Credit One credit cards: Confusion for consumers

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Credit One Credit Cards: Confusion for consumers

Have bad credit and get confused about Credit One credit cards? It’s not you.

Written by Ellen Cannon Ellen Cannon is a former credit card writer for NerdWallet. She wrote about personal finance issues for more than 20 years at Bloomberg and Bankrate.com.

Nov 20, 2020

Written by Paul Soucy Lead Assigning Editor Credit scoring, credit cards Personal financial Paul Soucy leads the credit cards content team at NerdWallet. He worked as an editor for the Des Moines Register, USA Today and Meredith/Better Homes and Gardens for over 20 years. He later establishing an established freelance editing and writing practice. Editorial duties included The USA Today Weekly International Edition and received the highest honor from ACES: The Society for Editing. He earned a bachelor’s in journalism as well as a Master of Business Administration.

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Credit One has significantly overhauled its credit card offerings as well as its policies since this article was published. We’re in the process of updating.

The best word used to define the credit cards offered by Credit One is confusing .

When you begin the process of applying, you don’t know what type of credit card you’ll get — including important details like rates, fees and rewards, or even if you’re granted a .

If you make the payment in time, you don’t know whether it will be crediting your account in time enough to avoid a late fee. The company typically takes about a week to process payments, while many cardholders encounter difficulties paying online, according to about the Credit One submitted to the Consumer Financial Protection Bureau and the state regulators.

The credit card posted on the issuer’s website -an important source of information about every card — is a generic statement intended “for purposes of information only” on Credit One. You don’t get to see the exact terms until you qualify for a specific card.

The issuer’s name and logo are similar to those of better-known issuer Capital One, which has caused some customers to believe they were applying for a credit card from the latter.

Credit One markets credit cards to people who have less-than-perfect credit. To defend itself, the issuer claims that in order to provide credit cards to as many of these people with subprime credit as is possible, it has to do things differently from what you find with cards for higher-credit consumers. Fair enough however, the confusion is real so be aware and cautious when you apply for.

Credit One offers three types of credit cards:

Credit One Bank(r) Cash Back Rewards Credit Card

Credit One Bank(r) Platinum Visa(r) for Building Credit

Applications Prequalification is all about

A lot of credit card issuers permit the possibility of . With prequalification, you provide the basic details and then the issuer conducts a quick check to see whether you’re likely to get accepted for a credit card. Prequalification isn’t a factor in your credit score. Only a real application for credit produces the “hard inquiry” which can take the points from your credit score. However, prequalifying does not ensure that you’ll be granted credit. It’s similar to a “soft affirmative.”

Prequalification is optional with most issuers, but it’s an essential component in the Credit One application process. Prequalification is required to know the specific costs, rates and structure of rewards for the card you’ll be applying for. When you’ve read the terms, you decide whether to apply or not and then undergo the hard inquiry. The review of your application is more thorough than an “prequal” examination, meaning it is possible that you will be rejected, or you could be accepted for a different terms as compared to what you were approved for after prequalification.

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Why do they do it this way?

Credit One claims that this prequalification procedure safeguards consumers with subprime credit, who are least able losing points from their credit scores.

For example, say the issuer has three cards that have annual fees in the range of $99 $45 and zero. A person with bad credit might be able to get the $99 card, but not for the other twohowever, they’d likely apply for the $0 card first, then the $45 card and finally the $99 card as the last alternative. Their credit score will suffer the effects of three applications rather than one.

Credit One however, might offer a single card with the possibility of a dozen combinations of rewards as well as fees and rates. You apply once, and the issuer approves you for terms dependent on your creditworthiness. So there is a benefit but it also means there’s another hurdle to go through, and you don’t know what you’re getting (or likely to receive) until you’ve begun the application process, at which point you may be less likely to fail.

Rewards: Wait and see

Terms and Conditions stipulate that, based the credit score you have, you could be eligible for one of six cash-back rewards programs. Here are the possibilities:

Credit One Bank(r) Cash Back Rewards Credit Card and Credit One Bank(r) Platinum Visa(r) for Building Credit

Cash back of 1% on gas, groceries, mobile phone service, internet service and cable and satellite TV service.

Cashback of 1% on fuel, groceries or dining out purchases, mobile phone service, internet service and cable and satellite TV service.

1.1% cash back on eligible purchases.

Cashback of 5% for the first $5,000 for combined food, gas and mobile phone service. internet service, satellite and cable TV services as well as cash-back rewards of 1% on all other purchases.

NASCAR(r) Credit Card from the Credit One Bank(r)

Cashback of 1% on gas and automotive purchases and double cash back on NASCAR.com purchases.

Cash back 1% on all purchases. You can also earn double the cashback on NASCAR.com purchases.

The truth is it’s impossible to know what you’ll earn in cash back until you’ve received your card.

Rewards are automatically converted into a statement credit each month, which means that part is fairly straightforward.

Rates of interest: They’re okay

The interest rates mentioned on the “for purposes of information only” disclosure were 19.74 percent to 25.74 percent as of August 2018. If you have bad or poor credit, the interest rates that you’ll be charged on any credit card and loan will be higher than normal. Credit One’s rates are comparable with the rates on standard credit cards for bad credit.

Annual fees: Make your guess

Similar to other important characteristics of Credit One cards, the annual cost is a mystery until the issuer has you qualified to be a candidate for a credit card. The beginning of the year would be “between $0 and $75.” For the second year and beyond, that range expands to between $0 and $99. Following the initial year, your annual cost could be charged in monthly installments. However, it may not be.

Some Credit One credit card agreements -that are “real” the terms and conditions which ultimately apply to cardholders are contained in . At the time of writing, in August 2019, it listed 21 various combinations of APRs, annual fees and other card features. Again, the one that applies to you will be revealed only after you qualify for a card.

Nerdy Tip

For certain Credit One cardholders, the annual fee is paid in monthly installments, instead of all at once. That means they are required to pay the bill every month, even though they haven’t been using the card. This in turn increases the likelihood of not having a payment or paying late, especially considering the problems some cardholders experience with having their payment promptly credited which is discussed further below.

Here are a few additional fees you could be charged (we refer to them as “might” due to the fact that the “for purposes of information only” terms could be different from the terms of the card you’re ultimately accepted for):

Authorized user: $19 per year Authorized user must be at least 15 years old

Foreign transaction fee: 3% (minimum $1)

Cash advance: 5, or 8 percent of every cash advance, whichever is more or 10 or 3% of every cash advance, whichever is higher.

Late payment fee: up $37

Returned payment fee Up to $35

Credit limit increase fee from $0 to $49

Duplicate monthly statement fee 10 dollars

Request for receipts of sales For sale receipts: $6

Replacement card: $25

Balance transfer fee 5 percent or 8% on the amount transferred, which ever is greater (if the card is able to allow transfers at all)

Grace period: Who knows?

With most credit cards if you pay your total balance every month, you will automatically receive a — which means that you won’t be charged any fees on purchases up to your next payment due date. Pay in full each month and then you’ll never pay interest.

For Credit One cards Credit One cards, however it’s impossible to tell in advance when you’ll be granted a grace period. In the “for informational purposes only” terms the card’s terms include a section about “paying the interest.” It starts with “If your Account has a Grace Period …” That’s an enormous “if.” Then it goes on to explain that if your account has no grace period, you will have to pay interest on every purchase until the moment it’s posted into your bank account. Similar to the majority of important details about Credit One cards, you don’t know if you are eligible for a grace period until you make an application. Of 31 card agreements spelled out by Credit One as of August 2018, roughly half had a grace period.

Making payments: Confusion reigns

A NerdWallet investigation that was published in October 2018 revealed thousands of complaints about Credit One that, because of a loophole in federal law had not been made public to customers. The issue of payment is frequently mentioned in the complaints as well as in comments posted on other forums.

Customers report sending in a payment before the due date but then having Credit One fail to process the payment until it was “late.” In other instances, customers could not pay on Credit One’s website. Credit One website and were forced pay by phone or mail, incurring additional fees.

Credit One declined to comment on the findings of the investigation however, its policies regarding processing payments appear to verify the complaints. The majority of credit card companies will transfer a payment to the cardholder’s account instantly. Credit One says it will keep your money for several days until you deposit the equivalent of $10 to have it processed within the next day.

When will your credit card be creditable?

As with all credit cards you will have a balance on the Credit One card is made from your cash advances, purchases (if they are available) plus interest, and any fees that are applied. The minimum payment for Credit One cards is 5 percent of the amount. For the majority of credit cards, the minimum payment is between 1% and 3% on the amount.

After one billing cycle, Credit One cardholders may call Customer Service and choose their own due date so they are within six days of the date originally set. Cardholders may choose a different due date once every six months.

It appears that Credit One cardholders have to be extra careful about when they make the monthly payment. According to the “FAQs” section on the website states that you can choose between two options to pay bills “Standard payment” as well as “Express payment.” From there, things can get difficult:

If you choose Standard Payment, according to the FAQ “your money will be accessible in 5 (5) working days. However, you can only make payments through your Bank Account.” Five business days is a long time. Say your due date is the 15th day of the month and for a particular month, that 15th day falls on a Saturday. To avoid a late charge, you’d have to make your payment on the 7th day of the month (a Friday) in order to ensure that your payment would be posted within the “about five (5) business days” period. If you haven’t paid for eight days early, in other words it could have to be “late.”

If you choose Express Payment, your “funds will be accessible sooner (usually the next business day).” However, the fee for Express Payment is $9.95.

The language Credit One uses is peculiar. We’ve never seen an agreement for credit cards with wording about when “funds will become available.” That kind of language usually applies to bank account deposits, and we’re unable to be sure what it means in this instance. However, we believe it will indicate that the money will be posted to your account.

When does your available credit replenish?

But wait, there’s more! Each of the 21 cards agreements contained in the “real Terms and Conditions” document include this section:

To the extent that an amount of payment is less than the principal amount due for your card account a new credit will be available (subject to the limit of your credit) but only after 12 calendar days from receiving the transaction.

This suggests that regardless of the time you pay for your loan (on time or late, Standard, Express — you can’t have access to your entire credit line for nearly two weeks afterward. Let’s say your credit line is $500, and you’re at the limit. You pay off your balance — but you still can’t utilize your credit card for another 12 days.

To try to get clarification We tried calling to the “Application Information” number listed by Credit One however we were unable to reach the initial branch of the phone tree. This is because in order to ask a question regarding applying for a Credit One card, you must enter the 16-digit number for the Credit One card.

Consumer complaints

Credit One cards are issued by Credit One Bank of Las Vegas, which is a division of Sherman Financial Group, a private company based within Charleston, South Carolina.

In addition to the complaints to government agencies discovered by NerdWallet Payment problems are also commonplace in complaints about Credit One credit cards on the site. Many reviewers claim they attempted to pay their bill on the internet but they found that the Credit One website was not functioning. Or they made an online payments, and it wasn’t credited to the account on time and triggered a late fee. There are over 1,000 complaints about the company along with its support for customers Consumer Affairs.

Concerns regarding Credit One on also touch with issues with customer support, billing, and payment issues. From 129 reviews posted on Yelp in February 2017, 110 gave Credit One one of five stars.

The Better Business Bureau has not given Credit One a rating. Of the 112 reviews that were posted as of Feb. 2017 posted on the website of the southern Nevada BBB, three were labeled with a positive rating (although some reviews was sharply negative), three as neutral and the rest as negative. Of the 783 complaints that were reported on the website, 574 were identified as issues with billing or collection that include payment issues.

Credit protection: Expensive

Another benefit highlighted by Credit One is its “Credit Protection Program.” It’s an optional program that waives the minimum due payment for six months if the primary cardholder “involuntarily” is laid off or disabled. The cost for this benefit is 96 cents per hundred dollars of balance due. This is due each month following the time you have enrolled. For example, if you’re in the balance of $500 in one month and you’re enrolled in the program, it will cost you $4.80 that month; if your balance for the following month is $400, you’ll be charged $3.84 that month and so on.

Once you enroll in the program, you’ll have to go through a 30-day waiting period before you are able to activate the coverage. After activation, your account is closed and you are unable to use the card. Additionally, the minimum payment is waived, but interest will continue to accrue.

Additionally, Credit One has the option to terminate your enrollment if your account is more than 60 days late, your account is at least 20% over the credit limit, Credit One “no longer has control of the account,” you’ve committed fraud, or are involved in one the Credit One Bank’s debt management programs.

Other features: Decent

As a result , cardholders get the Visa travel accident insurance as well as car rental collision damage insurance. The cards also have Visa zero fraud liability, as well as the conditions and terms advise cardholders that they must notify of any fraudulent charges as soon as they become apparent. Although federal law limits cardholder liability to $50 for unauthorized charges, the Visa zero-risk liability assures you won’t be accountable for fraudulent charges.

The cards offer free credit scores, however you can obtain the credit score you want for no cost just about everywhere — . Some credit card issuers will offer you a score for free even when you’re not a cardholder.

You can choose among a range of options (23 on the reward card and 20 for the rebuilding credit card) to “personalize” your credit card, however there is a cost for this option. The fee isn’t disclosed within the conditions and terms that are available on the site.

Alternatives to better alternatives There are many

When you consider the unclear terms and other drawbacks to Credit One cards, you might be wondering why people are so eager to apply for them. One possible reason is that many people believe they’re applying for a credit card from Capital One. that Credit One’s swooshy logo actually predates Capital One’slogo, however confusion remains in the marketplace. Customers who have complained to the Consumer Affairs website mentioned this problem frequently.

credit One cards are targeted to those with poor credit, but better alternatives are available to people who have good credit or . Major issuers provide secured credit cards with higher rates, better terms, and assured grace periods. Secured cards require an upfront security deposit of $200 to $300. The process of putting that money together may be a challenge for some, but bear in mind that you get that money back when you close the account or switch to a regular , unsecure card. The charges that are charged to you by Credit One are not refunded.

For instance, the pays 2% cash back of up to $1000 on food and gas per quarter and 1% cash back on any other purchase. Plus, after you have been responsible with your card over the course of seven consecutive months Discover could review it in the hopes of changing it to an unsecured card. Additionally the annual cost is $0 .

You might also qualify to get a Capital One card, the . It is possible to get a 200 credit line with a minimum deposit of $49, $99 or $200 and pay the deposit in installments prior to the account is activated. You may gain access to a bigger credit line without having to put more money down , if you pay in time for as little as six months. There’s no annual cost.

If your credit score is fair or average, you could be eligible for the . This card is unsecured and offers unlimited 1.5 percent cash back on purchases for a fairly affordable annual cost.

If credit is not available the consumer may make poor decisions, such as applying for credit with a Credit One credit card without researching their options. Look around, and you can find better choices that have terms and conditions that are clear and clearly stated.

About the author: Ellen Cannon is a former NerdWallet writer, who specialized in credit cards. She was a journalist also editor with Bloomberg as well as Time Inc.

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