Credit One Cards from Credit One: Confusing for consumers

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Credit One credit cards: Confusing for consumers

Are you in a bad financial situation and are confused with Credit One credit cards? This isn’t you.

By Ellen Cannon Ellen is a former credit card writer for NerdWallet. She was a writer for personal finance for more than twenty years for Bloomberg along with 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 more than 20 years. He then built an established freelance writing and editing practice. He edited The USA Today Weekly International Edition and was awarded the top award by ACES: The Society for Editing. He earned a bachelor’s in journalism and a Master of Business Administration.

A majority of the items featured on this page are from our partners who pay us. This impacts the types of products we feature and where and how the product appears on the page. But, it doesn’t influence our evaluations. Our opinions are our own. Here’s a list of and .

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Credit One has significantly overhauled its credit card offerings as well as its policies since the article was written. We’re currently working on an update.

The most appropriate word to describe the credit cards provided from Credit One is confusing .

When you start the process of applying, you don’t know which type of card you’re eventually going to wind up with — including important details such as rates, fees and rewards, not to mention whether you’ll get a .

If you don’t make the payment in time however, you aren’t sure whether it will be crediting your account in time enough to avoid paying a late fee. The issuer often takes up to a week to process your payment however, many cardholders experience issues when they pay online, according to about credit One made an inquiry to Consumer Financial Protection Bureau and the state regulators.

The credit card on the website of the issueran important source of information on every card — is a general statement that’s intended “for solely informational purposes” on Credit One. It isn’t possible to read your actual terms until you’re able to get an individual card.

The logo and name of the issuer are like those of the well-known issues Capital One, which has caused some customers to believe they’re applying for a card from Capital One.

Credit One markets credit cards for people with less-than-great credit. To defend itself, the issuer claims that to offer 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. True, but the confusion is real, so beware and be cautious when you apply for.

Credit One offers three types of cards:

Credit One Bank(r) Cash Back Rewards Credit Card

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

Applications: It’s all about prequal

A lot of credit card issuers permit you to . Prequalification is when you submit certain information that the issuer then runs a quick check to see whether you’re likely to be approved for a card. Prequalification isn’t a factor in your credit score. Only a real credit application will trigger the “hard inquiry” that can knock scores off. Prequalifying doesn’t guarantee that you’ll eventually be granted credit. It’s like an “soft no.”

Prequalification is an option with the majority of issuers, but it’s an integral element in the Credit One application process. It is necessary to prequalify to know the specific fees, rates and rewards structure of the credit card you’re applying for. After you’ve seen the conditions, you have to decide whether to apply or not and then undergo the hard inquiry. The application review is more extensive than a “prequal” review, which means you may still be denied or approved for different card terms that you did not see upon prequalification.

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Why are they doing it in this manner?

Credit One claims that this prequalification procedure protects subprime consumers, who are the least likely to lose points from their credit scores.

For example, say an issuer offers three cards that have annual fees that range from $99 to $45 or zero. Someone with bad credit might be able to get the $99 card, but not for the other twoHowever, they’d probably opt for the card with a zero fee first, followed by the $45 card and finally the $99 card as a last option. Their credit score will suffer the effects of three applications rather than one.

Credit One, by contrast may provide a single credit card that has the possibility of a dozen combinations of rewards, fees and rates. It’s a single application, and the issuer approves the terms you want to use that are based the creditworthiness of your applicant. This is an advantage, but there’s also an additional hurdle to leap through. You don’t know what you’re getting (or likely to receive) until you’ve started the process of applying in which case you’re more likely to bail out.

Rewards: Wait and see

These terms and conditions state that based upon your creditworthiness you may qualify for one of 6 cash-back reward programs. These are the options:

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 food, gas and mobile phone services, internet service, satellite and cable TV.

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

Cash back of 1% on eligible purchases.

Cash back 5% on the first $5,000 a year when you combine spending on food, gas, mobile phone service, internet service, cable and satellite TV service, and cash-back rewards of 1% on any other purchase.

NASCAR(r) Credit Card issued by Credit One Bank(r)

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

Cash back 1% on all purchases and double the cashback on NASCAR.com purchases.

The bottom line is that it’s impossible to know what you’ll earn in cash back until you get your credit card.

The rewards are automatically redeemed for credits to your statement each month, so at least that part is fairly straightforward.

Interest rates: They’re OK

The interest rates mentioned in the “for informational purposes only” disclosure ranged from 19.74 percent to 25.74 percent in August 2018. If you’re in the middle or have poor credit, the interest rates you’ll pay on any card and loan will be on the high side. The rates offered by Credit One are in line with the rates on standard credit cards designed for people with bad credit.

Annual fees: Take a guess

Like other features as well as other features Credit One cards, the annual fee you’ll pay is a mystery until the issuer qualifies you for a card. Your annual fee the initial year is “between $0 to $75.” For the second year and beyond, that range expands to between $0 to $99. Following the initial year, your annual fee could be charged in monthly installments. However, it may not be.

Certain Credit One credit card agreements -which are “real” agreements and terms that eventually be applicable to cardholders are contained in . At the time of writing, in August 2019, it listed 21 different combinations of APRs, annual fees and other features. Also, the one that you are eligible for will be made public only once you qualify for a card.

Nerdy Tip

For certain Credit One cardholders, the annual fee is billed in monthly installments instead of being paid all at once. That means they are required to pay the bill every month, even though they’ve not been using the card. That, in turn, increases the chances of missing a payment or paying late due to the issues some cardholders experience with having their payment received in a timely manner, discussed below.

Here are some of the other charges you may have to pay (we refer to them as “might” because the “for solely informational purposes” conditions could differ from the terms on the card you’re ultimately authorized for):

Authorized user: $19/year; authorized user must be 15 years old

Foreign transaction fee: 3% (minimum $1)

Cash advance: 5 (or 8%) of each money advance, which is higher, or $10 (or 3%) of each cash advance, whichever is more

Late payment fee: up $37

Returned payment fee Up to $35

Increased credit limit fee from Zero to $49

Fee for duplicate monthly statements 10 dollars

Request for receipts of sales: $6

Card replacement: $25

Transfer fee for balance transfers: $5 or 8% on the amount transferred whichever is greater (if the card permits transfers in any way)

Grace period: Who knows?

On most credit cards, if you pay your balance in full each month, you automatically receive a — which means that you’ll not be charged charges on purchases until the next payment due date. Make sure to pay in full every month and then you’ll never be charged any interest.

When you use Credit One cards Credit One cards, however, you can’t tell upfront when you’ll be granted a grace period. In the “for informational purposes only” conditions the card’s terms include a section about “paying an interest.” It starts by saying “If your Account has grace period Grace Period …” That’s an enormous “if.” It goes on to say that when your account is not subject to a grace period, you’ll be charged interest on each purchase until the moment it is posted to your account. Similar to the majority of important details regarding Credit One cards, you will not know if you have any grace periods until you apply. In the 31 credit card agreements laid out by Credit One as of August 2018, around half of them were grace periods.

Making payments: Confusion reigns

A NerdWallet investigation released in October 2018 found thousands of complaints about Credit One that, because of a loophole in federal law, was not visible to consumers. The issue of payment is frequently mentioned in those complaints, and also in the comments posted on other forums.

Consumers describe sending in payments prior to the due date, only to have Credit One fail to process the payment until it was “late.” In other cases, the customers could not pay on the Credit One website and had pay via phone or by mail, resulting in additional fees.

Credit One declined to comment on the findings of the investigation, however, its policies regarding processing payments seem to confirm the claims. Most credit card issuers will transfer a payment to the cardholder’s account instantly. Credit One says it will hold onto your payment for a few days unless you chip in an amount of nearly $10 to have it processed within the next day.

When will your credit card be creditable?

As with any credit card, the balance on the Credit One card is made up of purchases, cash advances (if there are any) plus interest, and any other fees charged. The minimum amount you pay on Credit One cards is 5 percent of the amount. For the majority of credit cards the minimum amount is between 1% and 3% of the balance.

After one billing cycle, Credit One cardholders may call Customer Service and choose their own due date as long as it’s within six days prior to or following the date originally set. Cardholders may choose a different due date once every six months.

It appears there is a requirement that Credit One cardholders have to be extra careful about the way they pay each month’s payments. The “FAQs” section of the website says you have two options for paying the bill “Standard Pay” as well as “Express Pay.” From there, things can get tricky:

If you choose Standard Payment, according to the information in this FAQ “your cash will appear available in about five (5) working days. However, you may only pay with your Bank Account.” Five business days can be a challenge. Say that your due date falls on the 15th day of the month and in a given month this date falls on a Saturday. To avoid a late fee it is recommended to pay your payment on the 7th of that month (a Friday) in order to ensure that your payment would be posted within the “about five (5) business days” period. Unless you paid eight days early or, more precisely, you could be “late.”

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

Even the language Credit One uses is peculiar. We’ve not seen a credit card agreement with specific language about when “funds will become accessible.” That kind of language usually applies to bank account deposits, so we can’t know what it refers to in this instance. But we assume it indicates that the money will be posted into your bank account.

When will your credit refresh?

But wait! There’s more! Each of the 21 card agreements in the “real Terms and Conditions” document includes this clause:

If the payment decreases the principal amount due for your card account a new credit will be made available (subject to your credit limit), but only after 12 calendar days after our receipt of the payment.

This suggests that regardless of when you pay for your loan — on time in the past, late, Standard or Express, etc. — you will not be able to access your total available credit line for two weeks following the payment. Let’s say your credit line is $500 and you’re at the limit. You’re able to pay off the balance — however, you’re unable to use your card for 12 more days.

To get clarification, we tried calling the “Application Information” number that is provided by Credit One however, we could not get past the first branch of the telephone tree. That’s because for a person to inquire regarding applying for the Credit One card, you must enter the 16-digit number for the Credit One card.

Consumer complaints

Credit One credit cards can be purchased from Credit One Bank of Las Vegas, which is a subsidiary to Sherman Financial Group, a private company with its headquarters within Charleston, South Carolina.

Alongside the complaints to government agencies uncovered by NerdWallet Payment problems are also commonplace in complaints regarding Credit One credit cards on the website. Many reviewers say they tried to pay the bill on the internet but they found that the Credit One website was not functioning. Or they made a payments, and it wasn’t debited from the account in time and triggered a late fee. There are more than 1,000 complaints about the business along with its support for customers Consumer Affairs.

The complaints about Credit One are also centered on issues with customer support, billing, and payments issues. From 129 reviews posted on Yelp at the time of the month of February, 110 gave Credit One one five stars.

The Better Business Bureau has not given Credit One a rating. Of 112 reviews as of February 2017 , on the website from the Southern Nevada BBB, three were labeled with a positive rating (although some reviews was sharply negative) three were classified as neutral and the rest as negative. Of 783 complaints logged on the website, 574 were identified as related to billing or collection, which includes payment problems.

Credit protection: Expensive

Another benefit highlighted as a benefit by Credit One is its “Credit Protection Program.” It’s an option that allows you to waive the minimum payment due for six months in the event that the cardholder “involuntarily” goes out of work or becomes disabled. The cost for this benefit is 96 cents for each 100 of the balance to be paid. You pay this every month following the time you have enrolled. For example, if you’re in the balance of $500 in one month enrolling in the program will cost you $4.80 for the month; and if your balance in the following month is $400 then you’ll be charged $3.84 the following month, and so on.

After you’ve signed up to the program, there is a 30-day waiting period before you’re eligible to activate its coverage. Once you’ve activated, your account is closed and you can’t use the card. Additionally, the minimum amount of payment is waived but interest will continue to accrue.

Additionally, Credit One has the right to cancel the enrollment of your account if it is more than 60 days late, your account is 20% or more over your limits of credit, Credit One “no longer is the owner of the account” you have committed fraud, or you’re in one or more of Credit One Bank’s debt management programs.

Other features: Excellent

As a result cardholders, they get Visa travel accident insurance as well as car rental collision damage insurance. Additionally, the cards come with Visa zero fraud liability, and the terms and conditions warn cardholders to notify any unauthorized charges within a few hours. The law in the United States limits cardholder liability to $50 in the event of unauthorized charges, the Visa zero fraud liability ensures that you are not liable for fraudulent charges.

The cards provide free credit scores, but you can get an credit score at no charge almost everywhere -and . Certain credit card companies will give you a free score even in the absence of a card.

You can select among a range of options (23 to get the rewards credit card, 20 for the rebuilding-credit card) to “personalize” your credit card, but you may pay a fee for that option. The fee isn’t disclosed in the terms and conditions that are available on the website.

Alternatives to better alternatives Better alternatives: Many

When you consider the unclear terms and other disadvantages of Credit One cards, you may wonder why so many people sign up for the cards. One answer might be that many people believe they’re applying for a credit card from Capital One. That logo, which is swooshy, from Credit One actually predates Capital One’s, however, confusion persists in the marketplace. Consumers who complained to the Consumer Affairs website mentioned this frequently.

Credit One cards are targeted at people with less-than-good credit, however better options are available for people with or . Major issuers offer secured credit cards with more favorable terms, less fees and assured grace periods. Secured cards require an initial security deposit of at least $200 to $300. The process of putting that money together may be difficult in some cases, but bear in mind that you’ll get the money back when you close the account or change to a regular unsecured card. The charges that are charged to you by Credit One are not refunded.

For example, the rewards program offers 2% cash back up to $1,000 on restaurants and gas per quarter and cash back of 1% on all other purchases. Additionally, after having managed your card responsibly for seven months, Discover could review it in the hopes of changing it to an unsecured card. Additionally the annual fee, it’s $0 .

You might also qualify for a genuine Capital One card, the . You can get a $200 credit line with a deposit of $49, $99 or 200 and you could make the deposit in installments before opening your account. You could be able to access a larger credit line without putting more money down if you make payments on the timeframe of six months. There’s no annual cost.

If your credit is normal or fair, you could qualify for the . This unsecured card offers an unlimited 1.5 percent cash back on purchases for a fairly low annual fee.

When credit isn’t available consumers are prone to make bad choices, such as applying for the Credit One credit card without doing their homework. If you look around, you can find better choices that have terms and conditions that are clear and clearly stated.

The author’s bio: Ellen Cannon is a former NerdWallet writer covering credit cards. She has been a writer as well as an editor for Bloomberg and Time Inc.

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