Is Credit One a Good Bank?

FT Contributor  | 

What Is Credit One Bank?

Credit One Bank is a financial institution that specializes in providing credit cards to consumers. The bank offers a wide variety of credit cards, many of which cater to consumers with less than desirable credit, with the goal of assisting them in raising their credit score. Millions of Credit One Bank members hold Visa, American Express, and Mastercard credit cards with different terms, benefits, and limits.

As a credit card bank, Credit One Bank doesn’t offer regular banking options, such as a checking account. However, you may be interested to learn more about the bank if you’re in the market for a credit card. Before you apply for a credit card with Credit One Bank, it’s important to review the bank’s processes and procedures, as well as the advantages and disadvantages of becoming a customer.

How Does Credit One Bank Work?

Since Credit One Bank only offers credit cards and no other banking options, you must apply for a credit card to become a customer. Before you apply, the bank requires you to prequalify by providing a few pieces of personal information, including your:

  • Name.
  • Address.
  • Financial information.
  • Social Security number.

With this information, the bank performs a soft credit check to identify the credit card options you qualify for. If you have fair or bad credit, you may only have a few credit card options with low limits and high interest rates. However, if you have good credit history, Credit One Bank may offer you additional credit card options with more beneficial terms.

Is Credit One a Legitimate Bank?

Since Credit One Bank only offers credit cards and no other account options, such as a checking or savings account, it’s only legitimate if you want to apply for a card. Although you may be interested in a specific credit card the bank offers, you won’t know if you qualify for that particular card until you complete the prequalification process.

At that time, you’ll learn about the types of cards you qualify for and the terms and conditions associated with these cards. Certain customers who have their eye on specific cards due to the rewards program or other perks may be disappointed to learn they must complete this prequalification process first. They may not be offered the card they want. Credit One Bank is known for offering credit to customers with lower credit scores, so it may be a beneficial option for consumers looking to build their credit.

Should You Use Credit One Bank?

Consider these important features when deciding if you should open a credit card account with Credit One Bank:

  • ATM: Since you don’t have a checking or savings account, Credit One Bank doesn’t have ATMs. However, you may qualify for a cash advance through your credit card after you enroll.
  • Cashback rewards: Credit One Bank has six different rewards programs, but you won’t know which one you qualify for until you’ve prequalified for a credit card with the bank.
  • Fees: Depending on your qualifications, you may be responsible for an annual fee when you sign up for a Credit One Bank credit card. Your annual fee may be as high as $99. The card you receive may also be associated with cash advance and balance transfer fees, as well as late payment penalty fees.
  • Mobile banking: Credit One Bank allows you to sign up for an online account so you can check your statement and other important information about your card. You can add your credit card to mobile payment options, such as ApplePay or Samsung Pay.
  • Opportunities to rebuild credit: If you have a low credit score, you may be offered less than ideal credit card terms with Credit One Bank. However, you can use your credit card account to rebuild your credit. The bank also offers free credit checks so you can review your progress.

Pros of Credit One Bank

While Credit One Bank doesn’t offer banking options other than credit cards, there are some advantages to becoming a customer with the bank, including:

  • Cash back on eligible purchases: If you qualify for one of the bank’s cash-back rewards programs, you can earn at least 1% cash back on every purchase you make with your credit card. Some programs include more generous cash back offers for different types of purchases.
  • Free credit score summaries: As a credit card holder, you can check your credit score through your online account at any time. This is a helpful feature if you’re working hard to increase your credit score.
  • Options for bad credit: If you have a low credit score, it can be hard to qualify for a credit card to help build your credit. Credit One Bank has several credit card options for consumers with low credit scores and you’re likely to meet the eligibility criteria for one of these options.
  • Regular credit line increases: When you prove you have responsible spending habits, such as paying down your account balance and making your payments on time, the bank automatically increases your credit limit.

Cons of Credit One Bank

Credit One Bank’s credit card options may be helpful for consumers attempting to increase their credit scores, but it’s also important to review potential disadvantages, which may include:

  • High annual fees: Since Credit One Bank caters to consumers with low credit scores, it’s notorious for high annual fees. You’re not provided with information on the annual fees you’re responsible for until you prequalify for a credit card. Keep in mind, after the first year, the annual fee associated with your account may increase to a maximum of $99.
  • High interest rates: Depending on your qualifications, you may also be subject to high interest rates. If you carry a balance on your card, a high interest rate can increase your credit card debt and make it even harder to catch up on payments.

As a bank that only provides credit cards to consumers, Credit One Bank isn’t a safe place to store your money. However, if you’re trying to increase your credit score, prequalifying for a card may be beneficial. Before enrolling, it’s important to review the pros and cons of the bank and your specific credit card terms to ensure it’s the best financial option for you.


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