Is The Capital One Platinum Secured Worth It?

Secured bank cards can provide the likelihood to construct up your credit score rating when you possibly can’t discover a higher different. These playing cards allow you to safe your personal line of credit score with a money deposit, and so they’ll report your credit score balances and funds to the three credit score bureaus. Over time, this reporting will help you construct your credit score scores with Experian, Equifax and TransUnion.

There are numerous standard secured playing cards to select from, together with the Capital One Platinum Secured Credit score Card. However, when it comes right down to it, is the Capital One Platinum Secured actually value it? This overview will clarify the professionals and cons of this card, who it’s greatest for and different particulars you need to think about as you make your resolution.

When is the Capital One Platinum Secured value it?

You need to put down a small safety deposit

It’s necessary to learn about a few of the main advantages of the Capital One Platinum Secured Credit score Card. One upside is the truth that, not like different secured playing cards that require increased safety deposits, this card allows you to start constructing credit score with a minimal safety deposit as little as $49 should you qualify. With this residue, your preliminary credit score line shall be not less than $200. Though that is comparatively low for a secured bank card, it’ll be sufficient that can assist you construct your credit score.

Normally, the quantity you set down for a safety deposit serves as your credit score restrict. So, with different secured playing cards, a beginning restrict of $200 would usually require placing down $200 as a deposit.

You have to construct your credit score

This card provides you the possibility to construct credit score with accountable use, which incorporates making on-time funds. Nevertheless, to enhance your credit score rating, keep in mind that you’ll additionally must preserve your credit score utilization ratio — which is the quantity of credit score you’re utilizing in relation to the quantity of credit score you’ve gotten entry to — under 30 %. So, for a card with a $200 credit score restrict, you’ll need to preserve your credit score utilization at or under $60.

You need to improve your credit score restrict over time

You possibly can qualify for computerized credit score line evaluations in as little as 6 months. Throughout these evaluations, Capital One will think about rising your credit score restrict. In the event you come into extra cash earlier than then, you possibly can improve your safety deposit (as much as $1,000) to lift your credit score restrict. On this case, your new credit score restrict will equal your safety deposit. So, should you put down $1,000, you’ll have a restrict of $1,000. You possibly can then use as much as $300 of your credit score line and nonetheless preserve your credit score utilization on the desired 30 % or much less.

You don’t need to pay an annual price

The Capital One Platinum Secured Credit score Card doesn’t cost an annual price. This can be a good perk contemplating that different secured bank cards sometimes cost annual charges.

You need to improve to an unsecured card over time

You possibly can finally get your safety deposit again and improve to an unsecured card. In reality, this issuer says you possibly can finally improve to an unsecured card just like the Capital One Platinum Credit score Card, which is for customers with not less than honest credit score. This card additionally comes with no annual price, and because it’s an unsecured card, it’ll assist you to construct your credit score with out placing down a safety deposit.

You need to get preapproved

Better of all, the Capital One Platinum Secured Credit score Card lets potential prospects get preapproved on-line with no exhausting inquiry on their credit score experiences. That is simply one more reason this card is ideal for individuals who want the possibility to construct credit score however need to make the method as seamless as attainable.

When is the Capital One Platinum Secured not value it?

You need to earn rewards

Whereas this card provides a doubtlessly decrease minimal safety deposit than different comparable playing cards, there’s one main draw back. The Capital One Platinum Secured Credit score Card doesn’t supply any rewards in your spending, whereas another secured playing cards do.

For instance, some secured playing cards that supply rewards embrace the Uncover it® Secured Credit score Card and the Financial institution of America® Limitless Money Rewards Secured bank card*. Neither of those playing cards fees an annual price and also you’ll get to earn money again on all purchases.

As an example, the Financial institution of America Limitless Money Rewards Secured lets prospects earn a flat 1.5 % money again on all their purchases. In the meantime, the Uncover it® Secured Credit score Card provides:

• 2 % money again at gasoline stations and eating places (on as much as $1,000 in mixed purchases every quarter, then 1 % again)
• 1 % again on all different purchases

Uncover even provides a welcome bonus for brand spanking new cardholders — which is uncommon with secured playing cards — that doubles the entire money again cardholders earn on the finish of their first 12 months.

You intend to hold a stability

One other draw back of the Capital One Platinum Secured is its excessive variable APR, which presently is available in at 29.99 %. In the event you plan to hold a stability on this card, this sky-high APR could cause you to pay significantly extra for every part you buy.

Compared, the Financial institution of America Limitless Money Rewards Secured features a variable APR of 29.24 % and the Uncover it® Secured Credit score Card has a variable APR of 28.24 %.

Do you have to get the Capital One Platinum Secured?

Think about getting the Capital One Platinum Secured Credit score Card in order for you the bottom minimal safety deposit you’ll find and should you don’t care about rewards. This card will also be a superb possibility should you plan to pay your stability in full every month.

If you would like rewards or a decrease APR, you need to take a look at secured bank cards from different issuers. There are many bank cards for unfavorable credit ratings or no credit score historical past to contemplate, so wait to use till you’ve had time to match a number of choices.

The underside line

Whereas the Capital One Platinum Secured Credit score Card could not appear to be the most effective card on the market, it may be a useful instrument to construct credit score when you possibly can’t get authorized for an unsecured bank card. The truth that the Capital One Platinum Secured allows you to put down as little as $49 as a deposit is one other main plus, particularly should you’re quick on money. And keep in mind, this safety deposit is absolutely refundable whenever you shut or improve your Capital One account in good standing.

With some persistence and accountable credit score use, you should use this card (or one other secured bank card) to enhance your credit score rating over time.

*The details about the Financial institution of America® Limitless Money Rewards Secured bank card has been collected independently by Bankrate. The cardboard particulars haven’t been reviewed or authorized by the issuer.

The Financial institution of America content material on this submit was final up to date on September 9, 2024.