Here’s a freshly updated review of the Capital One Secured MasterCard. About a year ago, there were changes regarding the security deposit and credit limits. Rest easy, I got your back. It’s all good and I’ll explain it in the “Rates & Fees” section below.
And just so you know, as I redo reviews, I leave the existing comments in place. Y’all are so generous with your time and the valuable information you give. I appreciate it more than I can say. And so do the readers who are desperate for the “goods” on a secured card.
Okay, enough chit chat. Let’s get to the good stuff.
Your payment history is reported to all three credit bureaus, so use this card responsibly and you’ll rebuild–or establish–your credit history and improve your FICO score. This card is reported to the credit bureaus as “unsecured.” I know that’s often a concern for those of you choosing a secured card. So you can rest easy on that score. (That pun was actually an accident, which makes it even more awesome, LOL.)
For more a simple explanation about how FICO scores treat secured credit cards, check out this post: Does the FICO Score Treat Secured Credit Cards Differently?
I’ve started hearing from folks who have graduated from the Cap One secured card to an unsecured Cap One Platinum card. There are several success stories in the comments section below. Someone mentioned that the security deposit was returned as a statement credit instead of a check. So keep that in mind. But if you’re using the card monthly, you’ll get your money back.
Your income and eligibility
One more thing. You are not eligible for this card if this statement (per the website) is true.
“My monthly income (my disclosed total annual income divided by 12) doesn’t exceed my monthly rent/mortgage payment by at least $425. Or, Capital One otherwise determines that I am unable to make my monthly payments.”
Example: Your monthly income is $4,000 and your mortgage/rent is $1,800. You’re fine because $4,000 minus $1,800 is $2,200, which is way over $425. But if your income is $2,000 and your rent is $1,700, then you aren’t eligible because your income is only $300 more than your rent. In this case, you aren’t eligible because a $300 difference doesn’t meet the $425 requirement. A hat tip to Guy in the comments section for pointing this out to me.
Rates and fees
You know what? The Capital One Secured MasterCard doesn’t have the best interest rates. But I still like it a lot because if you use this card properly (a.k.a., don’t carry a balance), then it won’t matter. I love the way the details for this card are presented so well on the card’s home page. And again, you have a shot at graduating to an unsecured credit card.
APR for purchases: You get a variable rate of 24.99 percent. This was recently increased from 24.90 percent. Okay, we won’t fuss too much about giving them an additional .09 percent. But they better not do it again!
Balance transfers: You get a variable rate of 24.99 percent. You may request a transfer 1o days after your account is opened. There’s no transfer fee. But interest starts ticking as soon as you transfer your balance from another card.
Annual fee: None. I like it a lot.
APR for cash advances: You get a variable rate of 24.99 percent. The transaction fee is 3 percent. Interest on a cash advance starts ticking right away, so if you’re desperate for cash, explore all other options first.
Foreign transaction fees: None, which is awesome.
Deposit and Credit limit: You must deposit a minimum of $49, $99, or $200, based on Cap One’s review of your application. Note that your security deposit does not earn interest.
Your limit will range from $200 – $3,000. If you make the minimum $49 deposit, you get a $200 credit line. You are required to make your deposit within 80 days of being approved. You can increase your approved credit limit by one of two ways:
- Make an additional deposit to increase your credit limit. But note that this has to be done within 80 days of opening your account and before you activate your card. You can make additional deposits to increase your credit limit up to $1,000.
- Make your first five monthly payments on time and you’ll get a higher credit limit without making an additional deposit. Use your card responsibly and good things could happen!
Bottom Line: The Capital One Secured MasterCard
The Capital One Secured MasterCard is an excellent secured credit card if you don’t carry a balance. And Capital One doesn’t charge foreign transaction fees on any of its cards, so if you’re in a situation where you have bad (or very limited) credit and you need to travel overseas, this card can save you money.
Unless you carry a balance, of course. Or get a cash advance at 24.99 percent interest. Say it with me: I’ll never carry a balance or get a cash advance!
I know emergencies happen, but do your darnedest to avoid these two situations. And “darnedest” is actually in the dictionary. I checked.
Capital One does not offer a free FICO score, but it does have its own Credit Tracker and educational score. It has a credit simulator, alerts, and a grade overview. The grade overview gives you a grade on specific factors considered by your score.
The scoring model used is the TransUnion VantageScore 3.0. So it’s not a FICO score, but it’s still helpful as a barometer of your credit health. I’ve gotten good feedback about it. If any of you have used the tools that come with the Credit Tracker, I’d love to hear what you think about it.
Overall, I’m giving this card a thumbs up and it’s in the top tier of my rankings on The Best (and Worst) Secured Credit Cards. If you aren’t familiar with my ranked list, check it out. It’s a super easy way to compare secured credit cards.
Note: Credit card agreements change frequently, so read all the disclosure statements carefully. My review is based on my opinion as an expert and on the information that I believed to be in effect today.