Capital One Secured Mastercard Review

Full Review of Capital One Secured Mastercard

Pros Explained

• Credit Limit Can Be Larger Than Your Security Deposit: As a rule, secured cards offer an initial credit line that’s only as big as the security deposit you put down before you get the card. That might be the case for some people who receive the Capital One Secured Mastercard, too; they’ll need a $200 deposit in order to be granted the card's $200 initial credit limit. Other applicants with better qualifications, though, may only need to put down $49 or $99 to receive the same credit line.      
• Security Deposit Can be Paid in Installments: For those on limited incomes—which describes many, if not most, people who receive secured credit cards—it can be a financial stretch to amass the deposit required to get a secured credit card. The Capital One Secured Mastercard allows you to pay that deposit in installments. Each payment must be at least $20, in a whole dollar denomination, and you need to have reached the entire deposit amount no more than 35 days after being approved for the card.
• No Annual or Foreign-Transaction Fees: You pay nothing to get this card, other than a refundable security deposit. That’s not uncommon for a secured card. Still, it's welcome nonetheless, since it allows you to apply all available funds when getting the card to your security deposit, which in turn maximizes your credit limit. More unusual is this card's absence of a fee on foreign transactions, which many cards—both unsecured and secured—levy a charge of 2.7% or 3% on purchases you make when abroad or from foreign online sellers.

Cons Explained

• Requires a Bank Account: Opening a bank account can be challenging for those who are still building credit, perhaps because they are new to living in the United States. In other words, the kind of people who may turn to a secured credit card in order to build that very financial track record. Acknowledging that some people are "unbanked," select secured cards allow you to leave a security deposit or pay bills through such options as money orders and cash payments made at major retail chains. The Capital One Mastercard is not among those cards; payments must be made from a bank account. 
• Relatively Low Initial Credit Limit: While the requirements to receive the Capital One Secured Mastercard are relatively low, so is the credit limit you can receive from the card, at least initially. When you first get the card, you can boost the initial $200 limit by up to $800, provided you deposit an amount equal to the additional credit you want. But an initial credit limit of even $1,000 still falls short of the $2,500 or even $5,000 allowed by some other secured credit cards. You do, however, need to pony up a deposit that’s equal to those sums in order to secure the high credit limit. That said, this card has an unusually rapid process for increasing the credit limit. Capital One says your limit will rise after you make five on-time payments, which could be made within six months or so.  
• No Bonus Offers or Rewards Program: This is strictly a card for receiving credit and building your credit score, not one for earning rewards or introductory perks. Many other secured cards are similarly lean on extras, but there are exceptions. Some secured cards offer cash back rewards, even with a rewards match at the end of your first year. Certain secured cards also allow a balance to be transferred from another card and carried on the secured card at a lower APR, at least for a period—a useful feature for those who have a secured card in order to rebuild credit, and continue to carry debt from other credit cards. The Capital One Secured Mastercard allows balance transfers. While it levies no fee for transfers, it charges its regular 26.49% variable APR on the transferred sum. That rate likely isn't much lower, if at all, than what you're currently paying on another card.  

The Capital One Secured Mastercard is ideal for those who might struggle, or fail in meeting, the typical deposit requirements to get a secured credit card. 

Unlike most other secured cards, you needn't necessarily leave the full value of your credit line in the account as a security deposit; a deposit as low as $49 could get you the starting credit line of $200. And it’s ideal for those who may need time to come up with the needed deposit, since it allows you to make payments of $20 or more to build towards the total.  

It's among a number of secured cards that have no annual fee, too. And those that are well-suited to international travel. Not only is Mastercard more widely accepted abroad than some other card brands, the Capital One Secured Mastercard has no foreign-transaction fee, which makes it a valuable card to have for a trip abroad. Many other cards impose fees of 2.7% or 3% on such transactions, and those charges can really add up over the course of a vacation.

Capital One Secured Card's Outstanding Benefits

• No foreign transaction fees

Standard Benefits

• Travel Accident Insurance
• Secondary car rental insurance
• 24-hour travel assistance services
• Extended warranty

Cardholder Experience

Capital One received a rating of 807 in J.D. Power's 2019 customer satisfaction survey, ranking third on the list, in a tie with Chase but well behind Discover and Amex—which were closely ranked in the first and second places, respectively.

Capital One has two tools to help its cardholders save money when shopping. Its Wikibuy tool scans merchants to help you find the best price before you buy online, while Paribus finds potential savings on online purchases you've already made and gets you money back.

Cardholders can log into their account on the company's website or mobile app to pay their bill or for information and inquiries about their card.

Customer service is available at 800-227-4825 or through physical mail. Unlike most card issuers, Capital One offers no customer service via email or online chat.

Security Features

Capital One offers the typical security perks to keep cardholders safe, starting with security alerts. The issuer will send notifications by text, email, or phone—whatever your preference—if it notices suspicious activity on your card. Other standard perks include $0 fraud liability and the ability to lock your card if it is lost, stolen, or misplaced—and from the mobile app, a mode that isn’t offered by all issuers. 

Capital One also offers Eno, a tool that monitors for duplicate charges, tracks spending, and automatically sends 24/7 fraud alerts. The tool also instantly creates virtual numbers for online shopping.

CreditWise monitors your credit information on the dark web and sends automatic alerts if your email address or Social Security Number are found. The tool also provides information about your credit score and sends an alert when your credit report changes.

 As with most cards, you get a free FICO score monthly, drawing on reports from multiple credit bureaus. Not all secured cards seek such widespread reports.

If you lose your card, Capital One will replace it for free with standard delivery taking a few days.

Our Verdict

The Capital One Secured Mastercard has no frills, rewards, or special perks. Instead, it’s a basic secured card that, while not guaranteeing approval, aims to make acquiring and expanding credit easier for those who are building or repairing their credit record. 

Requiring an initial security deposit as low as $49 to earn a credit limit of four times as much, it departs from the customary demand of secured credit cards that you deposit the full amount you want as a starting credit limit. And it raises your limit after an unusually short period of time; just five billing periods, provided you’ve made an on-time payment for each of them.

Still, the card restricts you initially to no more than a $1,000 credit limit, no matter how much you deposit upfront. There might be better choices, then—secured cards that allow limits of $2,500, $3,000 or even $5,000—if you have more cash on hand for a deposit and want to immediately use your card for more (or more expensive) purchases. (A higher credit limit can also benefit you if you spend only modestly, since your credit score is based in part of what’s known as credit utilization. The less of your limit you use, the lower the utilization, and the bigger the boost to your credit score.)Those other cards, some even lacking an annual fee like the Capital One Secured Mastercard, may also earn you rewards in the form of cash back on your purchases. For instance, the Discover it Secured card has no annual fee and allows you to deposit up to $2,500 to get a credit limit of the same size. It also has fairly generous cash back rewards that are even matched at the end of your first year with the card.

That said, the Capital One Secured Mastercard is a better international travel card than the Discover It Secured. While both cards do not charge a foreign-transaction fee, Mastercard is more widely accepted outside the U.S. than is Discover, or American Express for that matter.