Credit One Bank is a secured credit card issuer that charges fees most other banks do not
Credit One Bank operates a secured credit card product, meaning you deposit cash as collateral and receive a credit line equal to that deposit. The core problem: the bank charges an annual fee ($39 to $99 depending on the card), a monthly maintenance fee ($6 to $10.95), and a one-time processing fee ($29 to $75) just to open the account. You pay these fees upfront, before you use the card.
For comparison, many other banks offer secured cards with no annual fee, no monthly fee, and no processing fee. Capital One Secured Mastercard, Discover Secured Card, and Self Visa Secured Card all exist in the same market and charge significantly less. Credit One's fee structure means you lose money to the bank before you ever make a purchase.
The card itself reports to all three credit bureaus (Equifax, Experian, TransUnion), which is useful for building credit history. But the fees undercut that benefit. If you deposit $500 and pay a $75 processing fee plus $39 annual fee, you have already spent $114 of your own money on a card that gives you a $500 credit line.
Key Takeaways
- Credit One Bank charges processing fees ($29 to $75), annual fees ($39 to $99), and monthly maintenance fees ($6 to $10.95) on secured credit cards, while many competitors charge none of these.
- Your deposit sits as collateral, but you pay the bank to hold it, which reduces the actual benefit of building credit history.
- The card does report to all three credit bureaus, so it can help your credit score if you use it responsibly and pay on time.
- Credit One's terms allow the bank to raise fees on existing cardholders, and the company has faced multiple lawsuits over fee practices.
How the fee structure works against you
When you open a Credit One secured card, the bank charges you a processing fee immediately. This fee ranges from $29 to $75 depending on which card you choose. You pay this before the card arrives.
Then you pay an annual fee every year you hold the card. This is $39 to $99 per year. On top of that, most Credit One cards charge a monthly maintenance fee of $6 to $10.95 each month. Over a year, the monthly fee alone adds up to $72 to $131.40.
A $500 deposit with a $75 processing fee, $99 annual fee, and $10.95 monthly maintenance fee costs you $75 + $99 + ($10.95 × 12) = $75 + $99 + $131.40 = $305.40 in the first year. That is 61 percent of your deposit going to fees before you charge a single dollar.
Other secured card issuers do not charge monthly maintenance fees at all. Capital One charges no annual fee and no processing fee. Discover charges no annual fee and no processing fee. The difference in total cost of ownership is substantial.
Credit One's history of fee increases and legal disputes
Credit One has changed its fee structure multiple times, and the bank has the contractual right to raise fees on existing cardholders with 30 days' notice. This means a card you open at one price can become more expensive after you have already deposited your money.
The Consumer Financial Protection Bureau (CFPB) has received complaints about Credit One's practices. The company has faced lawsuits alleging deceptive marketing and unfair fee practices. In 2015, Credit One settled a lawsuit with the New York Attorney General's office over claims that the bank misrepresented the card's benefits and charged undisclosed fees. The settlement required Credit One to refund millions of dollars to cardholders.
These disputes do not mean Credit One is illegal or that you cannot use the card. It means the bank has a documented pattern of charging fees that consumers found confusing or unfair, and regulators have taken action. That history is worth knowing before you hand over your deposit.
When a Credit One card might still make sense
If you have no credit history and no other bank will issue you a secured card, Credit One will. The card reports to all three bureaus, so on-time payments do build your credit score. After 6 to 18 months of responsible use, you may be able to graduate to an unsecured card with lower or no fees.
If you are willing to pay the fees and you use the card actively (making small purchases and paying them off each month), the credit-building benefit may outweigh the cost. A higher credit score can lower your interest rates on mortgages, auto loans, and other borrowing, which saves you money over time.
But you should exhaust other options first. Call your current bank and ask if they offer a secured card. Check whether you may have access to for Capital One Secured, Discover Secured, or Self Visa Secured. Only choose Credit One if those doors are closed and you need a secured card urgently.
What happens to your deposit
Your deposit is held in a separate account and earns little to no interest. Credit One does not pay you interest on the money you deposit, or it pays a rate so low (often 0.01 percent or less) that it is meaningless. The bank keeps your deposit and uses it as collateral against your credit line.
If you close the account in good standing, the bank returns your deposit. If you default on the card (stop paying), the bank may apply your deposit to the balance you owe. Either way, the money you deposited is not working for you—it is working for the bank.
A high-yield savings account at another bank might pay 4 to 5 percent annual interest on the same deposit. That is a real opportunity cost of choosing Credit One. You lose not only the fees but also the interest you could have earned elsewhere.
How to compare Credit One to other secured cards
| Card | Annual Fee | Processing Fee | Monthly Fee | Minimum Deposit | Credit Line |
|---|---|---|---|---|---|
| Credit One Bank | $39–$99 | $29–$75 | $6–$10.95 | $300–$2,500 | Equal to deposit |
| Capital One Secured | $0 | $0 | $0 | $200–$2,500 | Equal to deposit |
| Discover Secured | $0 | $0 | $0 | $200–$2,500 | Equal to deposit |
| Self Visa Secured | $0 | $0 | $0 | $25–$2,000 | Equal to deposit |
The table shows the core difference: Credit One charges fees at every stage, while Capital One, Discover, and Self charge none. All four cards report to the credit bureaus and allow you to build credit history. The only reason to choose Credit One is if the other three reject your application.
Red flags in Credit One's terms and conditions
Read the fine print before you apply. Credit One reserves the right to charge a returned-payment fee if a check or ACH transfer bounces. The bank can also charge a late fee if you miss a payment. These are standard, but Credit One's versions are on the higher end of the market.
The card also has a relatively low credit limit cap. Most secured cards let you deposit up to $2,500 and receive a $2,500 credit line. Credit One's maximum is also $2,500, but the monthly fees eat into the value of that line faster than competitors.
Another concern: Credit One's customer service reputation. Online reviews and CFPB complaints mention difficulty reaching the bank by phone, slow responses to disputes, and confusion over fees. This does not mean the bank will not help you, but it means you may spend time on hold or in email chains if something goes wrong.
Frequently Asked Questions
Does Credit One report to the credit bureaus?
Yes, Credit One reports to Equifax, Experian, and TransUnion. On-time payments build your credit score. Late payments or defaults will also be reported and will hurt your score. The credit-building benefit is real, but it does not offset the high fees unless you use the card responsibly for at least a year.
Can I get my deposit back if I close the account?
Yes, if you close the account in good standing (no unpaid balance), Credit One will return your deposit. The process typically takes 5 to 10 business days. If you have an outstanding balance, the bank may apply your deposit to what you owe before returning any remainder.
Will Credit One raise my fees after I open the account?
Credit One can raise fees on existing cardholders with 30 days' written notice. This has happened in the past. You cannot prevent it, but you can close the account if the new fees are too high. Your deposit will be returned, though you will lose any credit-building progress if you close too soon.
What if I get denied by Capital One or Discover but approved by Credit One?
Open the Credit One card and use it responsibly for 6 to 12 months. Make small purchases and pay them off in full each month. After that history builds, you may be able to graduate to an unsecured card with lower fees, or you can apply to Capital One or Discover again with a better credit profile.
How much will Credit One cost me in the first year?
Total first-year cost depends on which card and deposit amount you choose. A $500 deposit with the standard card ($75 processing, $99 annual, $10.95 monthly) costs $305.40 in fees alone. A $1,000 deposit with the same fees costs the same $305.40, so larger deposits are slightly more efficient, but the fees remain high compared to competitors.