Credit card becomes popular for financial transaction, such purchasing goods, paying bill, insurance, etc. When using this card, you agree to take loan from bank or card issuer. There are two types of credit cards: secured and unsecured one. How about Capital One secured credit card deposit status? This is interesting topic to explore because it involves Capital One as one of prominent companies in this field.
Understanding Secured Credit Card
What is deposit status on secured credit card? You need to understand difference between secured and unsecured credit card. Deposit is only available for secured option because you put money on credit account. Traditional credit card does not use deposit and it is unsecured loan without collateral. On contrary, you need to pay deposit before using secured card.
Secured card is useful for people with no credit history or bad credit score. Bank seems reluctant or hesitates to assess card application that comes from person without zero experience in credit card business. Moreover, bad credit score is high risk for using unsecured loan. Both are primary reasons why secured loan is good solution.
Capital One secured credit card deposit status is feature to know your deposit situation. To obtain secured card, you should prepare application then wait for approval. It takes time to evaluate, but the answer will come immediately. After that, there is notice for paying deposit on account. After the process is complete, the cards are ready in two weeks.
Deposit status shows your balance each month. Basically, Capital One offers several options for deposit secured credit card up to $1,000. If you pay full minimum payment for five months, you can get more credit that means bigger deposit on account. Without deposit, the card will lose its function as credit card.
People often have difficulty to distinguish between secured credit card and prepaid debit card. The key factor is deposit that both have but with different purpose. On secured one, deposit is available to cover the cost and collateral. Lenders do not want cardholder for paying late fee and lost control for not paying anymore. Credit card is the loan; it means the money you get is from card issuer. As it mentioned above, you have to pay this debt including interest. That is why Capital One secured credit card deposit status becomes necessary to know.
On the other side, prepaid debit card uses money from deposit as source for spending it. You do not receive loan because every purchase comes directly from your own account. It makes limitation and card cannot be used to pay more than what you have. Prepaid debit is quite similar to regular debit card, except you have to limit what you spend from account.
The main purpose for having secured credit card is responsible spending. Capital One has risk when lending money without collateral. That is why the interest rate is bigger than other loans. However, you do not have to worry about Capital One secured credit card deposit status. There is no additional fee because the deposit keeps everything in check. Moreover, card owners have sense before spending more than what they pay as deposit.