It Is Credit One Credit Cards: Confusing for Consumers
It Is Credit One Credit Cards: Confusing for Consumers
It Is Credit One Credit Cards: Confusing for Consumers Credit One provides unsecured credit cards to customers with terrible credit or better. Credit One credit cards are great for people who want to build credit, get perks, or borrow money in case of an emergency.
The best word to describe the credit cards offered by Credit One is confusing.
- When you apply for a card, you don’t know its fees, rates, incentives, or grace period.
- When you make a timely payment, you don’t know whether it will prevent a late charge.
- Credit One takes a week to process payments, and many cardholders have trouble paying online, according to CFPB and state authorities.
- Credit One’s website terms and conditions are general and “for informational purposes only.” When you qualify for a card, you’ll see the terms.
- Some people have applied for a card from Capital One since the issuer’s name and logo are identical.
Credit One sells credit cards for people with poor credit. The issuer says it needs to change how it does things so that as many subprime borrowers as possible can get cards. True, but the misunderstanding is genuine, so apply carefully.
Credit One offers three types of cards:
Applications: It’s All About Prequel
Many card issuers enable prequalification. With prequalification, you give basic information, and the issuer checks if you’ll be authorized. Prequalification doesn’t hurt credit.
A “hard inquiry” only occurs when you apply for credit. Prequalifying doesn’t ensure approval. “Soft yes”
Credit One requires prequalification, although other lenders don’t. Prequalify to discover the card’s fees, rates, and rewards structure. You decide whether to apply after seeing the terms.
The application review is more thorough than a “prequal” check, so you may or may not be approved for different card conditions.
Why Do They Do It This Way?
Credit One thinks that its prequalification method protects clients with bad credit who can’t afford a drop in their credit score.
An issuer may offer three cards with $99, $45, and $0 annual fees. Someone with terrible credit may qualify for the $99 card but not the other two, so they’d presumably apply for the $0 card first, then the $45 card, and then the $99 card as a last option.
Three applications would hurt their credit score.
Credit One may provide a single card with 12 perks, fees, and rates. The issuer authorizes you depending on your creditworthiness.
There’s a benefit, but there’s also an additional hoop to jump through, and you don’t know what you’re receiving (or likely to receive) until you start the application process, at which time you may be less inclined to bail.
Creditworthiness determines eligibility for one of six cash-back rewards schemes. Options:
- Credit One Bank® Cash Back Rewards Credit Card and Credit One Bank® Platinum Visa® for Building Credit
- 1% cash back on petrol, grocery, phone, internet, cable, and satellite TV.
- 1% cash back on petrol, grocery, eating, phone, internet, cable, and satellite TV.
- All purchases get 1% cash back.
- 5% cash back on the first $5,000 a year on petrol, groceries, mobile phone service, internet service, and cable and satellite TV service.
- 1% cash back on petrol and vehicle purchases, double on NASCAR.com.
- Double cash back on NASCAR.com purchases.
The bottom line is that you won’t know how you’ll earn cash back until you get your card.
Each month, rewards are automatically turned into a statement credit, so at least that part is easy.
Interest Rates: They’re OK
Interest rates for August 2018 were listed in the “for informational purposes only” section. They ranged from 19.74% to 25.74%. Bad or restricted credit means hefty interest rates on cards and loans. Credit One’s rates are normal for bad-credit credit cards.
Annual Fees: Take a Guess
As with other Credit One card features, the yearly charge is unknown until you’re approved. First-year fees are “between $0 and $75.”
The second year and onward, the range is $0-$99. After the first year, monthly payments may be made. Maybe not.
This document includes “actual” Credit One credit card agreements for cardholders. As of August 2019, it listed 21 APR, an annual fee, and card feature combinations. Again, you won’t know which one applies until you’re approved.
Some Credit One cardholders pay the yearly fee monthly. They have a monthly payment even if they haven’t used the card.
This makes it more likely that you’ll miss a payment or pay late, especially since many cardholders have trouble getting their payments credited quickly, as we’ll talk about below.
Here are some extra fees you might pay (we say “might” since the “for informational purposes only” conditions may vary from the card’s terms):
- $19 per year for a 15-year-old approved user
- 3% charge (minimum $1)
- Cash advances: $5 or 8% of each, whichever is larger, or $10 or 3% of each.
- $37 late charge
- Return fee: $35
- $0-$49 to raise credit limit
- $10 per duplicate statement
- $6 sales receipt
- $5 or 8% of transferred balance (if the card allows transfers at all)
If you pay off your credit card balance in full each month, you won’t be charged interest on purchases until your next due date. Pay monthly in full to avoid interest.
Credit One cards don’t indicate whether you have a grace period. “Paying interest” is included under the “for informative purposes” agreements. If your account has a grace period, it says so.
If your account has no grace period, you’ll pay interest on every purchase after it’s posted.
You won’t know about Credit One’s grace period until you apply. Credit One’s August 2018 card agreements included a grace period of about half.
Making Payments: Confusion Reigns
The FM’s October 2018 investigation discovered hundreds of Credit One complaints that customers hadn’t seen. These complaints and other comments often mention payment concerns.
Credit One failed to execute payments sent before the due date. In other circumstances, users couldn’t pay online and had to pay by phone or mail, incurring extra expenses.
Credit One wouldn’t say anything about the results of the investigation, but the way it handles payments seems to back up the concerns. Most credit card providers apply payments instantly.
Credit One will keep your money for many days unless you pay approximately $10 to process it the same day.
When Will Your Payment Be Credited?
Your Credit One card balance includes purchases, cash advances (if any), interest, and fees. Credit One requires a 5% minimum payment. Most credit cards have a 1%–3% minimum payment.
Credit One cardholders may set their own due date six days before or after the original date. Every six months, cardholders may change their due date.
Credit One cardholders must be vigilant while making payments. The website’s “FAQs” section lists “Standard Payment” and “Express Payment” as bill-paying options. It becomes risky from there.
If you pick Standard Payment, your cash will be accessible in 5 business days, and you may only pay using a bank account. Five days is tight. Say the 15th of the month falls on a Saturday.
To avoid a late charge, make your payment on the 7th (a Friday) to ensure it’s posted within “approximately five (5) business days.” You may be “late” unless you paid eight days early.
Express Payment “makes cash accessible sooner (typically the following business day).” The cost of Express Payments is $9.95 per transaction.
Credit One’s language is odd. We’ve never encountered a credit card agreement with “funds available” language.
We don’t know what this phrase signifies since it normally refers to bank deposits. We presume it shows when the money will post.
When Does Your Available Credit Refresh?
And more: The “actual terms and conditions” paper includes this clause in all 21 card agreements:
If a payment lowers the main balance on your card account, you may be able to get more credit (up to your credit limit) after 12 calendar days.
This suggests that whether you pay on time, late, or with Express, you can’t use your full credit limit for two weeks. You’ve exhausted your $500 credit line. You pay off your card but can’t use it for 12 days.
Credit One’s “Application Information” number was unreachable. You must enter your 16-digit Credit One card number to ask a question about applying.
Consumer Complaints
Credit One cards are given out by Credit One Bank of Las Vegas, which is a part of the Sherman Financial Group.
Payment difficulties are typical in Credit One credit card complaints to Consumer Affairs. Many reviewers complain they couldn’t pay their Credit One payment online.
Or they made a payment, but it was late and caused a late charge. Consumer Affairs has received over 1,000 complaints concerning the company’s customer service.
Yelp complaints about Credit One include service, invoicing, and payment concerns. In February 2017, 110 Yelp reviewers awarded Credit One one star.
Credit One is not BBB-rated. As of February 2017, three of the 112 evaluations on the southern Nevada BBB website were good, three were neutral, and the rest were bad.
574 of 783 complaints were about billing or collections, including payment concerns.
Credit Protection: Expensive
Credit One’s “Credit Protection Program” is another perk. If the main cardholder “accidentally” loses their job or gets hurt, the minimum payment is waived for six months.
This perk costs 96 cents for every $100 owed. After enrolling, pay monthly. If your balance is $500 one month, the program will cost you $4.80; if it’s $400 the next, you’ll be charged $3.84, and so on.
After enrolling, you must wait 30 days to activate your coverage. Activating your card closes your account and prevents you from using it. The minimum payment is waived, but interest continues to accumulate.
Credit One may revoke your registration if your account is 60 days past due, 20% or more above the credit limit, Credit One “no longer controls the account,” you committed fraud, or you’re in one of its debt management programs.
Visa cardholders receive travel accident coverage and a collision damage waiver for rental vehicles. Visa’s zero fraud liability means cardholders must report illegal charges promptly.
Although Visa’s “zero fraud liability” policy guarantees that you will not be held liable for fraudulent charges, federal law limits cardholder liability to $50.
You can obtain your credit score for free just about everywhere, including TheFM. Some credit card providers offer free scores to non-cardholders.
“Personalizing” your credit card (23 designs for the rewards card, 20 for the rebuilding-credit card) may cost extra. This cost isn’t listed on the website.
Better Alternatives: Many
Given Credit One’s unclear conditions and other downsides, you may ask why so many individuals apply. Consumers may assume they’re getting a Capital One card.
Credit One’s swooshy logo predates Capital One’s, yet misunderstanding lingers. This was a common complaint on Consumer Affairs’ website.
Credit One cards are targeted at those with poor credit, but there are better options. Secured credit cards provide better terms, reduced fees, and assured grace periods.
Secured cards demand a $200–$300 deposit. Getting the money may be difficult, but you receive it back when you delete the account or move to an unsecured card. Credit One’s fees are nonrefundable.
The Discover it® Secured Credit Card gives 2% cash back at gas stations and restaurants and 1% cash back on all other purchases.
Discover may upgrade you to an unsecured card after seven months of responsible use. It costs $0 every year.
You may qualify for the Capital One Platinum Secured Credit Card. You could receive a $200 credit line with a $49, $99, or $200 deposit, which you could pay in instalments.
Paying on time for six months may earn you a bigger credit limit without a deposit. There is no yearly charge.
When credit is restricted, customers could apply for a Credit One credit card without completing their investigation. You may discover better options with explicit terms and restrictions.
