If you're working on building your credit history, the new Capital One Quicksilver Secured Rewards Card could be worth a look. It can help you build a credit history and eventually graduate to the unsecured version of the card. The card was launched on Oct. 19 and is available for new applications. However, applicants who currently have bad credit may not be eligible.
- Capital One has launched a new secured credit card that offers 1.5% cash back on every purchase.
- Unlike the Capital One Secured Mastercard, this one is designed for consumers with fair credit.
- With responsible card use, cardholders can graduate to the unsecured Quicksilver Rewards card and get their deposit back.
Capital One Adds Another Credit-Building Option
Building credit can take a while, but a credit card is often the best way to do it because as long as you pay your bill on time and in full every month, you can build credit without paying interest.
With the new Capital One Quicksilver Secured Rewards Credit Card, you can also earn 1.5% cash back as you work on establishing a positive credit history. There's no annual fee, and you'll need a security deposit of at least $200, which gives you a matching $200 credit limit. The maximum credit limit is $1,000 to $3,000, depending on your creditworthiness.
Based on your payment history with the card and your overall creditworthiness, you may be considered for an increased credit line without needing to put down an additional deposit.
Unlike other secured credit cards, though, this one is designed for people with fair or limited credit, but not bad credit. Capital One defines a borrower with fair credit as someone who has defaulted on a loan in the past five years or who has a limited credit history of three years or less.
This is the same criteria used for the Capital One QuicksilverOne Cash Rewards Credit Card. The difference is that the QuicksilverOne card doesn't require a security deposit, but it does charge a $39 annual fee. While you'll need to put up a security deposit on the Quicksilver Secured card, there's no annual fee, and you can get your deposit back if you use the card responsibly.
Is the Quicksilver Secured Card Right for You?
One of the drawbacks of many secured credit cards is that you have to close your account to get your deposit money back. But closing a credit card account can have a negative impact on your credit score, and it also prevents you from using that account to continue to build your credit history. The age of your accounts is one of the factors used in determining your credit score.
Fortunately, more and more card issuers are giving cardholders the opportunity to upgrade to an unsecured card and get their deposit back without needing to close the account. This new card is the latest such option.
Although there are plenty of unsecured credit cards for consumers with fair credit, some charge annual fees or don't offer rewards. While an upfront security deposit can be a pain, it could be worth it if you want a solid cash-back credit card once you've built up your credit history sufficiently, and you won't have to close your account or apply for a second credit card to make it happen.
That said, even a $200 security deposit can be too much for some, so be sure to consider whether it would be a burden for you.