Writer: Adam West
Editor: Lillian Guevara-Castro
Reviewer: Ashley Fricker
The Capital One secured card deposit and refund procedure is fairly straightforward if you know a few key things about the overall procedure, which we’ll take a look at in this article.
A secured credit card requires applicants to put down a refundable deposit to open a line of credit. As with most secured cards, the size of your credit line will be equal to 100% of the amount you deposit.
The minimum required deposit to open a Capital One Platinum Secured Credit Card will actually vary with your credit risk.
1. The Initial Deposit Will Depend On Your Credit
Other than its lack of an annual fee, the Capital One Platinum Secured Credit Card stands out among secured cards for its variable minimum deposit requirement. While all new cardholders will receive the same $200 credit line for making the minimum deposit, the required minimum may be 25%, 50%, or 100% of that credit line.
Put simply, the strongest applicants may need to put down only $49 to get an initial $200 credit line. If you pose a bit more credit risk, the minimum deposit rises to $99, while higher-risk applicants may have to put down the full $200 to secure that same $200 credit line.
Unfortunately, simply applying for the Capital One Platinum Secured Credit Card won’t guarantee your approval — no matter what kind of deposit you can make. Your card application may be declined for a variety of reasons, including the lack of a checking or savings account or an unresolved (non-discharged) bankruptcy on your credit report.
Your income may also be the reason your application is turned down. Capital One requires applicants to have a monthly income that exceeds their rent or mortgage payment by at least $425. For example, if you make $2,000 a month, your rent or mortgage payment needs to be less than $1,575 a month to qualify for a Capital One Platinum Secured Credit Card.
Additionally, if you already have a relationship with Capital One, you’ll need to be in good standing in those accounts. If you’re over your credit line on another Capital One card or have had a Capital One card charged off in the last year, your application will be denied. You’ll also be turned down if you already have two or more open credit card accounts with Capital One, or have applied for a Capital One card three or more times in the last 45 days.
2. You Can Add to Your Deposit Within 80 Days
If a $200 credit limit feels a little tight, here’s the good news: you can raise it by making a bigger deposit. The key detail is that you must add any extra funds within 80 days of approval, but before you activate your card. After your Capital One Platinum Secured Credit Card is activated, you can’t increase your deposit to boost your credit limit.
You can make partial payments but need to make sure you’ve made your full, required deposit within 80 days of being approved. Once we’ve received your required deposit, your card will be on its way. All deposits must be at least $20 and in whole dollar increments. — Capital One
You can add to your deposit to reach an initial credit limit of up to $1,000, and deposits can be made online through your Capital One account. Deposits must be made in at least $20 increments and must be made through an electronic funds transfer from a bank account. Cash, checks, or other money transfer methods will not be accepted.
Choosing your deposit amount means weighing a few practical trade-offs. For starters, a higher credit limit gives you more breathing room with your credit utilization rate, which compares your card balance with your available credit. The more available credit you have, the easier it is to carry a balance without hurting your utilization and, in turn, your credit score.
On the other hand, putting down a substantial deposit (i.e., much more than is required) for your Capital One Platinum Secured Credit Card may not be the absolute best use of the funds. Unlike some other secured credit cards, the deposit for your Capital One card won’t earn any interest while it rests in the security account, so you may be better off waiting for natural credit limit increases to get to a higher limit.
If you make your first five monthly payments on time, you’ll get access to a higher credit line with no additional deposit needed. You may also earn credit line increases based on your payment history and creditworthiness. — Capital One
And those credit limit increases should come, presuming you use your card responsibly. Capital One states that it will increase your limit automatically if you make your first five payments on time each month, and may provide additional credit limit increases over time.
3. A Refund Will Be Issued When You Close the Account
For many consumers, the most compelling reason to choose a secured credit card over an unsecured subprime credit card is the fact that, unlike unsecured card fees, the deposit for a secured credit card is completely refundable — including the Capital One Platinum Secured Credit Card. Once your credit has improved and you’re ready to move on from your Capital One Platinum Secured Credit Card, you can close the account and your full deposit will be returned to you.
Alternatively, some Capital One Platinum Secured Credit Card users have reported their Capital One Platinum Secured Credit Card getting upgraded by Capital One to an unsecured credit card. Essentially, Capital One periodically reviews your credit progress over time. If the issuer feels as though your credit situation has improved to the point that your risk levels are now low enough for an unsecured product, it may automatically upgrade your card and refund your deposit.
But that may not always be the case. A goodly number of forum posts detail the struggles of some cardholders to obtain an upgrade, despite good credit scores and potentially years of on-time payments, so consider the potential difficulties if this is a determining factor for you.
Of course, since your deposit acts as surety for your account, if for any reason you default on your Capital One Platinum Secured Credit Card, your deposit will not be refunded. Instead, once your account has reached the 180-days past-due mark and is charged off, your deposit will be used to cover any outstanding balance and fees when your account is forcibly closed by the bank.
Plus, if you’ve accrued a larger debt than your deposit can cover (interest fees can grow past your credit limit if left unchecked), then you’ll still be on the hook for the remaining amount.
Build Credit Safely with a Secured Card
Although how and what we use for collateral has evolved over the last few millennia, its use has been a consistent part of our financial systems. Collateral, down payments, and deposits all act as a way for lenders to reduce their financial risk, opening the door for them to lend to borrowers who may not otherwise be prime candidates for a loan or credit line.
Because secured credit cards are relatively low-risk for lenders, they can be a smart, accessible way for you to build or rebuild credit when other options are limited. If you use your card responsibly and make at least the minimum payment on time each month, you can strengthen your credit score and eventually qualify for a solid unsecured card.
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