Capital One Platinum Credit Card Review: Is It a Good Card to Build Credit?
The Platinum Card from Capital One is a card for customer with bad credit that provides basic benefits and fees.
Credit cards for people with low credit scores tend to offer bare-bones features and this card is no different. However, that simplicity can be a big advantage if this is your first credit card.
In the next few minutes, we’ll show you how this card works, what its rates and fees are, how it compares to other cards and how you can use it to your advantage.
Pros: No annual fee, no balance transfer fee, possible credit-limit increase after 5 months
Cons: Slightly high APR, no rewards
Estimated Yearly Cash Rewards: None
|Sign-Up Bonus||Annual Fee||Regular APR|
This credit works in a very basic way. It has no rewards points or bonuses or other things that you’d normally see with a credit card.
You can use it to make a purchase, transfer balances and take out cash advances. “Making purchases” encompasses stuff you buy with the card: groceries, gas, eating out, autopay bills and more. This also includes any fees or interest you pay, which we’ll talk about later.
Balance transfer refers to the fact that you can move balances from one credit card to another. This feature is helpful if you have a balance on a credit card with a higher interest rate than the new card you’re applying to.
For example, the TOTAL Visa has a 34.99% interest rate. If you have a balance of $1,000 for a year, you’ll pay $349.90 in interest.
If you transferred that balance to your Platinum Card from Capital One, you could save money. Exactly how much you can save in this scenario is something we’ll talk about in the rates and fees section.
The final function of this card is cash advances. These are transactions where you put your credit card into an ATM and withdraw cash just like you would with a debit card. The transaction requires a PIN, which you’ll need to request from Capital One.
There are several tools you get from Capital One that can help you become a smarter credit card user. First, Capital One has a program called “CreditWise.”
This is free credit monitoring, which means you can use it to check your credit score, get alerts about changes to your credit file and when your social security number pops up in black markets.
This type of service is common among all the major credit card companies. Our advice is to log into your account daily to check up on your credit.
Being proactive will help you spot any errors or inaccuracies and take care of them before they become an issue.
Credit Wise gives you a simulator you can use to see how much your score will go up by paying off credit card debt, too.
Another main extra benefit of this card is that Capital One will increase your credit limit if you can make your first five payments on time for at least the minimum payment.
This perk can help your credit score because it lowers your “utilization ratio.” This refers to the ratio of your credit card balance to your credit card limit.
You’ll want to keep your balance under 30% of your limit. Once it exceeds that, you’ll see your credit score drop. Keeping your spending habits the same while getting a higher credit limit should increase your score.
A credit card’s rates and fees are an essential part of owning a credit card. The statistics indicate that if you’re using a credit card, there’s a better chance than not that you’ll carry a balance.
What this means is that you don’t pay off all the purchase you make or fees you pay in a given billing cycle (usually 30 days starting the day you open your account).
If you carry a balance, Capital One will charge you an interest rate. Other circumstances will cost you certain fees and percentage rates, too. We’ll list those rates and fees below and then explain them:
- Interest rate for purchases and balance transfers: 26.99%
- Interest rate for cash advances: 26.99%
- Balance transfer fee: None
- Cash advance fee: $10 or 3%, whichever is greater
- Late/returned payment fee: Up to $39
- Annual fee: None
There are four fees here you need to know about. The first is the purchase and balance transfer “APR”, which stands for annual percentage rate. When you don’t pay your entire balance off on the due date, whatever you don’t pay gets an APR.
Let’s say you get behind on your bills and you end up carrying a $500 balance on your card for a whole year. You’ll pay $124.95 in interest, which is around $10 a month.
While the monthly payment doesn’t seem high, look at it from the bigger perspective: You’re paying around $135 to borrow $500.
The goal is to avoid that interest payment no matter how big your balance is. To do that, you’ll need to make a budget that includes how much you earn and how much you should be spending every month.
This will help control your spending and prevent using your card to buy things you don’t need.
The second fee here is actually two fees for one type of transaction: cash advance APR and fee. The APR is the same as the purchase and balance transfer fee. You’ll also have to pay a one-time fee to make the cash withdrawal, too.
You’re going to pay the $10 fee for withdrawals up to $333. After that, you’ll pay a fee of 3% of whatever your withdrawal amount is, plus the ATM fees associated with the transaction.
The next fee we want to point out is the balance transfer fee. This card has no fee, which is very rare among credit cards. Earlier we mentioned using a balance transfer could save you good amount of money on balances.
If you have a $500 balance on a card with a 34.99% APR, you’ll pay $174.95. This is $50 more per year than what you’d pay with the Platinum Card from Capital One.
To transfer your balance, you’ll enter the account number of the balance you want to move and the amount you want to move.
Remember, though, that there’s a chance you can’t bring over your entire balance because it may exceed the credit limit Capital One gives you. Either way, though it’s worth trying if your balance’s APR is higher than 26.99%.
The final fee is your late fee. Anytime you make a late payment, Capital One will charge you $39. The company will add it to your balance.
There are times when we have a tendency to accept the first credit card offer that we see. We check out some of the basic information, think it looks good and then sign up.
We believe it’s important to know what other options are out there. Doing a comparison like the one in the chart below helps you make an informed decision:
|Capital One Platinum Credit Card||Indigo Platinum Mastercard||TOTAL Visa Credit Card||Deserve Classic Mastercard||Citi Secured Mastercard||Discover it Secured||Wells Fargo Secured Credit Card|
|Yearly rewards for $20K spending||None||None||None||None||None||$200||None|
|Minimum deposit required||None||None||$89||None||$200||$200||$300|
|Annual fee||None||Up to $99, depending on credit||$75 first year, $123 after||None||None||None||$25|
|Late fees||Up to $39||Up to $39||Up to $39||Up to $25||Up to $39||1st one free, up to $39 after||Up to $37|
This chart shows two types of credit cards: ones that require a deposit and ones that don’t.
The Platinum Card from Capital One is the former. You don’t have to pay a deposit to open it. Of the cards that don’t require deposits, this card is most similar to the Deserve Classic Mastercard.
Both lack an annual fee but the Deserve Classic Mastercard has lower late fees and a lower APR which, in our opinion, makes it the better card if you tend to pay late or carry a balance.
Also, you can upgrade to Deserve’s next card, the Deserve Edu. This card gives you free Amazon prime and 1% cash back on purchases ($1,000 spent generates $10 in rewards).
The only other card in the chart we feel gives the Capital One Platinum Card any competition is the Discover it Secured. The card requires at least a $200 deposit but it gives 1% rewards and the company matches the rewards you earn the first year.
The Citi Secured Mastercard, Indigo Platinum Mastercard, TOTAL Visa Credit Card, and Wells Fargo Secured Credit Card all have drawbacks lurking in the rates and fees that make them more expensive than the Capital OnePlatinum Card.
Based on our research on this card, we think it’s one of the better choices if you have bad credit.
The APR is reasonable, there is no annual fee and you have a chance to bump up your credit limit up after five months.
If you keep your balance as low as possible, that credit limit increase will boost your score. This technique accounts for 30% of your credit score.
Other ways that you can boost your score on this card is to make on-time payments. Paying on time accounts for 35% of your credit score.
In general, these two methods are the best way to boost your score with this credit card.