Money Analysed

Building Credit with Capital One Platinum Secured Credit Card: Pros and Cons

Introduction to Capital One Platinum Secured Credit Card

Are you looking for a credit card to help build or improve your credit score? If you’re struggling to get approved for an unsecured credit card or trying to rebuild your credit, the Capital One Platinum Secured Credit Card may be what you need.

This credit card is designed for people who need to build or rebuild their credit score. If you’re unsure if a secured credit card is the right choice for you, keep reading to learn more about the

Capital One Platinum Secured Credit Card benefits and who should consider applying for it.

Card basics

A secured credit card is different from an unsecured credit card because it requires a security deposit that becomes your credit limit. When you deposit money with the issuer, they use it as collateral in case you miss a payment.

When you use the card, it looks like any other credit card, but it differs in that you must have a cash deposit to back up your use. The Capital One Platinum Secured Credit Card is no exception, and as a secured credit card, it has a low credit limit equal to your deposit.

The credit limit ranges from $200 to $3,000, depending on how much you’re willing to deposit. The advantage of having a secured credit card is that it provides a path to building a credit history or repairing damaged credit.

Each month you use the card and make payments, your score goes up. After a few months or a year of good payments, you may be eligible for an unsecured credit card or other loans.

Who should get the Capital One Platinum Secured Credit Card? The Capital One Platinum Secured Credit Card is suitable for people who need to start building or rebuilding their credit score.

If you’ve had financial trouble in the past, have never had credit, or are new to the US, this credit card can help. Another group of people who could benefit from a secured credit card are those who have a bad or low credit score.

If you have a credit score of 580 or less, it can be challenging to get approved for an unsecured credit card. That’s where the Capital One Platinum Secured Credit Card comes in handy.

Anyone willing to keep up with deposit payments could be approved for this credit card.

Capital One Platinum Secured Credit Card benefits

1. Access to a higher credit line

With the Capital One Platinum Secured Credit Card, you can access a higher credit limit.

After five months of on-time payments, you can qualify for a higher credit limit with no additional deposit required. This feature can help you manage your expenses better, allowing you to make larger purchases, pay bills on time, and use your credit card more efficiently.

2. No annual fee

You don’t have to pay an annual fee to use the Capital One Platinum Secured Credit Card.

It means that you can keep more money and use it elsewhere to build your credit. This feature helps keep the cost down and allows you to focus on improving your credit score.

3. No foreign transaction fees

The Capital One Platinum Secured Credit Card has no foreign transaction fees.

It is a great feature if you travel a lot or wish to buy items from international vendors. On other credit cards, foreign transaction fees are charged on every transaction, so its inconvenient.

Capital One allows you to use your credit card abroad without these extra charges. 4.

Personalized Payments

With the Capital One Platinum Secured Credit Card, you can personalize your payments according to your convenience. You can choose your preferred payment dates and make payments anytime from your mobile phone or computer.

This feature helps you stay on top of your bills and manage your money more efficiently. 5.

Travel coverages

The Capital One Platinum Secured Credit Card offers several travel coverages. It includes travel accident insurance, auto rental collision damage waiver, and 24-hour travel assistance services.

You can travel confidently using the credit card, knowing that you’re covered against any unforeseen events. 6.

Credit report alerts

Creditwise, a free credit monitoring service available for Capital One cardholders, provides credit report alerts. It helps you keep track of your credit score and detects changes in your credit report so that you can take action if necessary.

This feature can help you stay on top of your credit score and make informed credit decisions. 7.

Fraud liability

The Capital One Platinum Secured Credit Card provides $0 fraud liability for any unauthorized purchases if your card is lost or stolen. This feature lets you use your credit card without worrying about fraudulent activities.

Conclusion

In conclusion, the Capital One Platinum Secured Credit Card is an excellent credit card if you’re starting or building your credit score. It offers several benefits, including personalization of payments, free credit monitoring, no annual fees, and travel coverage.

As with any credit card, it’s important to use it responsibly to build your credit score and keep your finances healthy.

3) Drawbacks of the Capital One Platinum Secured Credit Card

While the Capital One Platinum Secured Credit Card offers many benefits for those working on building or rebuilding their credit score, it does come with some drawbacks. Here are some of the significant disadvantages of this credit card:

1.

No rewards program

One of the most significant drawbacks of the Capital One Platinum Secured Credit Card is that it does not offer a rewards program. If you’re looking for a card that earns rewards, such as cashback or points, you’ll need to look elsewhere.

While the card does offer several benefits, such as no annual fee and no foreign transaction fees, the lack of rewards can be a turn-off for some people. 2.

High APR

Another drawback of the Capital One Platinum Secured Credit Card is its high APR. The interest rate on this card is 26.99% variable, which is higher than many other credit cards.

If you’re not careful with your spending and payments, the high APR can result in significant interest charges. As a secured credit card, the interest rate is relatively high; however, if you use and make payments on time, it won’t affect you much.

3. Security deposit required

To get the Capital One Platinum Secured Credit Card, you’ll need to put down a security deposit.

While this deposit is refundable, it can still be a significant upfront cost, particularly if you need to put down a large sum of money. The deposit amount is equivalent to your credit limit, which varies based on how much deposit you put in.

If you’re unable to pay the full deposit, your credit limit will be lower, which may limit your purchasing ability. Also, if you need the cash for something else, such as an emergency, you won’t have access to it until you close your account or upgrade to an unsecured card.

4) Capital One Platinum Secured Credit Card FAQs

If you’re interested in the Capital One Platinum Secured Credit Card, you may have some questions. Here are some of the frequently asked questions about this credit card:

1.

How does the Capital One Platinum Secured work? The Capital One Platinum Secured Credit Card works like any other credit card, but you’ll need to make a security deposit that becomes your credit limit.

You’ll use the card to make purchases as you would with any other credit card in the allotted credit limit range and pay your balance on time monthly. 2.

What is the credit limit on the Capital One Platinum Secured? The credit limit on the Capital One Platinum Secured Credit Card is the same as your security deposit.

You can deposit anywhere from $200 to $3,000 depending on your creditworthiness, and your credit limit will be the same as your security deposit amount. 3.

Can you get a credit increase on the Capital One Platinum Secured? Yes, you can get a credit increase on the Capital One Platinum Secured Credit Card after you consistently make timely payments for the first five months.

If you qualify for an increase, you can get an increase in your credit limit without putting down an extra deposit. 4.

How long does it take for the Capital One Secured credit card to become unsecured? The Capital One Platinum Secured Credit Card takes up to 18 months of good standing credit use.

If you make your payments on time every month, your credit score will improve, and you can only have automatic approval based on this or you can request the product change from Capital One. 5.

How do I get my deposit back from the Capital One Platinum Secured? You can get your deposit back from the Capital One Platinum Secured credit card by closing your account or upgrading to an unsecured card.

If you upgraded to an unsecured credit card, you’ll get your deposit back after the upgrade on a day or two. 6.

Does the Capital One Platinum Secured raise your credit score? Yes, the Capital One Platinum Secured Credit Card can raise your credit score if you make timely payments, balance amount around 30% or less of your credit limit, and use your credit card regularly.

Building a payment history, positive credit utilization, longer credit history, and average age of the credit account affect your credit score significantly.

Takeaway

The Capital One Platinum Secured Credit Card is a valuable tool for people who need to build their credit score or improve a low score. There are drawbacks to the card, such as no rewards program, high APR, and the necessity of a security deposit, but there are also several benefits, including personalized payments, credit monitoring, and travel coverages.

Understanding these positives and negatives is key to deciding if the Capital One Platinum Secured Credit Card is right for you.

5) Other cards to consider

If you’re considering a secured credit card but unsure if the Capital One Platinum Secured Credit Card is right for you, there are other alternatives to consider. Here are two other secured credit cards to consider:

1.

The OpenSky Secured Visa Credit Card

The OpenSky Secured Visa Credit Card is another secured credit card to consider. With a refundable security deposit starting from $200, you can access a credit limit up to your deposit amount.

The APR is 17.39%, much lower than the Capital One Platinum Secured Credit Card. While there’s an annual fee of $35, it’s much lower than some other secured credit cards, and that makes it stand out.

It also doesn’t require a credit check, making it easy for anyone to apply, approve, and start building their credit score. One of its unique features is the flexible payment dates.

You can choose your payment date that works best with your salary schedule, meaning you won’t miss payments. Another significant benefit of this card is that it reports to all three credit bureaus, which can help to build your credit score quickly.

2. The Citi Secured Mastercard

The Citi Secured Mastercard is a secured credit card by Citi Bank, and it can be an excellent alternative.

The card doesn’t require a Credit Check and offers some exciting benefits. The refundable security deposit starts from $200, and the credit limit is up to the deposit amount.

One significant advantage of this card is that it provides free access to your FICO credit score. This score allows you to track your credit-building progress closely.

The card also provides identity theft protection and fraud liability to protect your account in case of fraudulent activities. The APR is high at 22.49%, but the card offers a variable rate before applying.

It is a valuable feature to keep in mind, and you can manage your balance and avoid high-interest charges. You can also set up automated payments and flexible payment dates for convenience.

Takeaway

Building a credit score requires time, discipline, and patience. A secured credit card is an excellent tool that can help you on your journey to improving your credit score, but you have to choose the right one.

Some secured credit cards have distinct features unique to them, and others have limitations to consider. The OpenSky Secured Visa Credit Card and Citi Secured Mastercard are excellent secured credit card options that you can compare to the Capital One Platinum Secured Credit Card.

Review each feature, rewards, interest rate, and fees carefully to choose the card that best fits your financial needs. Whatever credit card you choose, make sure that you use it responsibly, make monthly payments, keep a low balance, and check your credit score regularly to monitor your progress.

In conclusion, a secured credit card is an outstanding tool for building or repairing credit scores. The Capital One Platinum Secured Credit Card is an excellent choice for people who need to build or improve their credit score.

Its benefits include no annual fee, no foreign transaction fees, personalized payments, travel coverages, credit report alerts, and $0 fraud liability. Nevertheless, it has drawbacks such as a high APR, no rewards program, and a security deposit requirement.

Additionally, the OpenSky Secured Visa Credit Card and Citi Secured Mastercard are excellent alternatives to consider. Whichever card you choose, remember to use it responsibly, and make timely payments and keep a low balance.

A secured credit card can improve your financial health, and building a good credit score requires time, discipline, and patience.

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