Related Article: The Best Secured Credit Cards (2015)
The following timeline documents my experience with the Capital One Secured Credit Card between 2011 and 2013. If you want to know why I chose this card, please read: “Repairing my Credit with a Secured Credit Card“. I decided to keep an online diary and record my progress so I could get feedback from people using this card, as well as to help others who are experiencing credit problems and are thinking about applying for a secured card.
I am not a credit expert and I do not work for Capital One. This is my personal experience dealing with Capital One and a description of how I used their secured card to improve my credit. If used responsibly, you should be able to establish or re-establish your credit with pretty much any secured card. The key is, ALWAYS pay on time and never go over your limit. Basically, you need to use your credit card responsibly and have a little bit of patience as building credit history takes time. I also recommend you look for cards that do not charge high monthly or annual fees. I have compiled a list of great secured credit cards to build or rebuild credit.
This is a long article, as I mentioned, it documents more than two years of activity with the Capital One Secured Credit Card. Feel free to read the whole thing or just jump to the end and read my final thoughts and overall review. This topic has also generated a large number of comments and questions, so I created a forum section to discuss more about this card and other related topics (like how to improve your scores, removing collections from your reports, other secured credit cards, getting approved for prime cards, etc.). A lot of people have joined and have posted their own timelines and experiences. I will be happy to answer any questions you might have over there. Anybody is welcome to join!.
My Experience with Capital One’s Secured Credit Card
- Starting Credit Score: 568 (Experian)
- Last Credit Score: 711 (Equifax FICO)
- Always pay on time
- Keep credit card balance below 30%
- Take care of negative items on credit report
- Increase my credit limit
- January 9: Applied online and got approved for the Capital One Secured Master Card. Sent my online deposit of $49 plus $150 to raise my credit line from $200 to $350 (please read the security deposit section below for more info).
- January 14: Received a confirmation letter in the mail from Capital One that my application was approved and that I should receive my new card in 7-10 business days.
- January 25: Received an email from Capital One with subject: “we’ve shipped your new card”. The email said: “Your new credit card was mailed yesterday, and you should receive it within 7 business days. Thanks for being a Capital One customer.”
- January 27: Received credit card with a $351 credit line (I was initially approved for a $200 credit line with a $49 deposit, but added $150 to increase it). Enrolled in online banking after completing card activation ($29 annual fee showed as a transaction on my account). Made first purchase without trouble.
- January 30: Called to enroll in CreditInform (owned by Capital One). Was told I should receive a package within 5 to 7 business days including my user and login information. It took less than 5 minutes and operator was friendly and efficient. (CreditInform is no longer offered with this card, they now offer a similar service called “Credit Tracker”
- February 14-17: Received the CreditInform handbook containing my credit report and credit score, as well as my login information to register online. Credit score shown is 619, which is already an improvement over the 568 I had seen on my last report a few months ago. Registered at www.mycreditinform.com (offered free of charge with Capital One’s secured credit card).
- March 4: Paid first statement balance in full. Online payment took 2 days to get posted on my account and it was easy to set up (purchases seem to take a few days to appear online).
- May 12: CreditInform update. My score dropped 10 points (from 619 to 609). Not great news, but I’m still positive that my next report will show an improvement. I think it’s too soon to see any major changes on it as I’ve only had the card for less than 4 months (please read July 29 post for an update on this).
- July 11: My credit score on my monthly report at CreditInform went from 609 in june to 639 in July.
- July 29 : Realized that credit scores provided by mycreditinform.com are what they call “FAKO” scores, which are not real credit score. Most creditors or lenders will look at a FICO score and not a FAKO. I’ve been comparing my Experian score, which is one of the “Big Three” major credit reporting agencies, with my CreditInform score for two months, and they differ substantially. While my credit score with CreditInform has been improving and it’s now a 639, my Experian credit score is 588, only 20 points more than my starting score almost six months ago (568). For this reason I’ll stick to posting scores provided by either Experian, Equifax or TransUnion.
- August 18: First credit line increase! Received an email from Capital One saying:
“Sometimes being a responsible customer pays off—like right now! We’ve increased your credit line by $100. This increase is unsecured and provided automatically, so you don’t need to send an additional deposit to cover it”
Not a big increase, but a confirmation that I’m heading in the right direction. My new credit line: $450.
- September 5: Added a forum section to this site so people can post their reviews and timelines. Everyone is welcome to join!
- September 9: Checked my Experian credit report. My score hasn’t improved in months (still in the 580’s) and I’m starting to realize that a single secured credit card with a $450 credit limit is not going to be enough to get me out of this hole. I need to take care of all the negative items on my credit reports if I want to see real improvement. Negative items include: 2 accounts in collections (unpaid medical bills), 1 “Paid Charge-Off” (case closed), 2 closed cards that were past due more than 60 days (1 credit, 1 store card). I’m currently in the process of removing the 2 collections. Will open a second secured card soon (considering Citi, Orchard Bank or Bank of America secured cards). I’m curious to see the impact these changes will have on my report in a couple of months.
- September 15-27: Made an additional $50 deposit to increase credit limit to $500. Deposit was posted on my account about 10-12 days later and I received a letter on the mail confirming my limit increase.
- November 2: Credit score went from 579 to 636 after paying off the two collection accounts on my credit report (a 57 point jump!). I had been stuck on the same score for months, so I’ve been working on cleaning up my report and it’s paying off.
- November 3: Opened a secured credit card with Bank of America with a 4k credit limit. I applied for this card at the bank not online. They offered me the BankAmericard Cash Rewards Secured Credit Card. I didn’t even know that a Secured Card with cash rewards existed. I’m hoping that a 2nd secured card with a larger limit will help boost my score and get things going a little faster.
- November 4: Not even 24 hours after opening the BOA secured card, it’s already showing on my report as “Current”. My score improved another 29 points for a total of 86 points in two days. My new Experian score is 665!
- January 18: I’m getting close to the 1 year mark with this card and received my 12th statement a few days ago. I’m still waiting for a second line increase but who knows if it will happen. I haven’t been using the Capital One card as much since I opened a cash rewards secured credit card with a larger limit.
- January 26: My Experian credit score increased by 11 points from 662 to 673 after a paid medical bill was removed from my report.
- February 15: Called Capital One after a year of having this account in good standing. I wanted to see if I qualified for a better card, a limit increase or an upgrade. An “account specialist” encouraged me to apply for an unsecured card with them but told me they could not increase my limit, upgrade or graduate my secured account. My only option was to apply for a new card and close the other one or leave it open if I wanted. I decided not to apply as I do not see the point of having two credit cards with the same bank, nor I want to close an account that’s already a year old as this will affect my credit.
- April 2: Emailed Capital One’s CEO and requested that my secured card be product changed to an unsecured card and my deposit refunded. About ten days later y received a letter stating this was not possible.
- April 19: Called to close my Capital One Secured card after having it for more than two years. This took about 5 minutes. The representative was helpful and didn’t try to convince me to keep the card or apply for a new one (which I thought was a good thing). He said my deposit will be refunded within two billing cycles, though I’ve heard it takes less than that. I’ll update as soon as I receive my refund. When I log in to my account online, I can see a message right below my account name saying “This account is currently closed”.
- April 26: Received my security deposit refund check today, just one week after closing my account. My account had a zero balance with no pending charges and I called one day before my statement cut, so I’m sure that helped.
- Final Status: This account is now closed. I had the Capital One Secured Card for more than two years. I always paid on time and never went over my credit limit. My credit line was increased once by $100 at around the 8 month mark but I did not receive any more credit line increases. After one year I called and asked for my account to be unsecured, but I was told I had to apply for a new card instead as they do not graduate accounts. After two years of having this card, I emailed a Capital One CEO and received basically the same response. Ten months after opening this secured account, I opened a 2nd secured card with Bank of America. At fourteen months I was approved for a car loan. Just before closing my Capital One account, I was approved for a Chase Freedom credit card. After opening the BOA card, my CapOne card didn’t get much use so I closed it in order to get my deposit back. My credit score improved more than 100 points since I started this whole process. Removing two delinquent accounts from my reports, getting a second secured card, paying on time, not going over my limit and letting my other credit accounts age, was key for improving my credit.
- In one sentence: A great card to establish credit but once you have done this you will move on to better cards. Capital One is a great option for those looking to establish or rebuild credit. Capital One will most likely approve you even when other banks will not (however a few people have complained about being declined for this card). It is a good starter card, but will not grow with you over time. This means that it will never graduate to an unsecured card. You will also have to close your account in order to get your security deposit back. Credit increases are rare and not generous. Once you have established some history with Capital One, you can apply for an unsecured card with them or different bank. This is a great card to rebuild or establish credit history, but once you are able to bring your scores up, you will most likely close your account and apply for better cards. This card would be even better if Capital One offered graduation and returned security deposits to people that prove to be responsible and serious about handling credit.
- Initial Security Deposit: $200. I was initially approved for a $200 credit card with a security deposit of $49. I sent an extra $150 to get a $350 credit line. After 6 months with the card I was given a credit line increase of $100 for a total of $450. I later sent an extra $50 for a $500 CL. A few months before closing my card I brought my credit line up to $3k. This was really helpful as other banks matched this credit line when I was approved for other cards.
If you are going to apply for this card and are thinking about making a big deposit, you need to be aware of Capital One’s refund policy. This is what the Customer Agreement document that I received states:
“I may not withdraw funds or request a refund of my funds at any time, other than by paying all of my obligations to Capital One and closing my account”
If you are in the market for a secured card that requires a small security deposit, then Capital One is a great option (you can’t beat $49, $99 or $200). If you are looking to put in a bigger deposit to get a higher credit line and would like to get your money back in a fixed number of months, then you should consider other secured cards. For example, Bank of America refunds your deposit after 12 months and Citi does it after 18 months.