April 20th, 2010
REVIEW: Capital One Secured MasterCard
21 Comments |
Healthy credit is a financial necessity that can save you a significant amount of money in low interest rates on auto loans and mortgages, cheaper premiums for insurance, as well as the best terms on credit cards. Unfortunately, you don’t have stellar credit. A smart solution to your poor credit conundrum is Capital One’s Secured Mastercard and Secured Mastercard for Young Adults. These two new products from Capital One are perfect for those with bad credit or limited credit history looking to build credit and need the added safeguards a secured card offers while still getting the convenience of a credit card.
While secured cards have been a mainstay for small credit unions and local banks, big banks like Capital One are getting in the competition too. Capital One’s Secured Mastercard is specifically designed for poor/no credit history consumers with a credit scores below 649. A secured card from Capital One is a smart, credit-healthy step for consumers in this category because:
- Guaranteed approval for most consumers in this credit score range
- Reports to the 3 major credit bureaus to build your credit history
- Enforces consistent, on-time payment history by requiring security deposit as cash collateral against default
- Restricted credit limit to discourage debt
- Encourages positive credit management and usage
Overall, both the Secured Mastercard and Secured Mastercard for Young Adults (aimed at those 21 and under; requires a co-signer and other credit requirements for young cardholders) have all the basic secured card features. Both cards have a relatively steep 22.9% APR. Other fees and rates are on the steep end too like most other secured cards; there is a 22.9% balance transfer APR, 24.9% cash advance fee, tiered late payment fees, and return check fees.
Capital One’s Secured Mastercard’s standout feature is affordability, with a competitively-low annual fee of $29. Plus there is no “one-time processing fee” like many secured cards charge and the security deposit can be as low as $75, whereas most secured cards require upwards of a $150-$200 security deposit. Lastly, Capital One offers credit line increases to qualified cardholders without additional security deposits.
Another nice bonus is the free suite of tools and resources Capital One offers to track and monitor your spending. Think of these cards as your training wheels in the credit world.
If you want one of the most affordable secured cards out there, Capital One Secured Mastercard and Secured Mastercard for Young Adults is a good pick. Just be careful of racking up too much in extra charges and interest or you’ll cancel out all the savings and good karma you’re supposed to earn in responsible credit behavior.
Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and factual. This content is not provided or commissioned by the bank or issuer. Opinions expressed here are author’s alone, not those of the bank or issuer, and have not been reviewed, approved or otherwise endorsed by the bank or issuer. For complete product details visit bank or issuer website for details.