Credit One Visa for Rebuilding Credit Review

Full Review of Credit One Visa for Rebuilding Credit

Pros Explained

• Credit access without a security deposit: Most credit cards designed for people with poor credit or no credit are secured, meaning they require you to put down a security deposit on the card. The Credit One Visa for Rebuilding Credit is unsecured, so there’s no need for a deposit. You also get access to a revolving line of credit. The minimum credit line you can receive is $300. 
• 1% cash back on select purchases: With the Credit One Visa for Rebuilding Credit, you’ll receive 1% cash back on eligible purchases of gas, groceries, mobile phone service, Internet service, and cable and satellite TV services. A 1% rewards rate is relatively low for a rewards credit card. However, credit cards designed for people with poor credit often have no rewards at all, so being able to earn some cash back on select purchases is a decent perk.
• Periodic reviews of credit line: Credit One will periodically review your account and payment history. If you’ve been using your account responsibly and making all of your payments on time, you could automatically qualify for an increase to your credit limit. Having a larger credit limit gives you more spending power. And, when you have a higher limit, you may find it easier to maintain a lower ratio of credit utilization, assuming your average card spending level doesn’t increase.

Your credit utilization—or how much of your available credit you use—accounts for 30% of your credit score. With a lower credit utilization (along with responsible card use and other favorable credit behavior), you can potentially boost your credit score over time and possibly qualify for other credit cards or loans.  

Cons Explained

• Annual fee: The Credit One Visa for Rebuilding Credit card does have an annual fee, as do most unsecured credit building cards. The fee is $75 the first year and $99 after that and is charged against your credit line. A similar card, the AvantCard, has a maximum fee of $59, so this card’s $99 maximum is relatively high. 
• The credit limit may be low: This card’s minimum initial credit line of $300 is roughly in line with the minimum credit line options with other secured cards, but some cards offer higher maximum lines—provided, of course, you are willing and able to qualify for a higher limit with a deposit of an equal amount with a secured card. Credit One says it will review your credit line from time to time, and may raise it. Still, if you have more than $300 for a security deposit, a secured card will provide the ability to charge more to a card, at least initially, than will the Credit One Visa for Rebuilding Credit. 
• Issues with customer service: Credit One’s customer service for this card is not up to the norm for the credit-card industry in several respects. Human 24/7 phone support is available only for lost or stolen cards, where most issuers provide it continuously. Unlike most other issuers, Credit One does not offer online chat. But evidently, the company worked on its customer service. In 2020, Credit One was last out of 11 national card issuers in the J.D. Power U.S. Credit Card Satisfaction Study. But they jumped to third in the 2021 poll.

The Credit One Visa for Rebuilding Credit aims to appeal to people with poor credit or no credit at all who want a credit card without the need to put down money to do so. According to Equifax, poor credit is a score under 600. FICO tells us that 18.9% of Americans have a score below 600. Unlike secured cards aimed at credit-deficient consumers, the Credit One Visa for Rebuilding Credit offers access to a revolving line of credit without a security deposit. 

It’s also a card for those willing to pay an annual fee, although it may be $0 for some applicants. However, it could be offset by 1% cash-back rewards on some categories of everyday spending. 

Rewards Earning Details

With the Credit One Visa for Rebuilding Credit, you’ll earn 1% cash back on gas, groceries, mobile phone service, internet service, and cable and satellite TV services.

Rewards Redemption Details

You’ll automatically receive your cash-back rewards in the form of a statement credit. Unlike some other credit cards, you don’t have any other redemption options. You can’t use your rewards for gift cards, merchandise, travel arrangements, or charitable donations. 

How to Maximize Your Rewards

To get the most value from the card, use it for your routine purchases of gas, groceries, and other eligible services to earn 1% cash back and avoid carrying any balances forward each month, since the interest incurred would more than offset the value of any earned rewards.

To show you how your rewards can add up, let’s consider some typical spending habits:

• Fuel: According to the Bureau of Labor Statistics, the average vehicle owner will spend $1,568 per year on gas and oil for their car.
• Groceries: The Bureau of Labor Statistics reported that the average person spends $4,492 per year on groceries consumed at home.
• Cell service: In a recent study, the Tax Foundation found that the average cell phone bill is $35.31 per month, or $423.72 per year.

If you spent the average amount in each of these three categories, you’d spend $6,483.72. If you used your Credit One Visa for Rebuilding Credit to pay for all of these bills, you’d earn 1% cash back on the total spent, giving you $64.83 in rewards. However, keep in mind this type of rewards scenario would require a credit limit of around $575 to achieve this average level of spending in the three categories listed. Cardholders with lower credit limits would logically earn less.

Standard Benefits

The Credit One Visa for Rebuilding Credit offers a few benefits that are standard for basic credit cards, including: 

• Free online access to your Experian credit report
• Zero fraud liability

Cardholder Experience

Credit One improved its ranking in terms of customer service. In the 2020 J.D. Power U.S. Credit Card Satisfaction Study, Credit One was ranked last out of 11 national card issuers in customer satisfaction. Its score of 739 was well below the average, but it improved to the third spot in the 2021 poll.

Its general customer support line is only staffed during select hours. However, if your card is lost or stolen, you can get help 24 hours a day, seven days a week by calling 1-877-825-3242. There are no chat or email options for customer service.

Security Features

This card has a few features that are standard for credit cards, such as fraud alerts and zero fraud liability.

Fees to Watch out For

If you’re thinking of applying for this card, there are four fees (in addition to a possible annual fee charge) that you should be aware of first. Neither is unusual for the industry, but a first-time credit-card owner might be unfamiliar with them:

• Foreign transaction fees: If you use the card when traveling outside of the United States, you’ll pay a fee of $1 or 3% of each transaction, whichever is greater. 
• Cash advance fees: If you take out a cash advance, the cash advance fee is $5 or 8% of the amount, whichever is greater. If you took out a $100 cash advance, that means you’d pay $8 in fees. You could also have $10 or 3% or a third possibility of $10 or 5%. It is not stated how they choose what fee you get.
• Authorized user fees: If you want to add an authorized user to the account, such as your spouse or child, you’ll have to pay a $19 annual fee. The fee will also reduce the amount of your available credit. 
• Late payment fees: If you’re late paying your minimum monthly payment, you’ll be charged up to $39 in late fees.

Our Verdict

If you have poor credit or no credit history, the Credit One Visa for Rebuilding Credit can give you access to an unsecured line of credit and the ability to earn rewards on your purchases. The card resembles AvantCard, another unsecured card with a lower maximum annual fee ($59, compared with $99 for this card) but offers no rewards, which could potentially justify that gap in annual fee expense.

If you want to avoid fees, consider the Discover it Secured card. While it does require a security deposit, it doesn’t charge an annual fee. And, cardholders will receive 2% cash back on up to $1,000 in purchases at gas stations and restaurants each quarter and 1% cash back on all other purchases. There’s also the Petal Visa card, which has no annual fee or fees for late payment, foreign transactions, or to add authorized users.

Another option is the Green Dot Primor Visa Gold Secured card. There’s a $49 annual fee, but the APR is a low 9.99% fixed, much lower than the norm for cards for people with poor or no credit.