Review: Capital One 360

I normally don’t review financial products/services as typically everyone’s needs are different. For example, I have a basic credit card with a relatively low interest, but no cash back. I don’t use the credit on my card enough to really benefit from cash back especially at a threat of higher interest rates. However, this is a bank account, and most people need a bank account, right? Now, your bank account may serve you well, and if that is the case – keep it. However, if you are looking for a new account, this might be an option to consider.

I chosen to open a Capital One 360 account for a few reasons. First, my previous account (which I still have the account open) gave me a bank account, but seem to refuse me when I asked for a credit card or a personal loan to consolidate debt, and get a few essentials. With the fact that I already had a credit card and on time payments with them had been 100%, I felt as if I wasn’t being looked at as a customer, but a number with another number attached. With this in mind, I have loss any personal sense of loyalty and commitment to them. I already had a Capital One Credit card which I had for more than 8 years when I applied for the loan, so I had an established payment history – one that was longer than my bank account. So knowing that I will be treated as a number with a big bank like Capital One, I didn’t see much difference in customer relations to what I been dealing with already.

The Good

Since every bank is different, and policies can change – I am not going to do comparisons. Instead, I am going to list the features that I will consider as good, and note them here. Probably one of the biggest advantage is that there was no minimum opening deposit. I told Capital One to take $2.00 out of my checking account to open an account. My main concern was to get a routing and account number. This information was obviously needed to set up direct deposit to go to the new account.

Being this is an online bank account, the interface is important. With that in mind, the interface is simple, and easy to work with. I not only can see the balance of my bank account, but since I have a credit card with Capital One, I can also see that balances and available credit. This means if I needed to do any management with my account, I can also see what is available on my credit card (or cards if I had more than one Capital One credit card). I can also create additional checking accounts (if that was needed), and Savings Accounts within the new interface. I hadn’t done any of that as I don’t need it, but I am assuming it should be simple to do.

You can also setup a connection with 3 checking accounts not with Capital One. In my case, my Huntington Account is setup. This will allow me to move funds from my Capital One account to my Huntington account if that was needed. To send funds from Huntington to Capital One requires a verification process which Huntington is a bit inefficient in the process as it took a few business days to allow me to tell them what deposits they made. I am guessing this is a similar process with new external accounts, but since I don’t have multiple accounts, I can’t test this feature.

Now, I am not one to overdraft. I had overdrafts before, but none within the past decade. However, there are four options that Capital One 360 offers. First is auto-decline, and this is default. If a transaction comes through that would cause the account to go negative, it will be declined. If this is a check transaction, Capital One will charge you $9 (as opposed to the $35 average). If you have a Capital One 360 Savings account, you can have the money transferred automatically from your savings. However – they limit Savings withdrawls to 6 times per month. There is also a next day grace which will give you 1 business day to add funds before they charge you the $35 overdraft fee. This however will likely be a bit pointless since the only way to deposit money in time is through a bank branch. So unless you live near a Capital One bank, this won’t serve you. The best option is Overdraft Line of Credit. This will require a credit check, and the line of credit is based on your credit score. However, even with an 850 credit score – the maximum is $1,000. As for my choice, I have the overdraft line of credit. For me with a 657 credit score – I had a choice of $100 or $200. I chose the $200 which is the maximum of protection I will have, and will have 12% APR. Once I my direct deposit goes to my Capital One 360 account, I will set my automatic recurring bills to my Capital One debit card. On a monthly basis, I have $50 in automatic recurring bills, and various domain registrar fees that occur throughout the year. If I forget about those bills, I will have protection, and will obviously address any minor charges on the first of the next month.

You also have access to Creditwise which is Capital One’s connection with Transunion for your credit score and basic information. For those with a Capital One Credit Card, this is the same service. And while this may not mean that much, the checking account earns interest which is not something many free accounts do.

As for paying bills, you have a few options. First you would receive a Debit Card which is acceptable with any Mastercard Network merchant. You can also order a book of 50 checks. First book is free. You can also order more checks, and checks cam be ordered through Capital One, or another service. You can also have Capital One mail a check for you. Many banks do this, so it is nothing special. If you need too, they will Express Mail a cashiers check (guaranteed by the bank) for $25. Bill pay services can be done, and Capital One will use electronic bill pay when possible. In addition, you have an online ledger which will allow you to enter the physical check details. I will imagine that this will deduct the money from your balance, but had not had the chance to use this fully yet.

You can also be alerted when there are deposits, Person2Person Payments, check cashed, debit card transaction exceeding an amount you choose, or if your checking account drops below an amount you choose. You can also be informed when a non Capital One initiated transaction is made.

The Bad

That initial deposit when opening an account took nearly a week. I created the account on 30th of March, and didn’t get that $2.00 balance in my bank account until 5th of April. So, if you are going to open a new account – start with a low balance. Your deposit can be in limbo for a week, and that could be a significant problem especially for those on low income or living check to check.

I am also hoping this is just a fluke with my inferior phone, but trying to make a check deposit both through the Capital One mobile app, and uploading an image (taken with my phone) was unsuccessful. This meant I had to deposit the check in my Huntington Bank, and then eventually initiate a bank transfer from Huntington to Capital One. The other option is mail the check to Capital One. While I rarely get paper checks, this is discouraging when considering on cancelling my Huntington Account. Another issue is cash deposits. Capital One is aligned with the Allpoint Network of ATMs, but how many of these will accept deposits. I am sure I can use a bank ATM, but this will probably incur transaction fees.

Another issue is Person2Person setup. I am not sure if I have to do anything in particular, but as of now – this service has been a complete failure even trying to access the resource. If I would want to send someone money, I will either give them cash or use Google Wallet. I would suspect more people have access to Google Wallet then Person2Person.

Refer a Friend hasn’t worked since I opened the account. I don’t have any friends that would likely be interested in a new checking account, but it is nice to have that option if that were to apply. If this service (and Person2Person) is no longer features, they should remove it from the online page management.

The Ugly

It took a couple of days to get the line of credit with the bank. This line of credit is in the unlikely case I would overdraft my account. I have yet to use my checking account other than for the deposit as I am waiting for direct deposit to come in May 2017, but they should have offered the Line of Credit Option as you are setting up the account.

Thoughts

No matter what, I will be keeping my Huntington Account until at least after July. This is due to waiting on a direct deposit that will be on 3rd of July. Closing my account before then will mean a mailed check which could take about 2 weeks, and if the mobile deposit issues are still a thing with me, that will mean I will have to mail it to Capital One for deposits.

It would be good if the mobile app can handle poor cameras which will likely be in the hands of low income consumers. Also, there needs to be a way to support cash deposits. If someone handed me cash, and I want it to be deposited into my account, I just don’t see a realistic way of doing that without keeping a local bank open.This will definitely be an issue for some.

However, the line of credit is something I haven’t seen been done by other banks. Yes, a bank may choose to cover a charge for $35, and all US banks are required by law to give you an option to decline the overdraft to avoid the overdraft charge. Most banks will allow you to link with a savings account in the same bank, but I have yet to see one that will give a line credit (if you qualify) which in my opinion to be a more standard practice, but this will mean the bank won’t be able to make that $35 overdraft goodness. Still feel there should be an option to link with a Capital One credit card.

I will handle any cash given to me. This will mean less money I pull out of my account if someone handed me cash. As for checks, I will make the effort to use the app, but may have to consider mailing the check – especially if I decide to close my Huntington Account.

However, for those on a tight budget – I find that this is an excellent account. It offers all of the features that other free checking accounts offer. In addition, there is a possibility of getting some overdraft protection. I will assume someone with poor credit can get $25 which is enough to cover a minor mistake. The hard part will be getting started unless you already have an account, and just looking for something better.

As for money options, I do have a Google Wallet account and a Square Cash account – both of which will transfer funds to my Capital One account (or any US bank) in a few days.

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