It’s easy to mistake Credit One for Capital One. With similar names, logos, prequalification offers and options for rebuilding credit, these two credit card issuers have a lot in common. But Capital One stands out with a diverse range of credit cards, including high-end rewards options, while Credit One generally focuses on cards for customers who are rebuilding credit. Let’s look into how Credit One and Capital One stack up.
[Read: Best Credit Cards.]
What Is Credit One?
Credit One Bank is a financial services company that offers credit cards and banking products. It’s best known for offering unsecured and secured credit cards to customers who are rebuilding credit. All of Credit One’s cards earn at least 1% cash back on qualifying categories.
“Credit One typically focuses on the subprime segment, where the customers are looking for access to credit,” says Sameer Gupta, CEO of credit card optimization tool Uthrive and former director of product innovation for American Express.
What Is Capital One?
Capital One is a major financial institution with various products, ranging from checking accounts to loans and credit cards. It’s well known for its diverse portfolio of credit cards, from student and secured cards for building credit to high-end travel rewards cards.
“Capital One definitely has lower-end credit products for people with less-than-great credit,” says Dave Grossman, founder of MilesTalk and Your Best Credit Cards. “But Capital One has a huge breadth of cards. While they have historically focused on the lower-credit consumer and have a lot of cards that cater to that, they’ve put a lot more effort into the middle and premium market targeted to people with high credit scores.”
Credit One vs. Capital One: Rewards
While all of Credit One’s cards earn cash back, Capital One doesn’t offer rewards on every card. However, Credit One rewards earning is usually limited to particular categories, such as gas, groceries and telecom purchases. On Capital One cards that offer rewards, you’ll earn unlimited rewards on every purchase.
Credit One cards all earn cash back, even cards for rebuilding credit. For example, Credit One Bank® Visa® Cash Back Rewards earns 1% cash back on eligible gas and grocery purchases and mobile phone, internet, cable and satellite TV services. However, you’ll pay a $39 annual fee for this card.
Generally, the better your credit, the more rewards you can earn with Credit One. Customers with good to excellent credit may qualify for the Credit One Bank® Platinum Rewards Visa with No Annual Fee, which earns 2% on eligible gas and grocery purchases and mobile phone, internet, cable and satellite TV services. Notably, it doesn’t earn cash back on everything — just those particular 2% categories.
“If you’ve got even slightly above average credit, the very least you should be able to earn is 2% cash back on everything,” says Grossman. That’s tough to find with Credit One, but Capital One has 2% or higher cards in its portfolio.
Not all of Capital One’s cards earn rewards, though you can earn higher rewards rates with Capital One cards. The Capital One Platinum Secured Credit Card, for example, does not earn rewards, but it’s available with no annual fee for customers with bad to fair credit (See Rates & Fees).
On the other end of the spectrum is the Capital One Venture X Rewards Credit Card, which earns 10 miles per dollar on hotels and rental cars booked through Capital One Travel, 5 miles per dollar on flights with Capital One Travel and 2 miles per dollar on all other purchases.
[Read: Best Rewards Credit Cards.]
Credit One vs. Capital One: Fees
Expect to pay an annual fee on most cards with Credit One, though you may be able to avoid one if you have great credit. In contrast, Capital One has a wide portfolio of no-annual-fee cards. Capital One cards with an annual fee generally offer rewards or benefits designed to give cardholders enough value to offset the fee.
Most of Credit One’s cards require an annual fee. Credit One customers with excellent credit may be offered a no-annual-fee card. The Credit One Bank Secured Card is an exception with no annual fee for customers with rebuilding credit, but you’ll need to put down at least $200 as a security deposit to open the card.
You’ll generally pay at least a $39 annual fee for Credit One cards, though annual fees can be as high as $99. For example, the Credit One Platinum Visa for Rebuilding Credit has a $75 annual fee in the first year and after that, a $99 annual fee billed monthly at $8.25 per month.
Capital One has numerous no-annual-fee cards ranging from secured cards to travel rewards cards. For example, you can get the Capital One Quicksilver Secured Cash Rewards Credit Card with no annual fee if you put down a $200 security deposit (See Rates & Fees). The Capital One VentureOne Rewards Credit Card has no annual fee and earns 1.25 miles per dollar on all purchases except hotels and rental cars booked through Capital One Travel, which earn 5 miles per dollar (See Rates & Fees).
You may pay an annual fee as high as $395 with Capital One. That’s the fee for the Capital One Venture X Rewards Credit Card, which offers extensive travel rewards and benefits. Although you’ll pay close to $400 yearly to use this card, there’s a $300 annual travel credit and an up to $100 credit for Global Entry or TSA PreCheck (See Rates & Fees).
Credit One vs. Capital One: Sign-Up Bonuses
There’s no way to earn a sign-up bonus with Credit One’s cards, but many of Capital One’s cards offer sign-up bonuses in cash back or miles.
None of Credit One’s cards offers a sign-up bonus, though some offer higher cash back earning in limited amounts. For example, with the Credit One Bank® Platinum Rewards Visa, you can earn 5% cash back on the first $5,000 you spend on eligible gas, grocery, internet, cable, satellite TV and mobile phone service purchases each year.
Capital One offers generous introductory offers on many cards ranging from travel rewards cards to cash back cards. You’ll earn 75,000 bonus miles with the Capital One Venture Rewards Credit Card after you spend $4,000 within the first three months of opening an account. Ongoing rewards include earning 2 miles per dollar on every purchase, with no caps. Even basic Capital One cash back cards generally include an intro offer, such as the Capital One Quicksilver Cash Rewards Credit Card, which earns a $200 cash bonus after you spend $500 in the first three months. Ongoing rewards include earning 1.5% cash back on every purchase, with no limits.
[Read: Best Sign-up Bonus Credit Cards.]
When Should You Choose Credit One?
Capital One cards are superior to Credit One in practically every way, offering cards with no annual fees, sign-up bonuses and no foreign transaction fees, in a wide variety of card types and with higher customer satisfaction ratings. While Credit One has strengths in offering prequalification that doesn’t affect your credit score and has cards designed for building credit, Capital One has those same features.
“With Capital One, you’re at least building your history with that bank, so even if you’re going for a credit-builder card, I would rather go with one of the name-brand issuers,” says Grossman.
That said, Credit One might make sense for you if you can’t get approved for a Capital One card. Maybe you have a bad history with Capital One cards or don’t meet credit requirements. Or a particular Credit One card might have features Capital One doesn’t, like the Credit One Secured Card that earns interest on your security deposit.
Ultimately, as you choose between credit cards, it’s a good idea to prequalify, especially if you’re in the process of rebuilding credit, says Gupta. “It increases your chances of approval while increasing visibility of what you’re likely to get.”
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Credit One vs Capital One: What’s the Difference? originally appeared on usnews.com
