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Capital One Secured Mastercard Review: Start building your credit with security deposits as low as $49

Need to build better credit with a secured credit card? CNBC Select breaks down the rewards, benefits and fees associated with the Capital One Secured to help you decide if it's right for you.

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"It takes money to make money," is at times an unavoidable truth. It's especially true if you are a credit newcomer or you need to repair a bad credit score.

Luckily, the Capital One® Secured Mastercard provides an accessible option for improving your credit history, with required deposits as low as $49, depending on the conditions of your application.

Below, CNBC Select breaks down the rewards, benefits and fees associated with the Capital One Secured to help you decide if it's the right card for you.

Capital One Secured Mastercard review

  • How is the Capital One Secured different from other secured credit cards?
  • How to report your responsible credit use to credit bureaus
  • Additional benefits
  • Fees
  • Bottom line

Capital One® Secured Mastercard®

Capital One® Secured Mastercard®
Information about the Capital One® Secured Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the cards prior to publication.
  • Rewards

    This card doesn't offer cash back, points or miles

  • Welcome bonus

    No current offer

  • Annual fee

    $0

  • Intro APR

    N/A for purchases and balance transfers

  • Regular APR

    26.99% variable on purchases and balance transfers

  • Balance transfer fee

    None

  • Foreign transaction fee

    None

  • Credit needed

    No credit history

See our methodology, terms apply.

Pros

  • No annual fee
  • $49, $99 or $200 refundable deposit
  • Get access to a higher credit line after making your first five monthly payments on time
  • No fee charged on purchases made outside the U.S.
  • Flexibility to change your payment due date

Cons

  • High 26.99% variable APR
  • No rewards program
  • After you apply and submit your deposit, it takes 2-3 weeks to get your card
  • Capital One periodically reviews your account to see if you can be transitioned to an unsecured card, but unlike the Discover it® Secured Card there’s no clear timeline for when this will occur

How is the Capital One Secured different from other secured credit cards?

Traditionally, secured credit cards are for people who have no credit history or need to repair their credit score. The limits for secured credit cards are determined by the amount of money a cardholder puts down as a deposit. This is done to protect a lending institution when the consumer it's lending to has little history to prove they are a reliable borrower. The deposit is fully refundable given your balance is paid off when you close the account. Typically, secured credit card deposits range from $200 to $2,500.

The Capital One Secured card comes with a credit limit of $200, with options to increase once you prove to be a borrower who pays bills on time and spends within your means. But unlike other cards that require you to deposit the exact amount of your credit limit, with a Capital One Secured card there is some flexibility on how much a consumer has to put down in order to qualify for a $200 credit limit. According to Capital One's website, your deposit amount is determined by your application and could be either $49, $99 or $200 — and any of these will qualify you for an initial $200 credit limit.

As with most Capital One cards, after you make your first five consecutive payments on time, you may become eligible for an increased credit limit. For this reason, plus the possibility of only having to deposit $49, the Capital One Secured card is one of CNBC Select's picks for best credit cards for building credit.

Report your responsible credit use to credit bureaus

Unlike a prepaid or debit card, using a secured credit card affords you the opportunity to improve your credit score because your on-time payments will be reported to the three main credit bureaus — Equifax, Experian and TransUnion. This good behavior will show up on your credit report and help you become a stronger applicant for better credit cards with more exciting rewards.

Additional benefits

One of the most important factors in achieving a good credit score is making your payments on time. The Capital One Secured card makes it easy to do by giving you control over when your payments are due.

For example, if you get paid on the 15th of every month, you can set your due date to the 16th so that you can prepare to have the funds available.

There is also an option to set up personalized email and text reminders that alert you of upcoming payments.

Fees

Like all Capital One cards, the Capital One Secured credit card has no foreign transaction fees and there is also no annual fee.

The variable APR for the Capital One Secured card is 26.99% on purchases and balance transfers, making it important for you to pay off your balance in full each month.

Bottom line

The Capital One® Secured makes building better credit accessible, but you can't be in a rush. While you can apply for this card without any credit history, there is no clear timeline for when consumers will become eligible for an unsecured credit card.

There are no rewards or benefits that come with the Capital One Secured card, whereas other options, like the Discover it® Secured Card, deliver value that's comparable to popular cash back rewards cards. With the Discover it Secured Card, you can earn 2% cash back at gas stations and restaurants (up to $1,000 in combined purchases each quarter, then 1%); unlimited 1% cash back on all other purchases. There's also a clear timeline for when you can upgrade to an unsecured card: Discover automatically reviews your credit card account monthly, starting at eight months, to see if your security deposit can be returned.

But if you don't have $200 for a security deposit, the Capital One Secured card is one of the best secured credit cards because you can potentially qualify for a $200 limit with only a $49 deposit.

Our methodology

To determine which secured cards offer the best value for a range of consumers, CNBC Select analyzed popular secured credit cards offered by the biggest banks, financial companies and credit unions that allow anyone to join.

We compared each card on a range of features, including: annual fee, minimum security deposit, credit limit, rewards program, introductory and standard APR, welcome bonuses and foreign transaction fees, as well as factors such as required credit score and customer reviews when available. We also took into account how easy it is to upgrade the card from secured to unsecured and how quickly you can get your security deposit back.

Because it's unusual for secured credit cards to have robust rewards programs, we did not analyze how many rewards points you can earn in the first year. For cardholders who are looking to rebuild credit, it's more important to practice good credit card habits — spending within your means, paying your balance on time and in full — than try to optimize your points balance.

Information about the Discover cards and Capital One® Secured Mastercard® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the CNBC Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.