hi, I'm about to take the plunge and get my first credit card! I'm thinking of getting the Capital One Secured Mastercard. I know it's not the BEST card ever (APR is 24.99% ew) but it seems like the smallest option and one I will certainly be approved for since I have no credit. I'd only use it for my phone bill. I plan to use it until I have better credit, then cancel and get a better card(I bank with Alliant but I don't think I qualify for any of their cards). Do you think this is a wise idea?
I think it’s a great idea! It’s so hard to be approved for a credit card nowadays, so applying for a secured credit card is a surefire to be approved. For those that don’t know, with a secured credit card you pay a downpayment. This payment is how much your credit limit is per month. So if you pay $200, your credit limit is $200. If you don’t pay your bills on time, the credit card company uses this deposited money to pay your bills. You still get charged APR fees, but these also come out of your deposited money.
It takes about six months to establish credit, so you’ll have a credit score after six months. In eight months, your credit card company will evaluate you, and move you to a non-secured card if you’ve been good about paying your bills. They will refund you whatever is left of that money (hopefully all of it if you’ve paid on time each month).
Some secured credit cards require you to pay annual fees! Make sure that Capital One is not one of them. I would also recommend getting a secured credit card with the company that you want to get an un-secured credit card with.