Capital One Secured MasterCard Review: A Great Tool to Rebuild Your Credit

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Editorial Note: This content is not provided or commissioned by any financial institution. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the financial institution.

The information related to Capital One® Secured Mastercard® has been collected by Student Loan Hero and has not been reviewed or provided by the issuer of this card prior to publication. Terms apply.

Holding and responsibly using a credit card is one of the fastest ways to improve your credit score. However, most credit cards will require at least average credit or better to qualify for a credit card.

It can become a circular problem in which using a credit card is the fastest way to improve credit – but you need good credit to qualify for a credit card.

That’s where secured credit cards such as the Capital One® Secured Mastercard® can help.

Capital One® Secured Mastercard® review

The Capital One® Secured Mastercard® reports borrowing activity and builds credit just like other cards. But with a cash deposit, even applicants with poor credit can get approved for this card.

Here’s a quick Capital One® Secured Mastercard® review:

  • Easy to qualify for and meant for rebuilding credit. So even if you have poor credit, you can still qualify for the Capital One® Secured Mastercard®.
  • Make a refundable cash deposit to open your Capital One® Secured Mastercard®.
  • $0 annual credit card fee, balance transfer fee or foreign transaction fee. Transparent costs and interest make it easy to manage and avoid credit card costs.
  • Access your free credit score and credit building tools through CreditWise from Capital One.

So is the Capital One® Secured Mastercard® right for you? That depends on your situation. It’s a great tool for rebuilding credit and learning to responsibly spend with a credit card.

However, the Capital One® Secured Mastercard® might not be your best option if you:

  • Have average credit or better. There could be better credit cards with more advantageous benefits available to you.
  • Can’t or don’t want to make a cash deposit, which will range from $49 to $200.
  • Carry a balance and pay credit card interest. With an APR of 26.99% (Variable), credit card debts on this card will cost you.
  • Want to earn rewards. The Capital One® Secured Mastercard® doesn’t offer any credit card rewards like points, miles, or cash back. However, most rewards credit cards require good to excellent credit.

How the Capital One® Secured Mastercard® works

As a secured credit card, the Capital One® Secured Mastercard® is accessible to borrowers who have bad credit or no credit. Capital One only requires that new cardholders put down a cash deposit of $49 to $200 depending on your creditworthiness.

This acts as collateral on your account. If you become delinquent, the credit card issuer can use the deposit against the amount you owe. But if you pay your balance in full, this security deposit is fully refundable upon account closure.

Usually, a secured card requires a cash deposit equal to the total credit line of the account. For example, a cash deposit of $300 would get you a matching $300 credit limit on a secured credit card.

The Capital One® Secured Mastercard®, however, matches the cash deposit required to your credit score. Those who have the worst credit will have to deposit the full $200 to get the card’s standard $200 limit. But those with higher credit might be able to get the $200 limit with a smaller deposit of just $49 or $99.

Want a credit line higher than the standard $200? All you need to do is add to your deposit. Capital One will raise your credit limit by $1 for each additional $1 you deposit. You can do this to increase your credit limit up to $1,000.

You can also wait and make on-time payment for five months. After that, Capital One will automatically raise your credit limit without requiring an additional deposit.

Do you qualify for a Capital One® Secured Mastercard®?capital one secured credit card review

The Capital One® Secured Mastercard® is accessible, even for consumers with poor credit (a FICO score below 630). In advertisements, Capital One is clear that the Capital One® Secured Mastercard® is “for people rebuilding credit.”

There are many reasons you might have a credit score below 630. People who have never had a credit card, have a short credit history, or have a thin credit file often have a poor credit score. You might also have poor credit if you’ve defaulted on a loan or credit card in the past.

The Capital One® Secured Mastercard® is still an option, even with no credit history or derogatory marks on your credit reports. And as mentioned above, the higher your credit score, the lower the deposit you’ll have to make.

If you’re not sure what your credit score is, or think you might be right on the border between poor or average credit, try the Capital One prequalification tool. You provide information about yourself and in just 60 seconds, Capital One returns a list of credit cards for which you’d be a good fit.

How to apply for the Capital One® Secured Mastercard®

If you’re ready to apply, the process is fairly easy. You can navigate to the page for the Capital One® Secured Mastercard® on Capital One’s site and click “Apply Now.”

 

This will take you to a secure online application for the Capital One® Secured Mastercard®. It will display the details of the card for you to review and have fields you’ll need to fill in before submitting your application. This page also includes links to frequently asked questions about this card and the application process.

Scrolling down, you’ll find the fields to enter in your personal information (pictured below). The Capital One® Secured Mastercard® online application asks for the following details:

  • Identifying information such as name, date of birth, U.S. citizenship status and Social Security number.
  • Contact details including residential address, email address and phone number.
  • Employment status and amount of total annual income.
  • The type of bank accounts you have.
  • Monthly rent or mortgage amount.

Once you’ve completed the field and reviewed the credit card disclosures, hit “Continue.” Capital One will process your application and notify you of their decision once it’s made. You can also apply by phone at 1-800-695-5500.

Make your Capital One® Secured Mastercard® deposit

If you’re approved, you still need to pay the Capital One® Secured Mastercard® deposit to get your card. The notification of approval will include instructions to submit your deposit and set up your account. Capital One also includes a button to submit a deposit on the Secured MasterCard page.

You will have to supply your Capital One customer number (which you received upon approval), your ZIP code, and the last four digits of your Social Security number to start your deposit process. Capital One will use this information to look up your account. You can then enter your bank account or debit card information to securely make the deposit.

Once Capital One receives and processes your deposit, it will send you your new Capital One® Secured Mastercard®. Follow the instructions on the card to activate it, and you can start using it to make purchases — just like any other credit card.

Using your Capital One® Secured Mastercard® to rebuild credit

Once you have your Capital One® Secured Mastercard®, you’ll want to use it responsibly to build credit. Unlike with a debit card or prepaid card, spending and repayment behavior on a Secured MasterCard and reports it to credit bureaus. These bureaus keep track of this borrowing and repayment behavior and add it to your credit reports.

If you’re rebuilding credit, you want to make sure that all your behavior on your Capital One® Secured Mastercard® is positive. Here are three ways you can use your Capital One card to build credit.

1. Always make payments on time

A positive payment history is the main ingredient of a good credit score. Luckily, Capital One gives you the flexibility to choose your own payment due date. Pick one that you can easily remember, and that falls at a time when you’ll have the funds to make your payment. You can even set up payment alerts to remind you when your due date is getting close.

2. Keep your credit card balance low

An important factor to your credit score is your credit utilization ratio. You want to keep your balance at 30 percent of your credit limit or less to keep it from hurting your credit. For the Capital One® Secured Mastercard®, that’s $60 to the $200 limit. To build credit, you’ll want to keep balances at or below half of that — around $30.

Here are some ideas to keep your balance low:

  • Limit spending on your Capital One® Secured Mastercard® to $30 or less each month. When you hit that limit each month, switch to another card.
  • Set up a balance alert for $30. When your balance reaches that high, pay your card off immediately. You’ll make more than one payment a month, but you’ll keep your balance and credit utilization low.
  • Make a bigger deposit to increase your spending limit. This will increase the amount you can safely spend. If you deposited enough to get the full $1,000 limit, for instance, a credit card balance of $150 or less would hit the 15 percent utilization mark.

3. Use Capital One CreditWise to monitor your credit score

Capital One actually has a great tool for monitoring and improving credit, with CreditWise. This is free to use and you don’t have to be a Capital One customer to use it. But as a cardholder, you’ll get easy access to your free credit score through CreditWise.

The credit tool will even analyze your credit, to help you understand the factors affecting your score. CreditWise will also suggest actions you can take to raise it.

The Capital One® Secured Mastercard® has several tools to help you rebuild credit. Additionally, you’ll also need to do your part by making on-time payments and keeping your credit card balances low.

Capital One® Secured Mastercard® fees and APR

If you’ve never had a credit card or have struggled with them in the past, the Capital One® Secured Mastercard® is easy to understand and use. A clear fee structure will help you anticipate and avoid credit card costs.

The Capital One® Secured Mastercard® has few fees. It has $0 annual credit card fee. Cardholders are not charged balance transfer fees.

There is a cash advance fee is 3% of the amount of the cash advance, but not less than $10.

The Capital One® Secured Mastercard® APR is fairly high at 26.99% (Variable), which is far more than the national average of 13.86%, reported by the Federal Reserve.

However, high APRs are common on credit cards designed for subprime consumers with poor credit. You’re not likely to get better offers without building credit. Plus, credit card interest is easy to avoid if you repay your balance in full each month.

Capital One® Secured Mastercard® customer experience

If you’re looking for a tool to rebuild credit, this card satisfies. Cardholders of the Capital One® Secured Mastercard® love that it is easy to qualify for. And according to Capital One Secured reviews on Credit Karma, cardholders saw their credit scores improve fast. One reviewer saw a credit score jump of around 120 points in just 10 months.

What didn’t cardholders like? Some thought getting their deposit back was harder than it should have been — the only way to do so is to close the credit card. Capital One® Secured Mastercard® cardholders also did see their credit limits increase with on-time payments, but only in modest increments.

Bottom line: the Capital One® Secured Mastercard® is a great tool to rebuild credit. Once you’re well on your way to a great score, you can decide if you’d rather keep the credit card open or close it to reclaim your deposit.

Capital One contact information

If you have more questions about the Capital One® Secured Mastercard®, you can easily reach their customer service team.

Call 1-800-695-5500 if you’re a potential customer interested in applying. Or if you already have an existing Capital One account, call 1-800-CAPITAL (1-800-227-4825).

Capital One is also responsive on its social media accounts. Reach out to on Twitter via @AskCapitalOne, or on the Capital One Facebook page.

Interested in a personal loan?

Here are the top personal loan lenders of 2019!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Fixed rates from 5.99% APR to 17.88% APR (with AutoPay). Variable rates from 6.49% APR to 14.70% APR (with AutoPay). SoFi rate ranges are current as of November 4, 2019 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.49% APR assumes current 1-month LIBOR rate of 1.81% plus 3.08% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.
    See Consumer Licenses.
  3. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  4. If you lose your job through no fault of your own, you may apply for Unemployment Protection. SoFi will suspend your monthly SoFi loan payments and provide job placement assistance during your forbearance period. Interest will continue to accrue and will be added to your principal balance at the end of each forbearance period, to the extent permitted by applicable law. Benefits are offered in three month increments, and capped at 12 months, in aggregate, over the life of the loan. To be eligible for this assistance you must provide proof that you have applied for and are eligible for unemployment compensation, and you must actively work with our Career Advisory Group to look for new employment. If the loan is co-signed the unemployment protection applies where both the borrower and cosigner lose their job and meet conditions.
  5. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Opploans.

Opploans Disclosures

Direct Deposit required for payroll.

Opploans currently operates in these states: . *Approval may take longer if additional verification documents are requested. Not all loan requests are approved. Approval and loan terms vary based on credit determination and state law. Applications processed and approved before 7:30 p.m. ET Monday-Friday are typically funded the next business day.

  1. To qualify, a borrower must (i) be a U.S. citizen or permanent resident; (ii) reside in a state where OppLoans operates; (iii) have direct deposit; (iv) meet income requirements; (v) be 18 years of age (19 in Alabama); and, (vi) meet verification standards.
  2. NV Residents: The use of high-interest loans services should be used for short-term financial needs only and not as a long-term financial solution. Customers with credit difficulties should seek credit counseling before entering into any loan transaction.

  3. OppLoans performs no credit checks through the three major credit bureaus Experian, Equifax, or TransUnion. Applicants’ credit scores are provided by Clarity Services, Inc., a credit reporting agency.

  4. Based on customer service ratings on Google and Facebook. Testimonials reflect the individual’s opinion and may not be illustrative of all individual experiences with OppLoans. Check loan reviews.

  5.  

    Rates and terms vary by state.


3 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

4 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 5.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 5.99% APR loan, a borrower will need excellent credit on a loan for an amount less than $12,000.00, and with a term equal to 24 months. Adding a co-borrower with sufficient income; using at least eighty-five percent (85%) of the loan proceeds to directly pay off qualifying existing debt; or showing proof of sufficient retirement savings, could help you also qualify for the lowest rate available.

5 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates from 6.79% – 20.89% (6.79% – 20.89% APR) based on applicable terms. Lowest rates range from 5.99%- 18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
     
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

6 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 35.99% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

7 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.

†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com

**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.


8 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

9 Important Disclosures for Avant.

Avant Disclosures

*If approved, the actual loan terms that a customer qualifies for may vary based on credit determination, state law, and other factors. Minimum loan amounts vary by state.

**Example: A $5,900 loan with an administration fee of 4.75% and an amount financed of $5,619.75, repayable in 36 monthly installments, with an APR of 29.95% would have monthly payments of $250.30.

Based on the responses from 11,574 customers in a survey of 210,584 newly funded customers, conducted from 1 Feb 2018 – 1 Aug 2019 95.05% of customers stated that they were either extremely satisfied or satisfied with Avant. 4/5 Customers would recommend us. Avant branded credit products are issued by WebBank, member FDIC.


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Personal loans made through Upgrade feature APRs of 6.98%-35.89%. All personal loans have a 1.5% to 6% origination fee, which is deducted from the loan proceeds. Lowest rates require Autopay and paying off a portion of existing debt directly. For example, if you receive a $10,000 loan with a 36-month term and a 17.98% APR (which includes a 14.32% yearly interest rate and a 5% one-time origination fee), you would receive $9,500 in your account and would have a required monthly payment of $343.33. Over the life of the loan, your payments would total $12,359.97. The APR on your loan may be higher or lower and your loan offers may not have multiple term lengths available. Actual rate depends on credit score, credit usage history, loan term, and other factors. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. There is no fee or penalty for repaying a loan early. Personal loans issued by WebBank, Member FDIC.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

5.99% – 17.88%1$5,000 - $100,000

Visit SoFi

5.69% – 35.99%$1,000 - $50,000

Visit Upstart

6.98% – 35.89%*$1,000 - $50,000

Visit Upgrade

99.00% – 199.00%2$500 - $4,000

Visit OppLoans

5.99% – 24.99%3$5,000 - $35,000

Visit Payoff

5.99% – 29.99%4$7,500 - $40,000

Visit FreedomPlus

6.79% – 20.89%5$5,000 - $50,000

Visit Citizens

15.49% – 35.99%6$2,000 - $25,000

Visit LendingPoint

6.95% – 35.89%7$1,000 - $40,000

Visit LendingClub

5.99% – 17.24%8$5,000 - $75,000

Visit Earnest

9.95% – 35.99%9$2,000 - $35,000

Visit Avant

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print to help you understand what you are buying. Be sure to consult with a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time.

Published in Credit & Debt, Credit Cards,

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