"How To Use Capital One Secured - 1 Year Later"
Capital One® Secured MasterCard® Review
Written by: c59disc on 2012-12-16
Overall Satisfaction
Customer Service
Rewards
Account Management
Delivery Time
c59disc's review: 
CONS WITH THE CARD
I truly hate Cap1 customer service -- they are the most unfriendly people on the planet AND they don't listen. Everything is scripted over there ... You also have an alternative which is to email their customer service, and they are just as unhelpful and use their canned responses to my questions do not answer my questions so I often have to REPLY back via the email response and tell them ANSWER MY QUESTION or get me SUPERVISOR. Then they suddenly answer the question. It would be too lengthy to give examples, but a sub-prime cards do not seem to get quality customer customer service -- but they are a means to an end -- a PRIME level card where I get real customer service and real card benefits.
CONCERNS ABOUT SECURED VERSUS NON-SECURED
The difference for me between a "secured" card and a "non-secured" card in rebuilding credit is simply the assets required to open the account and the "cost" of financing that card. meaning, the secured card is $29 annual fee. if you pay off every month in full, there are no interest charges. The cons are the amount of deposit that you have place to increase your line of credit to what I call a "usable line of credit" may be out of the means of some people.
I started with a $200 line of credit with utilitzation means you can't spend anything over $60 a month or you blow your utilization which means your credit score tanks. For myself, I suffered for 6 months putting everything I could into the secured CD and I now have a $3000 line of credit and this means I can spend $900 a month without blowing the utilization or tanking my credit.
the summary of the argument of secured cards versus high-interest non-secured cards really depends on your situation, if you have the deposit money, the a secured card, in my opinion, is cheaper. if you don't then the higher interest non-secured cards may be the way. i just hate having to pay interest on everything that i purchase. that to me is counter productive.
The benefit to me having the secured card means I don't pay interest on the card ... I pay it weekly. This way I am never over the limit, never late, and I show Cap1 i can handle a $3,000 line of credit by spending $2000+ a month and paying it off every month. To me, I think that's the key is showing them before they give me the larger line or credit that you can handle. Example: you have a $500 CLI. deposit your payroll to your checking and/or savings. then go purchase the $450 on your Cap1 card, then pay the card account at the end of the week. Repeat this process 3 times but on the 4th week .... let everything post and use your debit card on the 4th weekly only. The reason is to skew FICO, an added formula is to make sure you pay the card down to less than 10% of the credit line at least 1 week before the statement is cut -- this means pay it during the grace period before they send you a bill. For myself, The last week of the month is where I make sure everything posts and the credit line is adjusted back to the maximum credit line minus (meaning utilization is 10% or less) and i use my debit card that week onlyl.
Example, last month, I charged $2551.98 to the card but i paid it down to $700 prior to the statement cutting. That means they report to credit bureaus that I have a $700 balance out of $3,000 line of credit which makes my utilization 23.33%.
MY CREDIT HISTORY
I had BK7 in 2010. I got the Cap1 Secured Card 12/2011. This month, 12/2012, things have changed. My story is that I suffered and saved and increased my line of credit to $3000 within 6 months of opening the card. I have acquired $450 unsecured credit during that the first 6 months and rest remains secured in the CD account. What that has gained me was approval to get a newer-used vehicle 50K miles then I got approved for a Dillards card $400 CLI, then I got approved for $2,000 with Best Buy (Cap1 now does the financing instead of HSBC which was more difficult), then I got approved Sams Club ($700 CLI) today ... all in a year. My focus with financing is finding the vendors that control multiple cards such as Capital One (Secured Card) and Best Buy Card and GE Capital (Dillards) and (Sams Club). Sadly the Discover card will take a while to get approval with on GE bank -- the clerk advised to just try for the department card.
Long-term with these cards
-- Capital Secured MasterCard --> C1 VentureOne VISA
-- Dillards Department Card --> Dillards Amex Card
-- Sams Club Card --> Sams Club Discover Card
-- Best Buy Card --> Best Buy MasterCard
Now that Capital One has purchased "orange" ... the financial company, I can deposit to their CDs (with no minimum deposit required) and eventually roll the CD deposit from the secured card over to the CDs and I should be able to qualify for the Cash Card. I won't apply for that until I have $5,000 on deposit which I estimate will take another 6 months of saving.
The key here to increase your credit is first show the bank you can handle the credit volume ... from my research the credit Tiers are in $30,000 bands ($30K, $60K, $90K, and $120K). That means $2,500 x 12 months = $30,000 annual credit volume. I spend that putting everything that I spend on the card so they like my volume and will send other card offers. To manipulate the FICO score, I pay it down to 10% or less prior to the statement date and then FICO likes me and increase my score a few points at a time. It is a slow process. Then to manipulate your line of credit, is a more difficult process and that is to have "assets." All the upper level cards are "indirectly secured" -- consumers who have a chase sapphire preferred cards have $100K income, have $75K or more in assets (house and cds), and perfect payment history of course.
FUTURE CREDIT
My long-term plan, after the BK7 is off the bureau, which takes say 11 years (I figure at the 10 year mark, it is suppose to come off but I'll probably have to write the credit bureaus to get it removed), then I can acquire the Chase Sapphire Card with household income over $100,000 at that point when school is complete, $75K in CDs, and 10+ years of positive credit with no negatives on the bureau at that point, I will have a house with chase, car with chase, and then the sapphire card with chase. the other cards like Dillards, Best Buy, Sams, and of course Capital One will still be kept and used to establish a long history of credit usage but won't be my primary cards. or where I spend my primary credit volume with either.
End goal, Chase seems to take care of their sapphire preferred card members, so I am happy to eventually get their card that is real metal like the Centurion card and they have real customer service with real card benefits for an affordable annual fee.
KEY FROM THIS
Even if you have a Cap1 Secured Card, just showing them you spend, pay on time, utilization is below 10%, and you save for a rainy day, your credit will increase. Doing what I have done is more aggressive, but don't lose hope .... FYI, some people will increase their score by charging a tank of gas -- but that leaves the lender wondering how you would handle a real line of credit such as $5,000 -- that's why I believe my advice helps you beat the system.
END GOAL
$30K line of credit on my card and paid off monthly.
CONS WITH THE CARDI truly hate Cap1 customer service -- they are the most unfriendly people on the planet AND they don't listen. Everything is scripted over there ... You also have an alternative which is to email their customer service, and they are just as unhelpful and use their canned responses to my questions do not answer my questions so I often have to REPLY back via the email response and tell them ANSWER MY QUESTION or get me SUPERVISOR. Then they suddenly answer the question. It would be too lengthy to give examples, but a sub-prime cards do not seem to get quality customer customer service -- but they are a means to an end -- a PRIME level card where I get real customer service and real card benefits.
CONCERNS ABOUT SECURED VERSUS NON-SECURED
The difference for me between a "secured" card and a "non-secured" card in rebuilding credit is simply the assets required to open the account and the "cost" of financing that card. meaning, the secured card is $29 annual fee. if you pay off every month in full, there are no interest charges. The cons are the amount of deposit that you have place to increase your line of credit to what I call a "usable line of credit" may be out of the means of some people.
I started with a $200 line of credit with utilitzation means you can't spend anything over $60 a month or you blow your utilization which means your credit score tanks. For myself, I suffered for 6 months putting everything I could into the secured CD and I now have a $3000 line of credit and this means I can spend $900 a month without blowing the utilization or tanking my credit.
the summary of the argument of secured cards versus high-interest non-secured cards really depends on your situation, if you have the deposit money, the a secured card, in my opinion, is cheaper. if you don't then the higher interest non-secured cards may be the way. i just hate having to pay interest on everything that i purchase. that to me is counter productive.
The benefit to me having the secured card means I don't pay interest on the card ... I pay it weekly. This way I am never over the limit, never late, and I show Cap1 i can handle a $3,000 line of credit by spending $2000+ a month and paying it off every month. To me, I think that's the key is showing them before they give me the larger line or credit that you can handle. Example: you have a $500 CLI. deposit your payroll to your checking and/or savings. then go purchase the $450 on your Cap1 card, then pay the card account at the end of the week. Repeat this process 3 times but on the 4th week .... let everything post and use your debit card on the 4th weekly only. The reason is to skew FICO, an added formula is to make sure you pay the card down to less than 10% of the credit line at least 1 week before the statement is cut -- this means pay it during the grace period before they send you a bill. For myself, The last week of the month is where I make sure everything posts and the credit line is adjusted back to the maximum credit line minus (meaning utilization is 10% or less) and i use my debit card that week onlyl.
Example, last month, I charged $2551.98 to the card but i paid it down to $700 prior to the statement cutting. That means they report to credit bureaus that I have a $700 balance out of $3,000 line of credit which makes my utilization 23.33%.
MY CREDIT HISTORY
I had BK7 in 2010. I got the Cap1 Secured Card 12/2011. This month, 12/2012, things have changed. My story is that I suffered and saved and increased my line of credit to $3000 within 6 months of opening the card. I have acquired $450 unsecured credit during that the first 6 months and rest remains secured in the CD account. What that has gained me was approval to get a newer-used vehicle 50K miles then I got approved for a Dillards card $400 CLI, then I got approved for $2,000 with Best Buy (Cap1 now does the financing instead of HSBC which was more difficult), then I got approved Sams Club ($700 CLI) today ... all in a year. My focus with financing is finding the vendors that control multiple cards such as Capital One (Secured Card) and Best Buy Card and GE Capital (Dillards) and (Sams Club). Sadly the Discover card will take a while to get approval with on GE bank -- the clerk advised to just try for the department card.
Long-term with these cards
-- Capital Secured MasterCard --> C1 VentureOne VISA
-- Dillards Department Card --> Dillards Amex Card
-- Sams Club Card --> Sams Club Discover Card
-- Best Buy Card --> Best Buy MasterCard
Now that Capital One has purchased "orange" ... the financial company, I can deposit to their CDs (with no minimum deposit required) and eventually roll the CD deposit from the secured card over to the CDs and I should be able to qualify for the Cash Card. I won't apply for that until I have $5,000 on deposit which I estimate will take another 6 months of saving.
The key here to increase your credit is first show the bank you can handle the credit volume ... from my research the credit Tiers are in $30,000 bands ($30K, $60K, $90K, and $120K). That means $2,500 x 12 months = $30,000 annual credit volume. I spend that putting everything that I spend on the card so they like my volume and will send other card offers. To manipulate the FICO score, I pay it down to 10% or less prior to the statement date and then FICO likes me and increase my score a few points at a time. It is a slow process. Then to manipulate your line of credit, is a more difficult process and that is to have "assets." All the upper level cards are "indirectly secured" -- consumers who have a chase sapphire preferred cards have $100K income, have $75K or more in assets (house and cds), and perfect payment history of course.
FUTURE CREDIT
My long-term plan, after the BK7 is off the bureau, which takes say 11 years (I figure at the 10 year mark, it is suppose to come off but I'll probably have to write the credit bureaus to get it removed), then I can acquire the Chase Sapphire Card with household income over $100,000 at that point when school is complete, $75K in CDs, and 10+ years of positive credit with no negatives on the bureau at that point, I will have a house with chase, car with chase, and then the sapphire card with chase. the other cards like Dillards, Best Buy, Sams, and of course Capital One will still be kept and used to establish a long history of credit usage but won't be my primary cards. or where I spend my primary credit volume with either.
End goal, Chase seems to take care of their sapphire preferred card members, so I am happy to eventually get their card that is real metal like the Centurion card and they have real customer service with real card benefits for an affordable annual fee.
KEY FROM THIS
Even if you have a Cap1 Secured Card, just showing them you spend, pay on time, utilization is below 10%, and you save for a rainy day, your credit will increase. Doing what I have done is more aggressive, but don't lose hope .... FYI, some people will increase their score by charging a tank of gas -- but that leaves the lender wondering how you would handle a real line of credit such as $5,000 -- that's why I believe my advice helps you beat the system.
END GOAL
$30K line of credit on my card and paid off monthly.
2 Comments
Comment 1 by roughdraft
Re: How To Use Capital One Secured - 1 Year Later 
on 2012-12-18
Wow, I think you may have wanted to post a forum, for all the advise you are giving on building, or rebuilding credit. As for the Capital One Seucred card, I am not sure if you are expecting it to upgrade to the Venture card, but I was told that their secured card would not become an unsecured card so that in order to get your deposit back, you have to close the card. They may tell you at first that you can... Luckily, you have already established credit with other companies. Slow and steady, wins the race.
on 2012-12-18 Wow, I think you may have wanted to post a forum, for all the advise you are giving on building, or rebuilding credit. As for the Capital One Seucred card, I am not sure if you are expecting it to upgrade to the Venture card, but I was told that their secured card would not become an unsecured card so that in order to get your deposit back, you have to close the card. They may tell you at first that you can... Luckily, you have already established credit with other companies. Slow and steady, wins the race.
Comment 2 by wanderer
Re: How To Use Capital One Secured - 1 Year Later on 2012-12-18
Congrats on rebuilding. However, banking relationships do not affect the credit cards as a general rule (legally seperate in most cases). Capital One now offers prime cards but still operates as a subprime bank. Odds on favorite is using them to build a solid credit file and seeking prime cards eleswhere. There are many Capital One cardholders on this site and most have found that Capital One serves as a start in the rebuild. As to large credit lines, banks are more cautious than the old days so it takes time and a great performance track record with a good income.
on 2012-12-18 Congrats on rebuilding. However, banking relationships do not affect the credit cards as a general rule (legally seperate in most cases). Capital One now offers prime cards but still operates as a subprime bank. Odds on favorite is using them to build a solid credit file and seeking prime cards eleswhere. There are many Capital One cardholders on this site and most have found that Capital One serves as a start in the rebuild. As to large credit lines, banks are more cautious than the old days so it takes time and a great performance track record with a good income.
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Disclaimer: This content is not provided by Capital One. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by Capital One. Review content is powered by Finance Globe.
