NOTE TO EPINIONS READERS... IN RESPONSE TO MY PREVIOUSLY PUBLISHED OPINION TITLED "CENTS AND SENSIBILITY", CAPITAL ONE TOOK IMMEDIATE, DECISIVE CORRECTIVE ACTION. I HAVE DELETED THAT OPINION AS IT NO LONGER ACCURATELY REFLECTS MY EXPERIENCE WITH THIS BANK. MY NEW OPINION FOLLOWS.

As you may know, secured credit cards are often touted as tools used to repair damaged credit histories. Properly used, they can do so, but a lot also depends on the bank involved. Generally, the bank will require a small initial deposit - Capital one's is $50.00 - which they will use to "secure" your line of credit - in my case $300.00. This deposit generates interest at a rate of 2.75%, which is compounded and offsets your APR a bit. If you default on your payments, the bank takes your deposit and pursues you for the balance.

I wasn't a deadbeat by any means, but I had gotten behind on some student loans. I knew I had to get my credit back on track now that my income had increased, or I would never qualify for a mortgage or a car loan. Capital One's offer seemed reasonable enough, and I recall having the card in hand very shortly afterward. I began using it and was a model citizen - carrying a small balance at first, then paying it off in full each month.

One problem I encountered initially was fees - specifically, late and overlimit fees. I generally sent my payments in via FedEx from my office, so I could track and make sure they got there on time. This did not stop them from charging late fees. I would call customer service, and after protracted explanations, the fees were removed. I also was charged overlimit fees. A bank rep. explained that they allowed customers to go over limit "as a courtesy" - but then would charge an overlimit fee of $25.00! Again, these fees were removed, but it took several tries before they coded my account to decline purchases that would put it over - at my request.

Compounding my annoyance with this was the practice of the customer service reps trying to sell "credit protection" while I was trying to resolve a fee issue. There are two kinds - one is a disability insurance type which takes over your payments in the event you can't make them. This isn't very good - if you aren't working, and the policy is only making minimum payments, it will take forever to pay off the balance. The other is fraud protection, which covers you in the event that your card is lost or stolen and charges are made without your authorization. What they don't tell you is that under federal law, you are only liable for the first $50.00 of unauthorized charges, and most banks won't even charge you that. I don't recommend them, and I frown on the practice of trying to sell these products while I'm trying to get an illegitimate fee adjusted.

At one point, I made an online purchase, and someone hacked my account, making 2 $40.00 purchases. Here, Capital One's staff excelled. They removed the charges after a speedy investigation, and responded in writing to advise me of what they were doing. I would have been interested to know if they caught the person that did it, but at least my account was clear.

Despite an impeccable payment history, Capital One did not raise my limit on the secured card. Instead, they offered me an unsecured Mastercard, which was swiftly upgraded to Gold status. Here, though is the most important part of this opinion... - drum roll, please...-

In February, I published a rather snarky opinion detailing my legitimate issues with Capital One's secured card, and concluding they were "nothing special". A bank executive actually took the time to read it, and sent me a letter addressing each and every concern I had raised. Despite the snide tone of my posting, this letter was professional and comprehensive. The bank executive lowered my interest rate by several points as well. I can tell you, this significantly altered my impression of this bank. Further, when I called to inquire about the limit on my secured card, I was offered several choices, including canceling the account and raising the limit on my unsecured card. This is what I chose.

Two and a half years after I got the secured card with a $300.00 limit and a 23.9% APR, I have an unsecured card with a $2000.00 limit and a 13.9% APR. Yes, I used it responsibly. But Capital One did their part too.

I am VERY impressed.

Recommended: Yes