In order to get approved for many credit cards, you need good credit. But what if you have low or no credit?
Luckily, there are some credit cards out there designed with these consumers in mind. One of the best options to consider is the Capital One® Platinum Credit Card.
Using Capital One® Platinum Credit Card to build credit
Whether you’re just starting out or you’re working hard to build your credit, using a credit card responsibly can help you establish and build credit. Once approved for a card, it’s best to make full payments on time and keep your credit utilization low.
|What we like||Heads up|
- The rundown: Everything we like about the Capital One® Platinum Credit Card
- Heads up: What you should consider before applying for the Capital One® Platinum Credit Card
- Do the math: How to get the most out of the Capital One® Platinum Credit Card
- The competition: How the Capital One® Platinum Credit Card stacks up against similar cards
- Battle of the Platinum: Capital One® Platinum Credit Card vs. Credit One Bank® Platinum Visa®
- Bottom line: Is the Capital One® Platinum Credit Card right for you?
On the surface, the Capital One® Platinum Credit Card looks like a simple, no-frills credit card, but there’s plenty to like about this card. Here are our favorite features:
- Has no annual fee
- Designed for people with average credit (as defined by Capital One)
- You may be eligible for a higher credit line after making your first five monthly payments on time.
- Includes fraud coverage
- Comprehensive account monitoring (so you’ll be notified if there’s anything suspicious)
- You can choose your due date
These benefits are a boon for cardholders — especially if you’re trying to boost your credit. Cardholders can keep tabs on their TransUnion VantageScore 3.0 credit score and credit profile through CreditWise® from Capital One®. Another free resource for keeping tabs on your credit is Credit Karma, which offers access to credit reports from TransUnion and Equifax.
“The card’s two strengths are that it’s not a secured card, so no deposit is necessary; and, you can have your credit limit increased after five consecutive months of on-time payments,” says J.R. Duren, a personal finance reporter at HighYa.com.
Additionally, this card comes with other consumer protections such as auto rental insurance, roadside assistance, extended warranty as well as price protection. As a card with no annual fee, these perks can save you money without any extra cost to you.
Capital One® Platinum Credit Card has a much higher interest rate than other credit cards. Currently, the variable APR for purchases and balance transfers stands at 24.99 percent, which is nearly 10 percentage points more than the average credit card interest rate (over 16 percent, according to September data from CreditCards.com).
As the card is geared toward folks who are establishing or building their credit, the credit card company is taking on more risk, which results in a higher interest rate.
Depending on your credit, you may get approved for the card with their minimum credit line, which is $300. At such a small amount, this could affect your credit utilization depending on how much you spend. Your credit utilization is a big contributing factor in building strong credit scores.
Additionally, this card is pretty lackluster in the rewards department — no cash back, no miles. So if you’re interested in getting cash back or other rewards, this is probably not the card for you.
Another thing to watch out for is the interest on balance transfers. Though the card offers balance transfers without any fees, the variable interest rate is still a whopping 24.99 percent. It’s very unlikely that you would save money on interest going this route, so beware and look for cards with a lower interest rate.
Before applying for this card, consider the financial effect and see if it’s a good fit for you. Here are two common reasons you might apply for this card:
- Building your credit. This card has no annual fee, so it can be a good starter card. If you pay off your balances in full and on time, this card can help you build credit efficiently and effectively.
- Balance transfer. Though this card has no balance transfer fees, it has sky-high variable interest rates at 24.99 percent. Unless your current APR is significantly higher than this, a balance transfer is unlikely to make a lot of financial sense.
The Capital One® Platinum Credit Card is a good fit if you’re looking to build or establish credit and not pay an annual fee.
However, there are other credit cards out there you might want to consider. For example, the Credit One Bank® Platinum Visa® is another good option for consumers looking to build their credit, plus earning rewards as it offers 1 percent cash back on qualified purchases.
The card has an annual fee of $0 to $75 the first year, $0 to $99 thereafter, and there’s no way for you to predict what annual fee will be assigned to you until your account is open.
What’s more, the amount of your annual fee will be subtracted from your available credit limit. Say Credit One gives you a $500 credit limit. If your annual fee is $75, your available credit limit will be $425.
With that in mind, and if your main focus is on building credit, the Capital One® Platinum Credit Card is the clear winner.
|Capital One® Platinum Credit Card||Credit One Bank® Platinum Visa®|
|Pros: No annual fee, helps build credit, access to credit score and monitoring tools and access to increasing credit limit.||Pros: You can earn 1% cash back on qualified purchases as well as credit monitoring and zero fraud liability.|
|Cons: High variable purchase APR, no cash back, miles or rewards||Cons: Has an annual fee of $0-$75 the first year, $0-$99 thereafter; could have a high purchase APR.|
If your goal is to build credit and have a hassle-free card, the Capital One® Platinum Credit Card could be a good fit. If you have good or excellent credit and you’re looking for a balance transfer, the Chase Slate® may be better for you: It’s all about understanding your goals for a credit card before you apply.
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