Capital One Secured Mastercard Review
It’s not easy to launch a new business if you have no credit history or if your credit score is in the tank. Getting your business off the ground presents extra challenges when you don’t have a solid credit history. You need to build your credit to attract serious funding and grow your business, but how are you going to start building your credit if you don’t qualify for a business credit card?
One way to do this is to get a secured credit card. With most secured credit cards, you make a security deposit and then you can borrow up to the total amount of your initial deposit. You’re essentially borrowing money from yourself. The Captial One Secured Mastercard isn’t your typical secured credit card, though.
If you qualify for the Capital One Secured Mastercard, you get a $200 credit line after making either a $49, $99, or $200 refundable deposit; the amount of your required security deposit is based on your creditworthiness. If your credit isn’t terrible, you’ll be able to borrow more than your security deposit, which is a better deal than that provided by most secured credit cards!
With no rewards to earn with your spending and no business card perks such as free employee cards (this a personal credit card, after all), the Capital One Secured Mastercard isn’t the ideal credit card to use for business spending. The card’s main draw is that not only can you qualify for this card with poor credit, but with responsible use, this card can improve your credit so you can qualify for a swankier business card. Capital One will report your activity to the three main credit bureaus (the holy credit trinity of Equifax, Experian, and TransUnion), so you can boost your credit score just by making your payments on time.
Read our Capital One Secured Mastercard review and see whether the card makes sense as a credit-building strategy for you and your business.
Table of Contents
Capital One Secured Mastercard At A Glance
Secured Mastercard From Capital One
Business applicants can have poor credit and still get approved for the Capital One Secured Mastercard.
Need to find out your credit score? Visit our favorite free credit-checking sites!
Rewards & Fees
This is a humble, salt-of-the-earth credit card. There are no reward points to earn with your spending and no cash back to accumulate. As Calvin’s dad (from Calvin & Hobbes) would have said if he had been a reviewer of secured credit cards: Building credit is its own reward!
On the fee side, the Capital One Secured Mastercard is quite reasonable. There’s no annual fee to pay and no foreign transaction fees to worry about. The card does carry a high variable APR of 26.99% (and there is no 0% intro APR period), but this can be mitigated by paying off your balance in full each month.
Like I said, one nice thing about the required security deposit is that most cardholders will be able to make a security deposit smaller than their initial $200 credit line. Another nice thing about the security deposit is that you don’t even have to pay it all at once. You can pay it in installments so long as you pay the whole thing within 80 days.
What’s more, your initial credit line might be $200, but if you make your first five monthly payments on time, you can get a higher credit line.
There are no rewards to redeem with this card.
One cool feature of the Capital One Secured Mastercard is that you can get virtual card numbers to pay for online purchases. It’s a security feature that lets you keep your actual card number concealed from evildoers and other assorted no-goodniks. Beyond that, you get a fairly standard list of credit card benefits:
- Optional AutoPay
- Instant purchase notifications
- Account alerts
- Security alerts
- Card Lock
- Fraud coverage
- Capital One Mobile app
- 24-Hour Travel Assistance Services
- Auto Rental Collision Damage Waiver
- Travel accident insurance
- Extended warranty
Capital One Secured Mastercard VS Discover It Secured
Do you like the idea of a secured credit card but hate the idea of not earning any rewards? Consider the Discover it Secured card. This card will let you earn 2% cash back at gas stations and restaurants up to the first $1,000 spent each quarter while earning an unlimited 1% cash back on all other purchases. Pretty impressive for a secured card!
Discover it Secured
However, the Discover it Secured card doesn’t allow for the same kind of flexibility with the security deposit as does the Capital One Secured Mastercard. With the Discover it Secured, you pay a deposit of at least $200 which forms the basis of your credit line, and you can never borrow more than what you have deposited.
Check out our review of the Discover it Secured card if you’re curious.
As we’ve established, the Capital One Secured Mastercard isn’t the card to get if you’re looking to maximize the rewards you get for your spending. This is the card you get when you don’t qualify for fancier cards, but you’d like to build up your credit, so you do qualify for those cards in the future.
If you have great credit, you have no need for a card like this. But by using this card to fund your business, not only can you build your credit (thereby setting yourself up for a wider range of financing options), but you’re given greater flexibility with the security deposit and the credit line than you get with other — typically more rigid — secured credit cards.
Want more guidance in your quest for credit? Check out these articles!
To learn more about how we score our reviews, see our Business Credit Card Rating Criteria.