Credit One Bank charges higher fees than most banks and offers lower interest on savings

Credit One Bank is a federally chartered bank that operates primarily online. It is not a scam, but it is structured around customers with poor credit histories, and that positioning means higher costs across almost every account feature. The bank makes money by charging monthly maintenance fees, overdraft fees, and foreign transaction fees that exceed what you would pay at a traditional bank or online-only competitor.

The core problem: Credit One Bank targets people rebuilding credit, then charges them more for the privilege of banking there. A customer with a $500 balance in a checking account might pay $25 to $35 per month in fees alone, depending on account type. That same customer at a bank like Chime or even a traditional regional bank would pay zero.

Credit One also operates a credit card product marketed to people with limited credit history. That card carries an annual fee, a high interest rate, and a cash advance fee — all standard for subprime credit cards, but worth understanding before you open an account expecting to rebuild credit cheaply.

Key Takeaways

  • Credit One Bank charges monthly maintenance fees ($9 to $35 depending on account type) that most online banks and many traditional banks do not charge.
  • Overdraft fees run $35 per occurrence, and the bank allows multiple overdrafts per day, so a single mistake can trigger hundreds in fees.
  • Savings accounts at Credit One earn little to no interest, while online savings banks currently offer rates above 4 percent.
  • The Credit One credit card includes an annual fee and a high APR, making it expensive to use for credit building compared to secured card alternatives.
  • Credit One is a real bank with FDIC insurance, but the fee structure makes it a poor choice unless you have been rejected everywhere else.

How the monthly fee structure works

Credit One offers several checking and savings products, and each one carries a monthly maintenance fee. The checking account costs $9 per month if you meet certain conditions (direct deposit, minimum balance, or a certain number of debit card transactions), and $25 per month if you do not. A Money Market account costs $25 per month. These are not optional charges that you can waive by maintaining a balance — they are built into the account structure.

For comparison: Chime, Ally Bank, Charles Schwab, and dozens of other online banks charge zero monthly maintenance fees on checking accounts. Many regional banks also waive the fee if you maintain a minimum balance or set up direct deposit. Credit One's fee is not negotiable, and it applies whether you use the account actively or not.

Over a year, a $9 monthly fee costs $108. A $25 monthly fee costs $300. That money comes directly out of your account balance and represents a real cost of banking there.

Overdraft and insufficient funds fees

Credit One charges $35 per overdraft transaction. The bank allows multiple overdrafts per day, meaning if you make five debit card purchases when you have $50 in your account, you could be charged $175 in overdraft fees on top of the original transactions being declined or going through and creating a negative balance.

Many banks have moved away from overdraft fees entirely or charge them only once per day. Some, like Chime, do not charge overdraft fees at all. Others, like Capital One 360, charge $35 but limit it to one per day. Credit One's policy of allowing multiple overdrafts per day is a significant cost risk for customers living paycheck to paycheck — the exact population the bank markets to.

The bank does offer an overdraft protection service, but that requires linking an external account and may carry its own fees depending on your other bank.

Interest rates on savings accounts

Credit One's savings account currently earns minimal interest — often below 0.01 percent, though rates change. Online savings banks like Marcus, Ally, and American Express Personal Savings currently offer rates above 4 percent on the same type of account. That means $1,000 in a Credit One savings account earns roughly $0.10 per year, while the same $1,000 at an online bank earns $40 to $50 per year.

If you are trying to build an emergency fund while banking at Credit One, you are losing money to both monthly fees and near-zero interest. The math works against you from the start.

The Credit One credit card and its costs

Credit One also issues a credit card marketed to people with poor or no credit history. The card charges an annual fee (currently $99 for the standard version), carries an APR typically between 18 and 24 percent, and charges a $35 cash advance fee. These are not unusual for subprime credit cards, but they are expensive compared to secured card alternatives.

A secured credit card from a traditional bank — like the Capital One Secured Mastercard or the Discover Secured Card — often charges no annual fee or a lower fee, and both offer better APRs and the same credit-building function. If your goal is to rebuild credit, a secured card from a different issuer will cost you less and report to the same credit bureaus.

Why Credit One targets customers with poor credit

Credit One's business model depends on customers who cannot get accounts or credit products elsewhere. The bank accepts applications from people with bad credit, recent bankruptcies, or no credit history at all. That is not inherently wrong — some people do need a bank that will take them. But the fee structure means the bank profits most from the customers least able to afford fees.

A customer with a 750 credit score would not open a Credit One account; they would go to Chase or Ally. A customer with a 550 credit score and $200 in savings has fewer options, and Credit One knows that. The $25 monthly fee on that $200 account is 15 percent of the balance per month — a rate that would be illegal on a loan but is legal on a bank account.

Better alternatives depending on your situation

If you have been rejected by other banks, start with a second-chance banking program. Many regional banks and credit unions offer accounts specifically for people rebuilding credit, often with lower or no monthly fees. The ChexSystems database tracks banking history, and you can request your report for free at www.chexsystems.com to see if that is why you were rejected. Some rejections are fixable.

If you need a checking account with no fees, Chime, LendingClub, or Varo all accept customers with limited credit history and charge no monthly maintenance fees. If you need a credit card to rebuild credit, a secured card from Capital One, Discover, or your own bank will cost less and build credit just as effectively.

Credit One is a legitimate bank with FDIC insurance up to $250,000 per account type, so your money is safe there. But safety and affordability are not the same thing. You can have a safe account that costs you hundreds per year.

Frequently Asked Questions

Is Credit One Bank a scam?

No. Credit One is a real, federally chartered bank with FDIC insurance. Your deposits are protected. The issue is not fraud — it is that the fee structure is expensive compared to other banks. The bank is transparent about its fees; they are just high.

Can I avoid the monthly fee at Credit One?

The checking account fee can be reduced from $25 to $9 per month if you set up direct deposit, maintain a minimum balance, or make a certain number of debit card transactions per month. The $9 fee itself cannot be waived. Savings accounts and Money Market accounts have fixed monthly fees with no waiver option.

Does Credit One report to credit bureaus?

Yes, Credit One reports account activity to the three major credit bureaus (Equifax, Experian, TransUnion). However, a checking or savings account does not build credit the way a credit card does. If you want to rebuild credit, you need a credit product, not just a bank account.

What happens if I close my Credit One account early?

You can close a Credit One account at any time with no early closure fee. Withdraw your balance, request account closure, and the account will be closed. There is no penalty for leaving, which is one of the few advantages of the account structure.

How does Credit One compare to a traditional bank?

A traditional bank like Wells Fargo or Bank of America typically charges $0 to $15 per month in maintenance fees (often waived with direct deposit or minimum balance), offers overdraft protection options, and pays slightly higher interest on savings. The main reason to choose Credit One is if you have been rejected by traditional banks. Otherwise, the costs do not justify it.