[Disclosure: Cards from our partners are reviewed below.]
You have heard how important your credit is, and maybe you’re just taking your first steps to build credit and don’t have any yet. Or maybe you have made some mistakes and now need to build your scores back up, especially if you’re hoping to get a loan before too long. Whatever situation led you to need to boost your credit scores, a secured credit card like the Capital One Secured Mastercard may be able help.
The Capital One Secured Credit Card: The Details
After you’ve applied and been approved for this secured credit card, you’ll be notified of how much cash you need to supply as your security deposit — either $49, $99 or $200, depending on your creditworthiness. Once you’ve paid that, you’ll have an initial credit line of $200. Not enough? You can deposit more money before the account is open to bump up that amount (up to $3,000).
Paying your statements on time is not only important to help you build good credit (more on that in a bit), but doing so with your Capital One Secured credit card can reward you in other ways. In particular, you’ll have access to a higher credit limit after you make your first five payments on time (and you won’t have to put any additional money down). That’s a good feature for a secured credit card, as it can help you improve your credit utilization ratio — the second largest financial behavior that impacts your credit scores. To have the best effect on your scores, experts recommend keeping your debts at 30%, and ideally 10%, of your total credit limit.
That’s a great perk of this card, especially because paying your statements on time and in full means you won’t be hit with interest charges. This card carries one of the highest APRs for a secured credit card — 24.99% (Variable) — so even paying a couple statements late can really add up.
There’s a $0 annual fee with this card, which can be a great savings as you work to build up your credit.
Secured Credit Cards
Before you can get approved for the Capital One Secured Mastercard, or any other credit card, it’s a good idea to review your credit. (You can see two of your credit scores for free on Credit.com.) Once you know where you stand, you will have a better idea of what types of cards you may qualify for.
Secured cards are typically meant for people who are just entering the credit world or rebuilding their credit, as these cards can help build a healthy credit profile (when used responsibly, of course). As we mentioned earlier, it’s important to make your payments on time, as payment history is the largest influencer (35%) of your credit scores.
Whenever you’re considering adding plastic to your wallet, it’s essential to do your research and compare your options. While the Capital One Secured Mastercard may be one card you’re considering, here are two credit-building credit cards you may want to take a look at.
Citi® Secured Mastercard®
- No Annual Fee, and unlike a prepaid card, it helps build credit history with monthly notifications to the credit bureaus
- A security deposit is required for this product (minimum $200)
- Pay your bill on time every month to avoid damaging your credit. Citi can help keep you on track with Auto Pay, online Bill Pay and alerts.
- Use the card anywhere Mastercard® is accepted — worldwide
Card Details +
Card Details: This is a good option if you’re looking for a straightforward starter card. Your security deposit with this card can be anywhere from $200 to $2,500. This amount is also seen as your credit limit. [Full Disclosure: Citibank advertises on Credit.com, but that results in no preferential editorial treatment.]
Discover it® Secured
- No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
- Your Secured Credit Card requires a refundable security deposit up to the amount we can approve of at least $200 which will establish your credit line. You will need to provide your bank information when submitting your security deposit.
- We will automatically begin reviewing your account starting at 8 months to see if we can transition you to an unsecured line of credit.
- Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Plus, earn unlimited 1% cash back on all other purchases – automatically.
- Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
- Receive FREE Social Security number alerts-Discover will monitor thousands of risky websites when you sign up.
Card Details +
Card Details: This card takes things one step further. Not only can this be a tool that helps you build your credit, it can earn cash back rewards at the same time. You’ll get 2% cash back from dining out and filling up at the gas pump (up to $1,000 in combined purchases each quarter) and 1% cash back on all other purchases. After the first year, your total cash back amount will be matched. (Note: There is a minimum cash deposit requirement of at least $200 for this card, which will act as your credit limit.)
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
At publishing time, the Capital One Secured Mastercard, Citi Secured Mastercard and Discover it® Secured are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.