Capital One Secured MasterCard: Good Choice for Bad Credit

The Capital One Secured MasterCard is a good choice if you’re looking to boost your credit score. It has no hidden charges and a low annual fee of $29, which we like, but the APR is a bit high at 22.90%. Nevertheless, it’s one of the better secured credit cards out there. Besides being fairly straightforward, the Capital One Secured card has a few other perks worth considering. It has a low security deposit, flexible payment options, and a line of credit that grows with you.

Flexible security deposit with room to grow

Like all secured credit cards, the Capital One Secured card requires a refundable security deposit up front (hence the name). However, the Capital One card determines your amount based on your credit score, so it might be $49, $99 or $200, all of which are reasonable. You’ll start with a credit line of $200, but you can increase this up to a maximum of $3000 by providing additional security deposits. Best of all, if you can’t pay your security deposit up front, Capital One will let you pay it in pieces, as long as you’ve paid off the full amount 80 days after your approval. This is an especially great benefit for those on a fixed income.

Capital One® Secured MasterCard®
	Get the credit you need with no application or processing fees Automatic reporting to the 3 major credit bureaus Track credit with access to your credit score and other tools Your refundable security deposit can get you a line up to $3,000 You may qualify for credit line increases with no further security deposit required Use it like any MasterCard credit card, accepted at millions of locations worldwide		Pros Qualify w/ average credit No foreign transaction fee Cons Has annual fee No rewards High APR

Higher-than-average APR isn’t necessarily bad

If you’re approved for the Capital One Secured MasterCard, keep in mind that the 22.90% APR will apply right away; there’s no introductory period. However, most credit cards for bad credit don’t offer a low APR introductory period anyway. Furthermore, a lower APR doesn’t guarantee you’ll pay less in the long run. The secured Orchard Bank credit card has a much lower APR of 7.9%, but it also has a higher ongoing annual fee of $35 a year. The low APR would help make the Orchard Bank card more competitive, but not necessarily a better deal if you make all your payments on time (which, incidentally, helps to rebuild your credit). If you’re doing that, the APR isn’t going to matter too much anyway.

Consider your options

If you have no or bad credit, your choices are already limited, and you may have to wait and see what you qualify for. If you’re trying to rebuild bad credit, the Orchard Bank card is generally the easiest to qualify for, and it’s got a good reputation. Using any secured credit card responsibly will help you build your credit score and allow you to graduate to a card with lower fees or rewards. Here’s a chart explaining the difference between a regular credit card, a secured one, and a prepaid debit card: