Credit One Bank Secured Card Review: Secured Card with $0 Annual Fee & Rewards
The Credit One Bank Secured Card uniquely combines a $0 annual fee and rewards for building credit, even letting your security deposit earn interest. But with a high 29.74% APR, is this a smart choice for your credit-building journey?
| Annual Fee | $0.00 |
| Rewards Rate | 1% Cash Back Rewards |
| Regular APR | APR: 29.74% (variable rate) |
Overview
The Credit One Bank Secured Card offers a rare combination for those looking to build or rebuild their credit: a $0 annual fee and a cash back rewards program. Cardholders can earn 1% cash back on eligible gas, groceries, and select monthly services like phone and internet bills. This card helps establish a positive credit history by reporting your activity to the major credit bureaus. In a unique twist, your required security deposit will also earn interest over time, a small but welcome perk not often seen in the secured card market.
However, the card's benefits come with a significant catch: an exceptionally high variable APR of 29.74%. This makes carrying a balance from month to month extremely expensive and can quickly undermine your credit-building efforts. To make this card work for you, it's essential to pay your balance in full every month without fail. There is also no sign-up bonus or introductory APR offer to sweeten the deal.
Ultimately, the Credit One Bank Secured Card is best suited for individuals with poor credit who are disciplined enough to avoid carrying a balance. If you need a straightforward, no-annual-fee tool to demonstrate responsible credit use and want to earn some rewards on everyday essentials, this card can be a stepping stone to a better financial future.
Pros & Cons
What's great
- No annual fee
- Cashback on purchases
- Low credit score requirement
- Security deposit earns interest
Things to consider
- High regular APR
- No sign-up bonus
- Limited rewards categories
- No intro APR period
Benefits
Build Credit with No Annual Fee
The primary benefit of the Credit One Bank Secured Card is its function as a credit-building tool. Your payment activity is reported to the three major credit bureaus, which can help you establish a positive credit history with responsible use. Crucially, it provides this service with a $0 annual fee, making it a cost-effective option for anyone looking to build or rebuild their credit without worrying about a yearly charge eating into their budget.
Earn Cash Back on Everyday Essentials
Unlike many secured cards, this card offers a rewards program. You'll earn 1% cash back on eligible purchases in practical, everyday categories: gas, groceries, and recurring monthly bills like your mobile phone, internet, and cable or satellite TV services. While there is no sign-up bonus and the rewards rate is modest, the ability to earn cash back on necessary expenses is a valuable perk for a card in this class.
A Unique Perk for Your Deposit
In a rare feature for a secured card, your required security deposit is held in an account that earns interest. While this won't amount to a significant return, it’s a welcome bonus that puts your deposit to work for you while you focus on improving your credit score. This small but thoughtful perk helps set the card apart from competitors that simply hold your deposit without offering any return.
Drawbacks
The card's biggest weakness is its exceptionally high 29.74% variable APR. For a product designed to help people build credit, this rate is punitive and leaves no room for error. Carrying even a small balance from month to month will result in substantial interest charges that could easily undermine your financial goals. The lack of any introductory APR period means it's crucial for cardholders to pay their statement balance in full every month.
While earning rewards is a nice perk for a secured card, the program here is quite restrictive. You'll only earn 1% cash back on eligible purchases in specific categories like gas, groceries, and certain utility services, rather than on all of your spending. This is less flexible than other credit-building cards that offer a flat rewards rate on every purchase. Additionally, the card offers no sign-up bonus, a feature that some competing secured cards provide to give new cardholders a bit of extra value.
Decision Guidance
This card is a strong contender for individuals rebuilding credit who are disciplined enough to pay their balance in full each month. It provides a rare, no-annual-fee path to establishing a positive payment history while earning modest rewards on essential spending. However, the extremely high APR makes it a risky choice if you anticipate carrying a balance, as interest charges will quickly erase any benefits and hinder your credit-building efforts.
Summary
The Credit One Bank Secured Card is a solid tool for building credit, offering a rare mix of no annual fee and cash back rewards on everyday essentials. Its extremely high interest rate is a significant tradeoff, however, making it best suited only for disciplined individuals who are committed to paying their balance in full each month to avoid derailing their financial progress.