How bad is Credit One?

[Anonymous]

Hey there

I immigrated from Germany a little over three years ago. I recently decided to apply for a credit card to start building a credit score. So far I don't have a credit history in this country yet since I'm only using my debit card. I applied for a secured credit card with Capital One. It was recommended to me by a friend to start building a credit history. About two days later, I received a "pre approval notice" from Credit One for a credit card with a 300 $ credit limit. It said I could accept this offer online. For some reason (it was late at night after a long day at work) I believed it was from Capital One so I went online and accepted this offer. Later I figured out that I haven't accepted anything from Capital One and I just applied for another Credit Card with another bank. Yesterday, my Credit One credit card arrived in the mail. My application for a secured credit card with Capital One was approved too. I made a 49 $ security deposit for the Capital One credit card and now I'm waiting for the credit card to arrive in the mail.

Now I have one credit card and another one on the way. I'm not planning to use the credit card(s) very often or to pay high amounts with it. It's mainly to build my credit score. I read a lot of bad reviews about Credit One and now I'm unsure if I should even activate this credit card or if I should call to cancel it before I activated it. I read that canceling a credit card might hurt my credit score but since I don't even have a credit history yet, is there even anything that could be hurt? But then on the other side, is it beneficial for building a credit score when I have two credit cards that I plan to always pay off in full and on time? Or is having more than one credit cards not different from having only one? And the main question, is Credit One really as bad as people say? Did anyone have any good experiences with this credit card?

Thank you in advance for your help

Sarah

[Anonymous]

So bad that I would recommend getting a secured credit card first. 

[Anonymous]

Credit One is not inherently "bad" per se...if they were they would have been shut down by the government. What makes Credit One a bottom feeder is that 1) they changed their name AND their logo to appear very similar to those of Capital One. This can be seen as a calculated effort to confuse people into opening a credit card as they may believe they are applying with Capital One. Capital One is well known, mostly respected and they spend a lot on advertising. It could be assumed that Credit One is saving a lot on advertising by riding Capital One's coattails 2) a lot of Credit One credit cards do not have a grace period which means that the minute you swipe or dip the card to make a purchase your account will start accruing interest charges and 3) they are owned by a collection agency. 

If you had an American Express card in Germany you should contact American Express to see if they will allow you to convert your German Amex to an American Amex. They call it Global Transfer:

https://www.americanexpress.com/global-card-transfers/

There are far better cards than Credit One; however, if you use Credit One wisely you can get the benefit of establishing credit and then close the account once you have moved on to bigger and better. You could certainly close the Credit One account. The only bad from closing a card is that its available credit line will no longer be factored into your debt to credit ratio. You have already taken a hit for Average Age of Account-and since you are so new to credit, that really won't matter. 

The best secured cards (in my opinion) are Capital One and Bank of America.

Good luck.

[pizzaman1]

Credit One is not the best bank but it helped me get to better credit scores and get better cards after I filed bankruptcy. Just use it responsibly over time

[AverageJoesCredit]

As stated above but you see what happens when someone wuick glances at Credit One they think they are apping Capital One, its sickening that they do that and im pretty sure they know thats going to happen but what can you do but really pay attention to what you're apping. Its like having a Walgreens in front, or vice versa, of a CVS, can confuse the heck out of ya once inside lol. Welcome to the forum and the US

[ls2016]

I had a Credit One card. The $75 annual fee was charged to the card immediately, which left me with $225 initial limit. I knew why I applied for the card: because I couldn't do any better at the time, so I used the card to my advantage. Paid the annual fee immediately, then swiped the card once a month and paid in full as soon as the charge posted. It served its purpose the 6 months I had it, with no problems at all. I canceled it after obtaining goal cards and reading comments here. I hope it works out for you.

[AverageJoesCredit]

Nice story Is2016, glad you made it work for ya! Some people cant and i think thats one reason many get steered away. One MAY NOT have problems but when there is one, they can be doozies

[Anonymous]

Credit One isn't 'bad', they're 'expensive'. They have high fees because they specialize in providing credit to high-risk people, so you're basically paying them to take the chance on you not defaulting on however much you spend. This isn't drastically different than getting a high interest rate loan due to a low credit score as opposed to a low interest rate loan due to a high credit score-the creditor is simply trying to limit their perceived risk. When you get past the fees they are just a bank extending someone a line of revolving credit, just like the others.

With that being said, you're still better off with a secured card if you can afford the deposit. With a secured card you pay more up front, but you also get it back making your effective 'cost' zero. 

[BurgeoningHope]

You are going to want to cancel that Credit One card at some point anyway - if you can do it now and save the fees, I'd suggest now is as good a time as any. That card is never anyone's keeper simply because it's so expensive with no rewards to counter all those fees.

My husband got the Discover secured card and it worked out very well for him. It became unsecured after about half a year, and unlike any other secured card I've ever heard of, it offers rewards - and those rewards are x2 in the first year!

I'd suggest picking up another card, maybe two, and then "gardening", as it's called around here, to make your score grow. Don't apply for anything else for a while. Use your cards every month, and pay in full before the statement cuts. Basically, use them as you would a debit card. Try not to use too much of your available credit at any one time even if you do plan to pay it off immediately. And if you do need to (briefly!) carry a balance, _never_pay just the minimum. Always pay at least 3x the minimum.

Eventually you'll want 3-5 cards and let one report a small balance (between 2-9% of the credit limit on the card) every month.

The longer you hang out here, the more you'll learn. These discussion boards have been life-changing for me - and for my family as I pass these little jewels of knowledge around. Welcome!

[Anonymous]

Call and cancel it without activating it Sarah. 

There is zero value (that I can think of) in that card if you have a Capital One on the way. It would also shorten your average credit age, which is bad for your credit score. Probably not in a major way for you, but there would be a bit of a lower score.