April 20th, 2010

REVIEW: Capital One Secured MasterCard

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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.



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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:

  1. Reports to the 3 major credit bureaus to build your credit history
  2. Enforces consistent, on-time payment history by requiring security deposit as cash collateral against default
  3. Restricted credit limit to discourage debt
  4. 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 APR. Other fees and rates are on the steep end too like most other secured cards; there is a balance transfer APR, 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. Plus there is no “one-time processing fee” like many secured cards charge and the security deposit can be as low as $49, 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.

Editorial Note: The editorial content on this site is not provided 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. Credit Karma may be compensated by companies mentioned through advertising, affiliate programs or otherwise. It is this compensation that enables Credit Karma to provide its members with services like free access to your credit scores and free monitoring of credit and financial accounts at no charge.

 

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 accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.

23 Comments

  1. Does Capital One do a soft or hard credit inquiry when applying? I am trying to stay away from hard inquires. Has anyone gotten this card yet?

    lbeadgirl at 10:56 pm on April 22, 2010
  2. Their card lab has a soft inquiry option to see what you qualify for. When you then apply, it will be a hard inquiry. There is no way around a hard inquiry with an unsecured credit card.

    Kenneth Lin at 4:19 pm on April 23, 2010
  3. But since this is a secured card, why would there be a hard inquiry?

    lbeadgirl at 7:58 pm on April 23, 2010
  4. My husband applied for the secured card and they did a hard credit inquiry. This dropped his score significantly.

    Jaime at 1:08 pm on May 11, 2010
  5. does this upgrade to an unsecured after months of good payment?

    nicole at 12:17 am on May 13, 2010
  6. Be careful. This card is so “secure” their fraud department will restrict your account until you fax them a copy of your social security card, state id, and utility bill. Even then, you can expect your card to get restricted down the road and then have to be put through the same security clearance all over again! Search the internet and you’ll see other card members have the same problems. Will never use this card again. I have had other credit cards with not nearly as many issues as this one.

    Kat at 5:35 pm on May 26, 2010
  7. yes it’s a hard inquiry. i was zapped o all 3 cra’s but it was approved !

    dan at 3:31 am on May 30, 2010
  8. Had This card for about 6 months now. Seems actually decent, Never have any problems. then again…i actually pay the bill lol.

    Josh at 12:31 pm on September 27, 2010
  9. Update on interest rates:

    APR for Purchase = 22.9% (Varies based on the Prime Rate.)
    APR for Transfers = 22.9%. (Ditto)
    APR for Cash Advances = 24.9%. (Ditto)

    Also, the annual fee has increased to $29.

    marsha at 3:35 pm on December 18, 2010
  10. I recently applied, it is a hard inquiry, but only knocked 2 points off my score. I was approved for a $200 limit with a $49.00 deposit. We’ll see how it goes!

    Brandi at 10:57 am on December 28, 2010
  11. This secured credit card is RIDICULOUS. They will restrict your card after some time and will hold the restriction until you verify your bank account information that you used to put a deposit with. If you make more than one deposit, using a different bank account, you will have to verify that as well.

    I made a deposit to open the cc, then used the cc on a couple of purchases, I then deposited another $100 to increase my credit line. They restricted my account after taking the money from my bank and said I have to verify the bank account I used to deposit the $100. The supervisor said I can fax over my bank statement. I then called Capital One to see if they’ve received my fax, they then told me that I need to send another fax verifying the first bank account I used to open the account. Never during the conversation I previously had with Capital One Customer Fraud Protection did they mention that.

    This credit card is not worth all the BS!

    Catherine at 5:40 pm on February 10, 2011
  12. What a waste of time and money!!! They take your money the next day from your account, and then they don’t make it available to you for 10 days!!! I set this account up so that I would have a card while traveling, as I really don’t like credit cards, and I don’t want a huge credit card bill when I get back. I basically plan to close this account once I return, because their policies are ridiculous!! It is a SECURED card, which means it’s YOUR MONEY!!! They charge you an annual fee to use YOUR OWN MONEY!!! I’ve only had the card for a few weeks, and I already hate it!!!

    Michelle at 6:31 am on May 21, 2011
  13. I haven’t had an issue with it yet, i have had it for a yr, but no credit limit increase, will increase the credit limit with a deposit and see how that goes..fingers crossed

    holimoli at 8:42 pm on July 2, 2011
  14. Gosh, Seems majority are most negative comments. But anyway, I was approved this card too to build a credit history. I deposited 49$ and they give me 200$ credit line.The processing doesn’t takes that too long. Lesser than 2 weeks.We have to wait few days so we can start using the issued card. It says they will report it to the 3 credit bureaus so I am expecting to build a credit.Capital one bank is one of the biggest bank like HSBC. I guess they need a cash collateral because many people don’t manage to pay their credit back for different reasons.Lossing job etc…Well we will see how does this goes and the deposit is refundable anyway.

    Pearl at 11:02 pm on August 5, 2011
  15. i need someone’s opinion. i was on my mom’s credit card so that i could build some credit, the eventually i got my own card from capital one. after that i got a secure master card which i was confused about does this mean i have a bad credit score already?

    jay at 1:23 pm on October 19, 2011
  16. im really worried if its a bad credit score. i applied to the transunion and they say they dont have enough info on me.

    jay at 1:25 pm on October 19, 2011
  17. Hi there! It sounds like you could have a thin file, meaning your credit history isn’t long enough (http://blog.creditkarma.com/credit-scores/what-is-a-thin-file/). Ask your question in our Credit Advice Center: http://www.creditkarma.com/all/advice. Others who’ve gone through similar situations can help give some tips.

    bethy at 1:56 pm on October 19, 2011
  18. I got approved, mine is $99 down. Have no idea what the line of credit will be, nor when the card will be in my hands. How long did it take you guys to receive the card? And what might my spending limit be?

    Colt at 11:16 pm on December 10, 2011
  19. I have seen a lot of complaints on this message board. So this post may be a shocker to some of you.

    My experience has been nothing but positive. I started out like most of you. My credit was in the toilet because of hospital bills that had gone into collections and the reality was that I put myself into this situation and now I needed to dig myself out. I spoke with a friend of mine who is a financial planner and he advised me that a secured card would be a good start to rebuild your credit.
    To make a long story short, I’ve had the card for about 8 months now. I started out with a $300 limit and 5 months into it they bumped up my limit $100 without me asking for it.
    They report promptly to all 3 credit bureau’s and because of this my credit score has gone up in a positive direction. Their services and tools have helped me significantly and I won’t even get started on how easy it is to use their web site for bill payments and account management. They really have made working with them simple and easy.
    This is one customer that is happy to have a CapitolOne card in his pocket!

    Jaime at 10:46 pm on January 18, 2012
  20. well my card is on its way and i hope to get my credit score high enough to buy a house!!

    Brandin at 12:16 am on April 16, 2012
  21. I received a mailer for this card – $49 deposit for a $200 credit line.

    Seemed too good to be true – so I called. Yes, the interest rate is high. I have made some extremely bad decisions credit wise in the past so I was expecting that. My offer included no annual fee.

    I have had this card, and used it responsibly for months. I haven’t been playing games with a half dozen bank accounts, and I pay my bill in a timely manner. I haven’t had a single problem (I suppose I could gripe about the late fee – I did miss one payment by a few hours, but it was 100% my own fault for not paying enough attention, charge was about $20)

    Last week I was approved for a loan on a brand new car. Thank you very much CapOne.

    vilerage at 1:28 am on August 26, 2012
  22. I got approved for this card with the 49$ down payment. I sent in a little extra to make my available balance a little higher. Approved and received my card in exactly 2 weeks. I have only used it once, for a small (0.01c as it was a promotional offer of a monthly box)and plan on keeping a small balance on it when I do use it (which probably won’t be monthly). Hopefully my credit will improve with the card. The only downfall for me so far as been the annual fee.

    Valerie at 10:21 am on July 17, 2013
  23. I just applied for this card at the advise of a mortgage broker. My wife and I are wanting to buy a house in the near future but were having issues with me getting a line of credit. All credit card companies would deny me based on the fact that I had no revolving credit (which was exactly what I was trying to get). I don’t mind the “hard inquiry”, “annual fee” or “deposit” that this card/company is doing or asking of me because NO ONE else would approve me for a line of credit. I am optomistic and excited to help improve my credit and get the ball rolling towards home ownership.

    James at 12:00 pm on August 13, 2013

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