Capital One Secured Mastercard Review
This article was last updated Aug 14, 2018. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.
Who the card is best for
The Capital One® Secured Mastercard® is a good $0 annual fee secured card for people looking to rebuild credit and may not have the typical $200 available for a security deposit. Capital One considers someone rebuilding credit as a person who has defaulted on a loan more than once or been declined for a credit card in the last three months. These standards give you a better chance at approval than those of typical credit cards or some other secured cards.
This card doesn’t offer rewards, and while rewards aren’t a common feature in this category, there are a few secured cards that offer rewards programs, if you’re looking to earn rewards while you rebuild your credit. And, if you’re someone with fair to excellent credit, you can qualify for unsecured cards that have more benefits like rewards and bonuses.
Where this card stands out in its category
This card offers cardholders an initial $200 credit line after making a security deposit of $49, $99 or $200. So, if you’re approved for a $49 security deposit, you will still receive a $200 line of credit. That’s compared to the majority of secured cards which require a deposit of $200 to receive a $200 line of credit. This feature benefits people who may not have a lot of money available to deposit and can qualify for the lower deposit.
Where this card falls short in its category
There are no rewards for the Capital One® Secured Mastercard®, and although that’s typical of secured cards, you can find secured cards that offer rewards. But, take note that they may require larger security deposits. Lack of a rewards program isn’t necessarily a bad thing, because the purpose of a secured card is to build credit and improve your credit score so down the line you can qualify for an unsecured card — that potentially has rewards.
Additional card benefits
The Capital One® Secured Mastercard® has several additional card benefits:
- Access a higher credit line: Make your first five monthly payments on time and receive a higher credit line with no additional deposit needed. This is a great incentive to pay on time and can provide you with a credit line greater than $200.
- Platinum Mastercard benefits: Take advantage of great perks like 24/7 travel assistance services, price protection, travel accident insurance, auto rental insurance and more when you use your card. Terms apply.
- CreditWise®: Receive access to your credit score for free with CreditWise®. You can sign up for alerts when changes like inquiries and delinquent accounts appear on your TransUnion® credit report, and you can also use a simulator to see the potential impact some financial decisions might have on your credit score.
How to use it most effectively
With the Capital One® Secured Mastercard®, focus on improving your credit score by practicing responsible credit management. That means you should pay your bill on time and in full each month to avoid interest charges, fees and other penalties. Also try to maintain a low credit utilization rate — this is the amount of credit you use divided by your total credit limit. Experts recommend keeping your credit utilization rate as low as possible, but a good rule of thumb is to keep it below about 20%. For example, if you have a credit limit of $200, try not to spend more than $40 a statement. By following these practices, you can see improvements in your credit score over time. Capital One also has a resource center where you can learn about helpful credit tips to raise your credit score.
Compare it with the Discover it® Secured
The Capital One® Secured Mastercard® and Discover it® Secured are perhaps the two best options for secured cards from major issuers. Both cards provide you with the foundation to improve your credit, but they differ in two important factors: security deposit and rewards. The Capital One® Secured Mastercard® offers a range of security deposits at $49, $99 or $200, while the Discover it® Secured requires a $200 deposit. You may not have the money available for a $200 deposit, so the Capital One® Secured Mastercard® can be a better choice — just remember you are not guaranteed one of the lower deposits.
When it comes to rewards, the Discover it® Secured offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases.. This is a good rate, especially considering the majority of secured cards lack rewards, like the Capital One® Secured Mastercard®. The card that’s best for you depends on whether you want to earn rewards while building credit, or if you want a card that potentially requires a lower security deposit.
Here’s a breakdown of the key features of each card:
| Capital One® Secured Mastercard® | Discover it® Secured | |
|---|---|---|
| Annual Fee | $0 | $0 |
| Minimum Security Deposit | $49, $99 or $200 | $200 |
| Purchase Intro Rate | N/A | N/A |
| Balance Transfer Intro Rate | N/A | 10.99% APR for 6 months |
| Balance Transfer Fee | $0 | 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms)* |
| Regular Purchase APR | 26.99% (Variable) | 24.49% Variable |
| Rewards | Non-rewards Card | 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, automatically. 1% unlimited cash back on all other purchases. |
| Sign Up Bonus | No bonus | Discover will automatically match ALL the cash back you earn at the end of your first year. |
| Foreign Transaction Fee | $0 | None |
Bottom line
The Capital One® Secured Mastercard® can provide you the resources to improve your credit and has a great feature for people who don’t have a lot of money available with security deposits of $49, $99 or $200.
