Have you received an invitation to apply for a Credit One credit card in the past? When your credit score is less perfect or downright bad, your choices for cards can be be somewhat limited. However, that shouldn’t require you to be raked over the coals while you’re rebuilding your credit rating, either. Please read our review to learn what you can expect with a sub-prime Credit One credit card.
Confusion and complaints
To be frank many people are immediately confused by the name, logo, and graphics, which are almost identical to the reputable and much larger Capital One (pay close attention and don’t let yourself be fooled, since that is their intention). This is how Wikipedia describes it:
“Credit One is not affiliated with Capital One, a multi-billion-dollar first-tier corporation. However, Credit One has adopted confusingly similar trade dress, using a confusingly similar name, similar fonts, similar trademark layout and a similar circular swoosh, which they changed from red to blue.”
Those statements echo the other reviews and comments I see from consumers. On a regular basis I see people asking if Credit One is part of Capital One. I understand why so many ask that, given that their two logos are so eerily similar. That’s not by accident, unfortunately, and many people end up being deceived by this halo effect.
The difference is that Credit One’s cards are designed for those with bad credit in mind. Capital One, although it does offer credit cards designed for those with little credit history, is a major card issuer — and therefore has cards for those across the credit quality spectrum, including rewards cards for those with fair credit, good credit and excellent credit.
Excessively slow payment processing times is another frequent complaint about Credit One. I’ve read countless credit card reviews by customers who allege that the Credit One Bank payment center can take a long time to clear your payments. You can expedite your payments using the “Express Pay” option, but it costs $9.95 to do so. This is a very shady business practice and one which you should be wary of because it can further damage your credit score. According to the credit rating agencies, payment history (i.e. whether you pay by the due date) makes up 35% of your credit score.
As with most cards designed for those with bad credit, the Credit One Visa charges you for the privilege of rebuilding your credit. The fees and interest rates associated with your card will depend on your credibility.
Annual Fee: Depending on which terms you get, you could get charged any one of the following:
- $35 annual fee
Interest Rate: A variable 17.9 percent, 19.9 percent or 23.9 percent, depending on your credit quality
Credit Limit: $300 to $500, though most customer reviews I’ve seen say they get $300. Keep in mind that the first year’s annual fee will immediately be billed to your account when it’s opened and reduce your available credit by that amount.
Now if you just saw that, you may think “That’s not the that bad for someone with really awful credit or a recent bankruptcy.” But guess what:
That means they start charging you interest on the date you make your purchases.
It’s true that all credit cards charge interest on purchases, but the difference is that the other guys give you a grace period; after your 30-day billing cycle closes, if you pay the full balance within 21 days from that date, you won’t get charged interest. But if you don’t, the interest charges will be tacked on in the following month.
But with the Credit One Bank credit card, since there’s no grace period, it becomes almost impossible to avoid finance charges completely.
So is it a scam?
Since they disclose the terms and conditions in the application’s fine print, technically the card is not a scam. It’s just a very expensive sub-prime card that is packed with hidden gotchas. So even though it’s technically legit that doesn’t change the fact that many consumers are feeling ripped off and caught off guard by the product’s terms.
The only real silver lining to this card is that your account activity will report to the three credit bureaus. That means if you use the card responsibly, it can help you rebuild your credit history over time and eventually result in a strong credit score. However, there are should be many other less expensive options available for those who just want to rebuild your credit. As an alternative, here are some secured credit cards to consider.
Updated April 8, 2015