Related Article: Capital One Secured Credit Card Review – Credit Diary Part II.
After 10 years of using credit irresponsibly, I have finally decided to do something about it. The two credit cards I had were closed about a year ago by the issuing banks, and I found myself in a position of not even being able to get an Old Navy credit card after that. Now that I’m married with kids, have graduated college and have a job, I have come to the realization that I’m in no position of getting a loan to buy a house. To make things worse, being self-employed makes qualifying for a loan even more difficult.
Ruining my credit was a combination of being a struggling college student, and not being well informed about the repercussions of mishandling a credit card (paying late, or not paying at all when I didn’t have the money). I decided to keep an online diary of my progress (or the lack of it), so it can be useful to other people in the same situation as well as getting some input from those who can give advice. So, if you are reading this and would like to post a comment, please do so. I am not a credit expert, nor I am interested in selling you anything, and I don’t work for any of the banks named here. I’m just a regular person with bad credit.
After doing some research, I decided to get a secured credit card to hopefully improve my credit score. I’m also trying to clean up my credit report as much as possible by taking care of the negative items on it (still a work-in-progress). To follow a timeline of my progress please read: “Credit Diary Part II“.
These were the three secured credit cards I considered:
I ended up applying for the Capital One Secured Master Card and I will tell you my reasons. Let me start by saying that I was not shopping for the best credit card in the traditional sense, but the best credit card that can get me out of the hole I am in as effectively as possible (hopefully!). Having said that, the different APR’s offered by these banks differ substantially, but are all the same to me. I’m really not interested in a low APR card as my plan is not to buy “things” with it, but to make small purchases and pay everything in full each month so I can improve my credit. Later on, when I have achieved this, I can shop for regular credit cards and will definitely consider the APR as a deciding factor.
The three cards mentioned should probably work well if used properly, but I had to choose one of them. The Wells Fargo card was the first to be erased from my list as it requires you to have a checking account with them or Wachovia, and I don’t nor I want another checking account, thank you (if you do have an account with them, it looks like a good card so check it out). The Orchard Bank card looks attractive, the $35 annual fee is waived the first year and there is a $200 Minimum Security Deposit, which seems reasonable (you do have to mail your application along with the deposit and I would have preferred doing everything online, ’cause it gets things moving faster). So I had to go with the Capital One Card, which though the $29 annual fee is not waived, you can qualify for a $200 limit with only a $49 refundable deposit. This is what their site says:
Credit Line: $200–$3,000. Minimum security deposit gets you a $200 line. Deposit more to increase your line.
I applied for the card online and got approved immediately:
You’re approved – almost done! Just make a $49 refundable deposit and your card will be on its way.
I understand that you can be approved and asked to pay more than $49, so I was happy with the deal. I then proceeded to make this minimum deposit plus $150 in order to get a $350 credit line (if $49 gets me a $200 credit line, adding $150 more will get me a $350 credit line, or so I think). Another positive thing about this credit card, they give you 80 days to make the deposit, and you can make the deposit in full or over time, as longs as you make it before the date given (they’ll give you a date range once you get approved). Also, they give you free enrollment in CreditInform, which supposedly lets you track your credit information (we’ll see about that, I’m sure there’s a catch, but I’ll report on this later). So, this was a no brainer for me.
- Automatic reporting to the 3 major credit bureaus
- Track your credit free enrollment in CreditInform
- Earn credit line increases. You may earn credit line increases based on your payment and credit history.
I have to say that I read lots of bad reviews about this card online and was a little nervous about the whole thing (most people complained about bad customer service and being charged extra fees?). I then spoke to a good friend who’s had a Capital One credit card for eleven years, and told me she has never had any issues with them. She always pays on time, so it makes me think that I should be ok if I manage my card in a responsible way, which I intend to do.
To check out the progress (or lack of it) I’ve had with the Capital One Secured Credit Card, please read: Capital One Secured Credit Card Review – Credit Diary Part II.