If you have bad credit, it’s tough to find an unsecured credit card that doesn’t try to pick your pocket with fees and high APRs. For example, the Credit One credit cards look good on the surface, but not when you look under the hood. And, as you know, I love to look under the hood.
The problem with these cards? The terms and conditions are kind of vague when it comes to the grace period. And you guys also know I’m adamant about cards having a grace period.
For those who don’t know what the heck I’m talking about, let me explain. Grace periods are usually between 21 and 25 days. So if you pay your bill in full during that time, you don’t pay interest. If you use a credit card that doesn’t have a grace period, the interest charges begin as soon as your purchase gets posted to your account. This means you can’t really avoid paying interest even if you pay the balance in full and on time.
I don’t care how bad your credit score is. You deserve a grace period.
Here’s where the confusion sets in. There is, actually, a portfolio of credit cards from Credit One Bank. They are all fairly easy to get and they even have rewards. Here they are: Credit One Platinum Visa for Rebuilding Credit, Credit One Cash Back Rewards Visa, and the Official NASCAR Visa.
But which ones have a grace period? In the Terms & Conditions disclosure statement on the website, it says this:
“If your Account has a Grace Period, your due date is at least 24 days after the close of each billing cycle and Interest will not be charged on any Purchases if your entire balance is paid by the Payment Due Date each month. For Accounts with no grace period, Interest is charged on Purchases from the posting date. All Accounts are charged Interest on Cash Advances from the posting date.”
Okay, kudos to Credit One for adding a grace period to some cards. But total transparency involves disclosing which cards have a grace period and which do not. If you are thinking about applying for one of their cards, ask about the grace period first.
If you get one with a grace period, that’s good. But keep in mind that you still have other fees to think about. I’m calling Credit One to see if I can find out which cards have grace periods. If any of you have a Credit One card, please let us know if you have a grace period. Thanks in advance!
I always like to see rewards and all the Credit One credit cards have them. I’ll break it down by card for you:
Cash Back Rewards Visa: 1 percent cash back on all purchases.
Platinum Visa for Rebuilding Credit: 1 percent cash back on eligible purchases, which include groceries and gas. You also get 1 percent on mobile phone, cable, Internet, and satellite TV services.
NASCAR Visa Credit Card: 1 percent cash back on eligible gas and automotive purchases and double cash back at NASCAR.com.
Rates and fees
Okay, let’s get down to the nitty-gritty for the Credit One credit cards. I’m grouping them together because the rates and fees offer ranges and your APR will depend on your creditworthiness and the specific Credit One card you choose.
APR: You get a variable rate between 17.24 percent and 25.24 percent. This has gone up a little since my last review.
Balance transfers: Not applicable.
APR for cash advances: You get an APR between 19.15 and 26.15 percent. The transaction fee is either 8 percent or 3 percent. This is making my head hurt. Why can’t they just tell you which card is 8 percent and which card is 3 percent?
This fee is usually around 3 percent to 5 percent tops, so an 8 percent transaction fee is unusually high. I’ll make it easy for you (and for my head). Just say no to cash advances. The interest starts accruing the second your purchase is posted to your account.
Annual fee: It’s $0 to $75 for the first year; after that, it’s $0 to $99. In the second year, you’re annual fee is divided into 12 portions and you’ll be billed for it each month. For example, if the annual fee is $60, you’ll be billed $5 per month (60/12 = 5).
There’s also an “Authorized User Participation Fee” of $19 per year. Is this like a getting a participation trophy in Little League?
Foreign transaction fees: It’s 3 percent. This is actually within the normal range, but it isn’t listed with the other fees, such as the annual fee. I found it deep in the depths of the fine print in the Cardholder Agreement. Hang onto your hats because this baby is 187 pages. If you want to check it out (just in case you don’t believe me, LOL), you can click on Cardholder Agreements, which you’ll find at the bottom right on that page.
Penalty fees: Up to $37 for a late payment; up to $35 for a returned payment.
Online payment fees: I had to go to the bank’s FAQs section to find this. Thanks to awesome reader, RJ, for sending me an email and letting me know about this. Here’s the deal:
When using your online account to pay, if you choose the Standard Payment option, there is no fee. Per Credit One’s website, “your funds will be available within 7 days.” Plan on making payments at least a week before the due date so you can choose this option.
Note that this option is only available to those who have a bank account. So if you’re one of the millions of “unbanked” folks, this is unfortunate because the other option has a fee.
With the Express Payment option, there’s a $9.95 fee every time you make a payment. Over a year of express payments, you’ll have spent $120 just for the privilege of making a payment on your credit card balance.
If you have a bank account, use the Standard Payment option. Be sure you allow time for your payment to post. If you wait until it’s almost the due date, you’ll end up on the Express Payment treadmill.
Delay on payments posted to your account: If you make a payment on a balance, Credit One states that you won’t have access to the newly available credit until 12 days after they receive it. For example, let’s say your credit limit is $300 and your balance is $100. If you send a $100 payment, your available credit doesn’t increase by $100 until 12 days after they receive it. If you mail it, you need to add two or three more days. So count on a 14-day delay from the time you mail the check to have the available credit again. Do NOT send cash.
Credit limit increases: There’s a fee and it ranges from zero to $49, depending on how long you’ve had your account and “your credit history with us and others.” It also sounds like they will do a review of your credit report again so be prepared for a hard inquiry. This can decrease your score a few points.
Oh, and one more thing
The minimum payment due is 5 percent of your balance. This is pretty high. If your balance is $2,000, your payment is $100. You need to be aware of this so you don’t get in over your head financially with this card.
The issuer is trying to sell you a “credit protection program” and it’s usually a waste of money. It costs $0.96 per every $100 of your balance. These programs are over-priced and often don’t even pay off when you need them. Resist the hard-sell tactics that try to make you feel like you can’t survive without this “insurance.”
Does the logo make you think of Capital One?
I was interviewed by Bloomberg News a few days ago because Credit One Bank is growing rapidly all of a sudden. The reporter was working on a story about how the Credit One logo looks so much like Capital One’s. It’s so close, that many consumers apply for a Credit One card when they think they are applying for a Capital One card.
I thought that maybe Credit One was going for a halo effect. But this reporter had done the research and told me that Credit One actually had the logo first. So my apologies to Credit One for my mistake. But I can still be mad about the grace period thing!
But she did ask me about the fees and rates, too. And yes, I mentioned the grace period problem. If you’re interested in reading the story, you can find it here: The Strange Case of the Look-Alike Credit Cards.
The bottom line for Credit One credit cards
I’d like to edit this classic line from Star Wars: “These aren’t the droids you’re looking for.”
Regarding the Credit One Bank portfolio: These probably aren’t the credit cards you’re looking for. And may the force be with you if you decide to get one of these cards.
Now, I acknowledge and applaud Credit One for adding a grace period to some cards. But which credit cards have them? I’ll bet many folks who get approved for one of their cards have no idea if they’re signing up for a card with no grace period. It would be so easy to end up in credit card debt.
So I urge all of you to ask about the grace period if you are offered a Credit One credit card. And I promise that’s the last time I’ll talk about grace periods. Well, in this review, at least (LOL).
Credit One’s credit cards are sometimes listed on credit card comparison sites as cards for people with fair credit, which is (roughly) a FICO score between 650 and 699. If you have fair credit, you can get much better terms with other credit cards that target consumers with average credit.
You could also consider taking a look at a secured credit card. You can find secured credit cards that are less expensive than the Credit One credit cards. Check out my list of neurotically thorough reviews: The Best (and Worst) Secured Credit Cards.
Note: This is an updated review of Credit One credit cards. I’ve left previous comments in place because many of them offer valuable information. So that’s why you’ll see so many great comments.
Another note: Credit card agreements change frequently. So my review is based on the information that I believed to be in effect today. Be sure you read all the disclosure statements carefully. I don’t make money from credit card referrals so you can be confident you’re getting my honest opinion.