Is the Capital One Platinum Secured worth it?

Secured credit cards can give you the chance to build up your credit score when you can’t find a better alternative. These cards let you secure your own line of credit with a cash deposit, and they’ll report your credit balances and payments to the three credit bureaus. Over time, this reporting can help you build your credit scores with Experian, Equifax and TransUnion.

There are many popular secured cards to choose from, including the Capital One Platinum Secured Credit Card. But, when it comes down to it, is the Capital One Platinum Secured really worth it? This overview will explain the pros and cons of this card, who it’s best for and other details you should consider as you make your decision.

When is the Capital One Platinum Secured worth it?

You want to put down a small security deposit

It’s important to know about some of the major benefits of the Capital One Platinum Secured Credit Card. One upside is the fact that, unlike other secured cards that require higher security deposits, this card lets you begin building credit with a minimum security deposit as low as $49 if you qualify. With this deposit, your initial credit line will be at least $200. Although this is relatively low for a secured credit card, it’ll be enough to help you build your credit.

Usually, the amount you put down for a security deposit serves as your credit limit. So, with other secured cards, a starting limit of $200 would typically require putting down $200 as a deposit.

You need to build your credit

This card gives you the chance to build credit with responsible use, which includes making on-time payments. However, to improve your credit score, remember that you’ll also need to keep your credit utilization ratio — which is the amount of credit you’re using in relation to the amount of credit you have access to — below 30 percent. So, for a card with a $200 credit limit, you’ll want to keep your credit utilization at or below $60.

You want to increase your credit limit over time

You can qualify for automatic credit line reviews in as little as 6 months. During these reviews, Capital One will consider increasing your credit limit. If you come into more cash before then, you can increase your security deposit (up to $1,000) to raise your credit limit. In this case, your new credit limit will equal your security deposit. So, if you put down $1,000, you’ll have a limit of $1,000. You can then use up to $300 of your credit line and still keep your credit utilization at the desired 30 percent or less.

You don’t want to pay an annual fee

The Capital One Platinum Secured Credit Card doesn’t charge an annual fee. This is a nice perk considering that other secured credit cards occasionally charge annual fees.

You want to upgrade to an unsecured card over time

You can eventually get your security deposit back and upgrade to an unsecured card. In fact, this issuer says you can eventually upgrade to an unsecured card like the Capital One Platinum Credit Card, which is for consumers with at least fair credit. This card also comes with no annual fee, and since it’s an unsecured card, it’ll help you to build your credit without putting down a security deposit.

You want to get preapproved

Best of all, the Capital One Platinum Secured Credit Card lets potential customers get preapproved online without a hard inquiry on their credit reports. This is just another reason this card is perfect for people who need the chance to build credit but want to make the process as seamless as possible.

When is the Capital One Platinum Secured not worth it?

You want to earn rewards

While this card offers a potentially lower minimum security deposit than other comparable cards, there’s one major downside. The Capital One Platinum Secured Credit Card does not offer any rewards on your spending, whereas some other secured cards do.

For example, some secured cards that offer rewards include the Discover it® Secured Credit Card and the Bank of America® Unlimited Cash Rewards Secured credit card*. Neither of these cards charges an annual fee and you’ll get to earn cash back on all purchases.

For instance, the Bank of America Unlimited Cash Rewards Secured lets customers earn a flat 1.5 percent cash back on all their purchases. Meanwhile, the Discover it® Secured Credit Card offers:

• 2 percent cash back at gas stations and restaurants (on up to $1,000 in combined purchases each quarter, then 1 percent back)
• 1 percent back on all other purchases

Discover even offers a welcome bonus for new cardholders — which is rare with secured cards — that doubles all of the cash back cardholders earn at the end of their first year.

You plan to carry a balance

Another downside of the Capital One Platinum Secured is its high variable APR, which currently comes in at 29.99 percent. If you plan to carry a balance on this card, this sky-high APR can cause you to pay considerably more for everything you purchase.

In comparison, the Bank of America Unlimited Cash Rewards Secured includes a variable APR of 29.24 percent and the Discover it® Secured Credit Card has a variable APR of 28.24 percent.

Should you get the Capital One Platinum Secured?

Consider getting the Capital One Platinum Secured Credit Card if you want the lowest minimum security deposit you can find and if you don’t care about rewards. This card can also be a good option if you plan to pay your balance in full each month.

If you want rewards or a lower APR, you should look at secured credit cards from other issuers. There are plenty of credit cards for bad credit or no credit history to consider, so wait to apply until you’ve had time to compare several options.

The bottom line

While the Capital One Platinum Secured Credit Card may not seem like the best card out there, it can be a valuable tool to build credit when you can’t get approved for an unsecured credit card. The fact that the Capital One Platinum Secured lets you put down as little as $49 as a deposit is another major plus, especially if you’re short on cash. And remember, this security deposit is fully refundable when you close or upgrade your Capital One account in good standing.

With some patience and responsible credit use, you can use this card (or another secured credit card) to improve your credit score over time.

*The information about the Bank of America® Unlimited Cash Rewards Secured credit card has been collected independently by Bankrate. The card details have not been reviewed or approved by the issuer.

The Bank of America content in this post was last updated on September 9, 2024.