One way is to get a new credit card and prove that you can use it responsibly. But for many people with bad credit, the barrier to improve their credit is that they can’t get a new credit account approved in the first place.
In addition, if you are successful in obtaining approval, most credits cards for people with bad credit charge very high fees and interest rates, and many lack cardholder benefits and even acceptable customer service.
The Capital One Secured Mastercard® is different. They have no annual fees, and you get the same quality benefits and customer service that they get for their other credit cardholders.
- Annual subscription : $ 0
- Refundable Security Deposit Required: $ 49, $ 99 or $ 200
- APR: 26.99% variable APR
How Capital One’s Secured Mastercard® works
Secured credit cards work a little differently from traditional cards. To open a Secured Mastercard® from a Capital One account, you must first complete and submit an application, as usual. After approval, you will be notified of the refundable deposit you must submit, which will be $ 49, $ 99, or $ 200, depending on your credit history. Once you have submitted your security deposit, you will receive your new card with an initial line of credit within two to three weeks.
The card will then work like any other credit card, and no one will know that it is a secure card. Each month that you make a charge, you will receive a statement and you will need to make a minimum payment. The security deposit is only used in the event of a default, which you will definitely want to avoid when trying to build or replenish your credit.
Each month that you make your payments on time, you are adding positive information to your credit report, which can improve your credit score. Capital One will automatically consider your account for an increase in its line of credit in as little as six months. After a year of on-time payments, many people who started out with bad credit can qualify for a standard unsecured card and receive a refund of their deposit.
This card is also not a rudimentary product devoid of advantages. You’ll get rental car insurance, travel accident insurance, and extended warranty coverage for your qualifying purchases. This card has no annual fees or overseas transaction fees, and there is no application fee – which some secure cards charge.
It is one of the few cards with no annual fee that is designed for people who have had serious credit problems. Most secured cards limit a cardholder’s line of credit to the amount of their security deposit. But with this card, it is possible to benefit from a line of credit greater than your security deposit.
This product is offered by a well-respected credit card issuer and you have the option to eventually upgrade your account to an unsecured standard card. All in all, it has some solid advantages and very little cost.
Unlike a standard unsecured card, you will be required to submit a refundable security deposit. This is the standard for secure cards.
Secure credit cards: other options
Citi® Secured Mastercard®. This is another secure card from a major issuer that has no annual fee. It requires a refundable security deposit of at least $ 200, and the amount you choose to deposit becomes your credit limit. Unfortunately, Citi Cards no longer offer many cardholder benefits, such as rental car insurance or extended warranty coverage.
Discover it® secure credit card. This card also has no annual fee and requires a refundable deposit which becomes your credit limit. It even offers 2% cash back at gas stations and restaurants up to $ 1,000 in purchases each quarter, and unlimited 1% cash back on all other purchases. However, receiving small rewards for spending may not be the best incentive for those who have struggled with overspending and credit card debt.
BankAmericard® Secure. To open an account with this card, you must submit a refundable security deposit between $ 300 and $ 4,900, which becomes your credit limit. This card has no annual fee and provides you with a free monthly FICO credit score.
There are dozens of credit cards designed for people with bad credit, but many of them charge excessive fees and interest rates. Capital One’s Secured Mastercard® stands out in this popular field because it is a secure card with a minimum deposit, no annual fee, and good benefits.
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