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Credit One Bank Review: Average Credit Welcome But Complicated Terms

The information related to the Chase Freedom Unlimited credit card has been collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card.

Credit One Bank (not to be confused with Capital One Bank) specializes in credit card products that come with free credit score monitoring and cash back rewards perks. The Credit One Bank product line also includes credit-building cards that you can qualify for with less-than-perfect credit.

The potential drawbacks of choosing a Credit One Bank credit card are the fees and conditions that can apply to your account, depending on your creditworthiness.

Credit One Bank Credit Card Terms

Currently, Credit One Bank offers three main credit cards including the Cash Back Rewards Visa, the Platinum Visa for Rebuilding Credit, and the Official NASCAR Visa.

However, the account terms for each card above including the interest rate, annual fee, and rewards program varies, depending on your creditworthiness. This means Credit One Bank will take a look at your credit history and income before offering your credit card terms and conditions.

There are 26 available credit card agreements you may be offered by Credit One Bank after applying. You can find them here. Fortunately, you can prequalify to review which specific terms you will receive, and the good news is this prequalification won’t impact your credit score.

Interest Rates, Fees, and Fine Print

Credit One Bank does provide an easier to read terms-and-conditions disclosure document with a range of the possible fees, interest rates, and terms you may encounter as a cardholder. You can find the condensed terms and conditions here.

We’ve also put together a quick overview of the facts:

  • The minimum credit line is $300
  • Variable interest rates start at 15.90% to 24.40% APR when you open an account
  • Accounts may or may not have a payment grace period
  • The annual fee ranges from $0 to $75 the first year
  • The annual fee after the first year is $0 to $99
  • If you add on an authorized user, the fee is $19 annually
  • The late payment fee is up to $37
  • The returned payment fee is up to $35

As you can see from the terms above, the cost of borrowing from Credit One Bank can vary greatly, specifically when it comes to the annual fee. You can pay no annual fee at all or up to $75 the first year and $99 for each following year. That’s no small amount of money.

For the first year, the annual fee is charged to your account right away. This means when you first receive the card the annual feel will be subtracted from your available credit line. After the first year, the annual fee may be charged all at once or split into 12 monthly payments.

The payment grace period

Another area besides fees to draw attention to is the payment grace period. The account you qualify for may or may not have one.

A payment grace period is a certain amount of days that credit card issuers give you to pay the bill before applying interest. Credit cards that don’t have a grace period begin charging interest on the day the purchase hits your account. For example, if you were to buy a nice, new couch on a credit card today, interest would start applying to that purchase today.

Again, terms vary, depending on creditworthiness, so it’s possible you can get the best terms that Credit One Bank has to offer, including the lowest possible interest rate, no annual fee, and an account with a payment grace period. But you should be aware of the most expensive scenario.

Cash Back Rewards and Card Benefits

Credit One Bank offers five cash back rewards programs and a few additional card benefits.

There are three cash back programs that reward you for everyday spending like gas, groceries, and dining, and two other programs that reward you for auto and NASCAR.com related purchases.

Here are the the five rewards programs:

Cash Back Rewards Program

  • 1% cash back on eligible gas, groceries, mobile phone service, internet service, and cable and satellite TV service; OR
  • 1.1% cash back on eligible dining purchases and 1% cash back on all other eligible purchases; OR
  • 1% cash back on all eligible purchases.

NASCAR Cash Back Rewards Program

  • 1% cash back on eligible gas and automotive purchases, double cash back on NASCAR.com purchases; OR
  • 1% cash back on all eligible purchases, double cash back on NASCAR.com purchases.

If you qualify for a cash back program, the cash back that you earn each month will be credited to your account statements. The cash back credited to your account doesn’t count as a payment, so you’ll need to make your regular minimum payment to keep your card in good standing.

Additional card benefits

As mentioned, free credit score tracking and a credit report summary are included. Visa Zero Fraud Liability is another benefit and means you won’t be held responsible for unauthorized purchases on your Visa account if you report them in a timely manner.

How to Prequalify for Credit One Bank Credit Cards

On the Credit One Bank website, you can prequalify for a card without a hard inquiry. You just need to type in your address, Social Security number, birthdate, and income.

Make sure to read through the terms you receive after prequalification for the interest rate, the fees, and whether you get a payment grace period before thinking about moving forward with the full application.

The Cost of Using a Credit One Bank Card

So, what’s the cost? That’s always the most important question.

Taking a look at the cost of cash back rewards first, the interest rate range offered by Credit One Bank is slightly higher than other rewards cards with similar cash back offers.

Here are a few cash back alternatives with lower interest rates and no annual fee:

  • The Citi Double Cash offers 2% cash back and interest from 13.49% to 23.49% APR with no annual fee
  • The Chase Freedom Unlimited offers 1.5% cash back and 0% intro APR for 15 months from account opening on purchases and balance transfers. After that, 15.49%–24.24% variable APR. There is no annual fee.
  • The Quicksilver from Capital One offers 1.5% cash back and 0% intro APR for nine months; 13.49%-23.49% variable APR after that. There is no annual fee.

For the most part, the cheaper cash back rewards cards listed above are also ones that require decent credit, which may be a reason why you would try applying with Credit One Bank instead.

However, Credit One Bank cards can come with fees you need to be mindful of before thinking they’re an ideal alternative. You may qualify for Credit One Bank with less-than-perfect credit, but the catch is you may also get approved for less-than-desirable credit card terms like high interest and a high annual fee.

Example of what it costs to borrow

To analyze the cost of borrowing from Credit One Bank, let’s take the terms and conditions of the very first card that appears on the Credit One Bank account agreement list. (You can find it again here.)

This card has:

  • 24.15% variable APR
  • $75 annual fee the first year
  • $99 annual fee the following years
  • No payment grace period
  • 1% cash back on gas and grocery spending

If you charge $500 of furniture to this card as soon as you get it, it’ll cost you about $62 in interest to pay the balance off in 12 months with regular payments of $51 per month.

The exact interest cost will vary, depending on interest rate fluctuations and when you make the purchase during the month. (Remember, there’s no grace period.)

Payment Interest Principal
$51 $10 $459
$51 $9.23 $417.23
$51 $8.39 $374.62
$51 $7.53 $331.15
$51 $6.66 $286.81
$51 $5.77 $241.48
$51 $4.86 $195.34
$51 $3.93 $148.27
$51 $2.98 $100.25
$51 $2.02 $51.26
$51 $1.03 $1.29

In total, you would pay about $137 (interest plus the $75 annual fee) to borrow $500 during your first year as a cardholder. The next year, you also have another $99 in annual fees ($8.25 per month) to look forward to paying before even swiping your card on new purchases.

From this example, you can see fees play a big role in costs and are a factor you want to measure if you prequalify for a Credit One Bank credit card.

Another caveat to this is if you planned to use this card for cash back specifically, you would need to pay off your balance the same day you make a purchase. Otherwise, interest charges from having no grace period can eat away at the cash back earned.

Other Ways to Borrow Money and to Build Credit

The big advantage of Credit One Bank is that you can prequalify without a hard inquiry so it doesn’t hurt to find out what terms you will receive. There are a few other credit card issuers that offer the same convenience. If you’re not sure whether you can qualify for cards with lower fees, you can search for providers that offer prequalification here.

To build or rebuild credit, you can also turn to store cards or secured cards. Learn more about how to build credit with a secured card here. It’s worth mentioning that not all store cards and secured cards are cheap either. You need to review the fees and interest rates to find the most affordable option just like you would with the Credit One Bank accounts.

Finally, if your focus is solely getting your hands on cash, a personal loan may offer you a better deal when you need to borrow money than a credit card. You can also prequalify for personal loans without impacting your credit score. You can shop for personal loans here.

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