.25. And to top it all off, you’ll be charged a 25% fee if your credit limit is increased. Stay away from this card! Use the $170 it would take to open the card and get a secured card instead.

3. Credit One – Credit One does an excellent job of confusing consumers into thinking they’re applying for a Capital One card. The logos are eerily similar and easily confused.

Creditone

Capital one

While Credit One is not as predatory as First Premier or payday loans, there is really no need to be using one of its cards to rebuild your credit score. For starters, all Credit One cards have annual fees that range from $0 to $75 for the first year, then $0-$99 in subsequent years. If you’re approved for a card with an annual fee, it will be deducted from your initial credit limit. For example, receiving a $300 credit limit and $75 annual fee means you’ll only have access to an initial $225 credit limit. In addition, there is a high 19.99% -25.99% Variable APR. Given the high annual fees, we recommend saving your money and using a secured card with no annual fee to begin rebuilding your credit score.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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Building Credit

Build Your Credit Score: 6 Secured Cards With No Annual Fees – October 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Secured cards are a great way to build or improve credit. When you open a secured card, you submit a security deposit that typically becomes your credit limit. This deposit acts as collateral if you default on your account, but you can get it back if you close your account after paying off your balance. As long as you use a secured card responsibly — for example, make on-time payments and use little of your available credit — you may see improvements in your credit score. Unfortunately, in addition to the upfront deposit, this credit-building tool can have extra costs, like an annual fee.

You can avoid that expense with one of these six no annual fee secured cards, which have a variety of uses:

Cards to consider

Rewards

Discover it® Secured

APPLY NOW Secured

on Discover Bank’s secure website

Rates & Fees

Discover it® Secured

Annual fee
$0
Minimum Deposit
$200
Regular APR
24.74% Variable

The Discover it® Secured is a standout secured card that provides cardholders the opportunity to earn cash back while building credit. A cashback program is hard to find with secured cards, and the Discover it® Secured offers 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases. In addition, there is a new cardmember offer where Discover will match ALL the cash back earned at the end of your first year, automatically. This is a great way to get a lot of rewards without needing to do any extra work. In addition to a cashback program, this card provides valuable credit resources such as free access to your FICO® Score and a Credit Resource Center — just note these services are available whether you’re a cardholder or not. Discover also takes the guesswork out of wondering when you’re ready for an unsecured card (aka a regular credit card) by performing automatic monthly account reviews, starting at eight months of card membership.

What to look out for: There is a high 24.74% Variable APR for this card, so you could end up paying a lot more than purchase prices if you carry a balance. Try not to overspend and make it a goal to pay each statement in full so you avoid interest charges.

Low deposit

Capital One® Secured Mastercard®

APPLY NOW Secured

on Capital One's website

Capital One® Secured Mastercard®

Annual fee
$0
Minimum Deposit
$49, $99, or $200
Regular Purchase APR
26.49% (Variable)

The Capital One® Secured Mastercard® offers qualifying cardholders a lower security deposit compared to other secured cards. You will get an initial $200 credit line after making a security deposit of $49, $99, or $200, determined based on your creditworthiness. Typical secured cards require you to deposit an amount equal to your credit limit, so this card has added perks for people who qualify for the lower deposits. You can also receive a credit limit increase without making an additional deposit after making your first five monthly payments on time. This is beneficial for people who need a higher credit limit and don’t want to (or can’t) tie up their money in a deposit. Also, you’ll have access to CreditWise® from Capital One® and Platinum Mastercard® benefits that include travel accident insurance and price protection.

What to look out for: The $49 and $99 security deposits are not guaranteed and depend on your creditworthiness — that means you may still have to deposit $200. Also, it’s not a good idea to carry a balance on this card because it has one of the highest APRs at 26.49% (variable).

Average deposit

Citi® Secured MasterCard®

The information related to Citi® Secured MasterCard® has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication. Terms Apply.

Citi® Secured MasterCard®

Annual fee
$0
Minimum Deposit
$200
Regular Purchase APR
24.24%* (Variable)

The Citi® Secured Mastercard® requires a $200 security deposit, which is typical of secured cards and a good amount to establish your credit line. You can deposit more money if you want to receive a higher credit line, but if you don’t have a lot of money available to deposit, coming up with $200 is manageable. This card doesn’t have any additional card benefits like rewards or insurances, but you can access Citi’s Credit Knowledge Center for financial management tips.

Low APR

Visa® Secured Card from MidSouth Community FCU

APPLY NOW Secured

on MidSouth Community FCU’s secure website

Visa® Secured Card from MidSouth Community FCU

Annual fee
$0
Minimum Deposit
$200
Regular Purchase APR
11.15% Variable

Because MidSouth Community is a federal credit union, you need to be a member to qualify for this card. Membership is limited to people who work, live, worship, or attend school in the following Middle Georgia counties: Bibb, Baldwin, Crawford, Hancock, Houston, Jones, Monroe, Peach, Pulaski, Putnam, Twiggs, Washington, and Wilkinson. If you qualify, you may be able to get a secured card with an APR as low as 11.15% variable.

What to look out for: This card is very restricted, therefore few people will be able to qualify for this low APR secured card.

Unrestricted low APR

Affinity Secured Visa® Credit Card

APPLY NOW Secured

on Affinity Federal Credit Union’s secure website

Affinity Secured Visa® Credit Card

Annual fee
$0
Minimum Deposit
$250
Regular Purchase APR
12.85% Variable

The Affinity Secured Visa® Credit Card requires cardholders to join the Affinity FCU. You may qualify through participating organizations, but if you don’t, anyone can join the New Jersey Coalition for Financial Education by making a $5 donation when you fill out your online application. This card has a 12.85% variable APR, which is one of the lowest rates available for a no annual fee secured card and is nearly half the amount major issuers charge. This is a good rate if you may carry a balance — but try to pay each statement in full.

What to look out for: There may be a membership fee associated with this card if you don’t qualify through participating organizations. The fee you may have to pay is low at $5, but it may be an issue for people who don’t want to pay anything to open a secured card.

Unrestricted federal credit union

Savings Secured Visa Platinum Card from State Department Federal

APPLY NOW Secured

on State Department Federal Credit Union’s secure website

Savings Secured Visa Platinum Card from State Department Federal

Annual fee
$0
Minimum Deposit
$250
Regular Purchase APR
14.24% Variable

The Savings Secured Visa Platinum Card from State Department Federal is open to anyone, regardless of residence. If you aren’t eligible through select methods including employees of the U.S. Department of State or members of select organizations, you can join the American Consumer Council during the application process. There is no fee associated with joining since State Department FCU pays the $8 on your behalf. There is a rewards program with this card where you earn Flexpoints, which can be redeemed for a variety of options like gift cards and travel. The APR can be as low as 14.24% variable, which is reasonable considering many secured cards from major issuers are above 23%.

What to look out for: If you decide to take out this card and become a member of the SDFCU by joining the American Consumer Council, make sure you do not go to the ACC’s website and submit a donation. That fee is waived by the SDFCU when you fill out your credit application. Simply select “I do not qualify to join through any of these other methods” and select the ACC from the menu to avoid the fee.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Alexandria White
Alexandria White |

Alexandria White is a writer at MagnifyMoney. You can email Alexandria at [email protected]

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