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Capital One credit card review: Progress

Now here's a new concept: a shrinking interest rate.

The Capital One Progress credit card is the first that we've seen to offer this service - we'd hesitate to call it a reward, exactly - which slowly reduces the initial high 29.94% p.a. (variable) interest rate.

If your account is managed well - without exceeding your credit limit or missing any minimum monthly payments - it will reduce by 2% every 6 months until it reaches 17.9% p.a. (variable). What's more, when the offer is over it will now remain at 17.9% p.a. (variable).

Recent changes to this offer now mean that if you do miss a payment or go over your credit limit your interest rate won't shoot back up - instead you'll just remain on your current rate and you'll still be eligible for the next reduction in 6 months.

The rate reduction now applies to cash withdrawals as well as purchases and balance transfers - so all transaction types will stay in line with each other cost wise.

It's still important to note however that even at the lowest 17.9% p.a. interest rate it'll be fairly costly to carry a balance on the credit card and it is advisable to keep any spending repaid in full each month.

Also - don't forget, just because the cash withdrawal rate will now reduce with the purchase rate - there is no monthly interest free period on cash withdrawals or balance transfers so these transactions will be charged interest even if you pay off your balance in full each month.

It's certainly best to think of the Capital One Progress credit card as a step-up from the Capital One Classic which is designed for consumers with a poor or non-existent credit history: you'll need to have avoided any CCJs or defaults in the past 12 months to apply.

With credit increasingly hard to find the Capital One Progress credit card is another opportunity to use good spending habits to build a strong credit history.

This is underlined with the extra credit history monitoring services from Equifax that are included as part of this credit card's member services.

Capital One progress cardholders will be able to get two Equifax credit reports a year for free plus personalised alerts of any changes to their credit file.

There's also an instant decision service available when you apply online.

All in all, the Capital One Progress credit card is a great way to continue to build a good credit score into an excellent one.

Interest Rates and Fees
		Notes..
Typical APR	29.9% APR (variable)	The standard rate for purchases, balance transfers and cash withdrawals will reduce to 17.9% p.a. over 36 months if you keep within your credit limit and always make the minimum monthly payment. The interest rate will reduce as, after: - 6 months: 27.9% p.a. (variable) - 12 months: 25.9% p.a. (variable) - 18 months: 23.9% p.a. (variable) - 24 months: 21.9% p.a. (variable) - 30 months: 19.9% p.a. (variable) - 36 months: 17.9% p.a. (variable) The typical APR is the rate most people are offered.
Balance Transfers	29.94% p.a.	-
Balance Transfer Fee	3%	-
Cash Withdrawal Rate	29.94% p.a. (variable)	-
Cash Withdrawal Fee	3% (£3 minimum)	-
Annual Fee	None	-
Foreign Transaction Fee	2.75%	This fee will be charged if you make a purchase or cash withdrawal in a foreign currency.

Cardholder Services & Extras
Online Account Management		You can manage your Capital One Progress credit card account online. Optional Paperless statements.
Internet Fraud Guarantee		100% Internet fraud guarantee if your card is used without your knowledge.
Fraud Monitoring		Active Fraud Protection Capital One will monitor your account for any unusual activity and alert you straight away.
Identity Protection		Identity Theft Assistance Help and guidance on how to prevent identity theft, as well as your own named advisor to help with your case from start to finish if you ever experience identity theft.
Credit Report Access		Identity Alerts If your credit report changes, for example if someone applies for your credit using your name or if any key changes are made to your Equifax credit report you will be alerted. 2 Free Credit Reports a Year Free access to your Equifax credit report two times each year.
MasterCard SecureCode		An extra layer of security when shopping online. Register and set up a password-protected identity-check when you shop online with participating online retailers.
Purchase Protection Insurance		Up to £1,000 per claim, up to £20,000 in any 12 month period Most items bought with the Capital One Classic credit card will be covered against loss, damage or theft for 100 days after purchase (restricted to the UK only and any stolen purchases must be reported to the police within 24 hours). - Does not cover delivered items. - Exclusions apply.
Purchase Delivery Insurance		The 'Purchase Protection Insurance' policy does not include delivered items.
Comprehensive Travel Insurance
Travel Accident Insurance
Travel Inconvenience Insurance
Assistance Abroad
Emergency Card Replacement
Other Extras	- Up to 3 additional cardholders free.
Optional Extras	These are extras that you can choose, but you will have to pay for them. - Payment protection.

Payments & Payment Details
		Notes..
Credit Limit	£200 minimum, £2500 maximum	Credit limit may vary from person to person and is subject to status.
Interest Free Period	Up to 56 days	For purchases only if you pay your balance in full and on time each month. There is no interest free period on cash withdrawals or balance transfers.
Minimum Monthly Payment	1% (£5 minimum)	The minimum monthly payment will be the greater of: - 1% of the outstanding balance, plus all interest applied in that month, plus all default sums incurred in that month, plus one twelfth of any annual fee, OR - £5
Allocation of Payments	Fees, Charges & Expenses » Interest » Insurance Premiums » Promotional Balances (lowest rate balances first) » Standard Rate Balances (balance transfers, then purchases, then cash withdrawals).	-
Default Charges	£12	This is how much you will be charged for late payments, returned payments and if you go over your credit limit.
Copy of Statement Fee	£3	Maximum £10 per request.

Card Details
		Notes..
Online Application	Yes	Instant decision in most cases.
Card Type	Platinum	-
Payment Company	MasterCard	The company who provides the payment technology and infrastructure to allow you to use this credit card. Retailers and ATM machines displaying the 'MasterCard' logo will accept this credit card.
Card Issuer	Capital One	The bank who issues this credit card. Capital One Card Services P.O. Box 5283 Nottingham NG2 9HD
Card Advertiser	Capital One	The company who advertises and promotes this credit card.

Review Continued...

The Capital One Progress credit card is an innovative credit card that can help to build an outstanding credit score and allow you to monitor your progress.

Build an excellent credit score

If you've previously used a credit card for those with poor credit scores successfully or are fairly new (but not completely new) to credit then the Capital One Progress credit card could be for you.

If you're over 18, on the electoral roll and have previously had some form of good UK credit (no CCJs or defaults in the past 12 months) then you'll be a suitable applicant.

An extremely high rate of interest when you start out - typically 29.9% APR - makes the Capital One Progress credit card unsuitable for carrying a high balance over a number of months but it will become slightly more suitable to occasionally carry a balance at the end of the month if the need arises as the interest rate starts to fall, particularly the lowest tier 17.9% p.a. (variable) which is much more inline with rates seen on more mainstream credit cards.

In general, though, the Capital One Progress credit card's greatest benefit is helping to create an excellent credit score.

By making at least the minimum repayment every month (although it's recommended that you pay more, if not all of it) and staying within your credit limit the per annum interest rate will be reduced as follows:

• 29.9% p.a. (variable) starting rate
• 27.9% p.a. (variable) after 6 months
• 25.9% p.a. (variable) after 12 months
• 23.9% p.a. (variable) after 18 months
• 21.9% p.a. (variable) after 24 months
• 19.9% p.a. (variable) after 30 months
• 17.9% p.a. (variable) after 36 months

This offer has recently been updated and as such after the 36 months the interest rate will remain at 17.9% p.a. (variable).

It's worth noting that if you do miss a payment or go over your credit limit, while your rate won't reduce by 2% - it won't shoot back up to the starting rate either, instead it will remain at the current rate and you'll still be eligible for the next rate reduction in 6 months.

Monitor your own credit score

The Capital One Progress credit card comes with a few extras to help you to monitor your credit score.

The services are provided by the credit reference agency Equifax absolutely free: two free full credit reports a year; service alerts when any major changes are made to your Equifax credit report whether you gave your permission or not and an alert if anyone applies for credit using your name.

All banks and credit providers assess your 'credit score' differently but even so this system allows you to track your progress with a major provider of personal financial information, and that can't be bad.

No cash

The Capital One Progress credit card is unsuitable for withdrawing cash and using abroad.

The same high initial 29.94% per annum interest rate on purchases applies to cash withdrawals but it starts from the moment that you make a withdrawal and will apply whether you pay off your statement balance in full or not, so it's potentially very expensive. There's also a 3% 'handling fee' with a minimum fee of £3. Using the credit card abroad will be subject to a 2.75% transaction fee.

Monitor security

Finally, Capital One Progress cardholders are protected by Capital One's excellent identity protection, purchase protection and fraud monitoring services.

For extra protection on your online purchases you'll be able to register for Verified By Visa or MasterCard SecureCode services and Capital One's active fraud protection will monitor any possibly fraudulent activity on your account.

Your purchases with the Capital One Progress credit card will be covered against loss, damage or theft for 100 days after purchase up to a maximum of £1,000 per item claimed on and as well as your protection under law as part of section 75.

There are some exclusions on this protection including delivered items, jewellery, cameras and second hand goods, so it's worth looking at the terms and conditions for full details.

Final Word

All in all, the Capital One Progress credit card is an excellent way to build up a credit score with a supportive credit card provider.

Apply Online for Capital One Progress credit card »