Capital One® Platinum Credit Card: Should You Get It?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer.

Everyone has to start somewhere. It’s an axiom that applies to a lot of things, including credit cards. With a nosebleed-inducing APR of 26.99% (Variable) the Capital One® Platinum Credit Card may not seem attractive for many consumers. Still, for those with mediocre credit, or those who are just beginning to build a credit history, the Capital One® Platinum Credit Card offers a few features worth considering, but is one that you wouldn’t want to revolve a balance on.

For starters, the Capital One® Platinum Credit Card offers a $0 annual fee and no balance transfer fee (by contrast, many other cards charge 3% to 5% to move a balance from another card). Also, someone with an average or fair-at-best credit score stands a good chance of qualifying for this card. If you pass that threshold and you keep up your monthly payments, you could upgrade to another card with lower rates, rewards points and other perks.

For dinged-up credit, a way to make repairs with no annual fee

Financial difficulties happen, whether because of a job loss, a medical emergency, a natural disaster or another reason. For people who may have struggled to pay their bills and had their credit score suffer, the Capital One® Platinum Credit Card could be an option to get back in the good graces of the credit bureaus. The same applies to a young adult with no credit history at all.

With no annual fee, this card could be a handy tool to rebuild your credit for free. Your initial credit limit will probably be small, so a prudent course would be to use less than 30% of that limit, make small, regular charges and pay off the full balance every month by the due date. The Capital One® Platinum Credit Card's onerous annual percentage rate, at 26.99% (Variable), makes this card a dubious choice to carry any balance for any amount of time. In September, average APRs for U.S. credit cards were about 17.40%.

As an individual’s financial situation improves and they demonstrate they can pay their bills on time, there may be an option to upgrade to a better Capital One product, such as the Capital One® Quicksilver® Cash Rewards Credit Card.

Low initial credit limit, but prospects for upside

An individual’s starting credit line with Capital One® Platinum Credit Card will probably be relatively paltry: $300 is fairly standard for a consumer with limited credit.

However, the Capital One® Platinum Credit Card is part of the “Credit Steps” program, which means an individual has the potential to boost their credit limit, so long as make your first five monthly payments on time. How much of a boost? Hard to say for sure, but some Capital One® Platinum Credit Card cardholders have seen increases of around $500.

Additionally, and as with all Capital One credit cards, the Capital One® Platinum Credit Card offers users access to the Capital One® CreditWise® service which allows them to monitor their credit scores. If you’re trying to rebuild your credit, CreditWise is a handy way to track your progress (similar services are available with other cards).

Some travel benefits, including no foreign transaction fees

If you’ve used a credit card outside the U.S., you may be familiar with foreign transaction, or FX, fees, surcharges on your bill when you make a purchase routed through a foreign bank or in a currency other than the U.S. dollar. FX fees, commonly around 3%, can sneak up on consumers because these fees are not well understood and often buried in the terms and conditions of your credit card agreement.

With the Capital One® Platinum Credit Card, you won’t be assessed FX fees, making it easier to use the card abroad in part because you won’t have to deal with converting your currency.

If you have a Capital One® Platinum Credit Card, you’re also eligible for travel accident insurance and you can get automatic insurance for a covered loss at no extra charge when you use your credit card to purchase airfare.

Not a rewarding experience

If you don’t have good or excellent credit, it’s difficult to get a credit card that offers rewards with relatively low or no annual fees. That’s just the way it is. Again, the Capital One® Platinum Credit Card does not allow you to generate rewards points, but other Capital One cards do.

ValuePenguin's Verdict: Decent option for lower-credit consumers, but if you can do better, do so

If you have a spotty credit history, or no credit history, the Capital One® Platinum Credit Card is worth considering, and it’s a good way to build a credit record without paying an annual fee.

Capital One does have a few restrictions on card approval. For example, you will not be approved if you have another Capital One card with a past due amount or an over-the-limit balance; if you have two or more open cards with Capital One or one that was charged off in the past 12 months.

But as is the case with any credit card, it’s important to go in with eyes wide open, recognize the high APR on this card from the get-go, stay diligent about making payments and not get in over your head. If and when you can get approved for a lower-rate card and can use it responsibly, by all means, do so.

Alternatives to the Capital One® Platinum Credit Card

To get a handle on whether the Capital One® Platinum Credit Card is worth it, it helps to step back and assess what else is out there. Below are a few comparisons against similar cards:

Capital One® Secured Mastercard®

Aimed at people with the lowest credit scores, the Capital One® Secured Mastercard® requires a security deposit to be put down at application. The Capital One® Secured Mastercard® has an APR of 26.99% (Variable) and charges a $0 annual fee.

Take note: The Capital One® Secured Mastercard® cannot be upgraded to a different card, which means even after you get a bump up in your credit score, you may not have much use for this card. The card currently offers a refundable, minimum-security deposit of $49, $99 or $200 (note, you’ll need access to an authorized bank account to make your security deposit).

Discover it® Secured

The Discover it® Secured has a potential for rewards’ perks.

With the Discover it® Secured, you can establish your credit line by providing a refundable security deposit of at least $200 after being approved (you must provide your bank information when you submit your deposit). After eight months, Discover begins automatic reviews to determine if you can transition to an unsecured line of credit and have your deposit returned.

The Discover it® Secured also holds potential for rewards benefits. Discover will automatically match all the cash back you’ve earned at the end of your first year, and the card also offers 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases every quarter, plus unlimited 1% cash back on all other purchases.

Discover it® Student Cash Back

Many college students face a conundrum: their ID indicates they’re (legally) adults, but credit card companies don’t always treat them that way. The Discover it® Student Cash Back offers a path for credit “rookies” looking to start their journey in the grown-up credit card world.

Most credit cards aimed at students have limited rewards programs, or none at all.

At the end of your first cardmember year, Discover will automatically match all cash back you’ve earned. How are your grades? If your GPA is 3.0 or higher, you can get a $20 statement credit every enrolled school year for as long as five consecutive years.

Joe Resendiz

Joe Resendiz is a former investment banking analyst for Goldman Sachs, where he covered public sector and infrastructure financing. During his time on Wall Street, Joe worked closely with the debt capital markets team, which allowed him to gain unique insights into the credit market. Joe is currently a research analyst who covers credit cards and the payments industry. He earned a bachelor’s degree from the University of Texas at Austin, where he majored in finance.

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How We Calculate Rewards: ValuePenguin calculates the value of rewards by estimating the dollar value of any points, miles or bonuses earned using the card less any associated annual fees. These estimates here are ValuePenguin's alone, not those of the card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer.

Example of how we calculate the rewards rates: When redeemed for travel through Ultimate Rewards, Chase Sapphire Preferred points are worth $0.0125 each. The card awards 2 points on travel and dining and 1 point on everything else. Therefore, we say the card has a 2.5% rewards rate on dining and travel (2 x $0.0125) and a 1.25% rewards rate on everything else (1 x $0.0125).