The Indigo card works best if you have poor credit and need to rebuild, but it costs more than alternatives with better terms
The Indigo card is a secured credit card issued by Capital One. You put down a cash deposit (usually $250 to $2,500), and that deposit becomes your credit limit. The card reports to all three credit bureaus, so on-time payments build your credit history. The catch: it charges an annual fee of $95, has a high interest rate (currently around 24% APR, though this varies), and offers no rewards.
Whether it is worth getting depends on your situation. If you have no credit history or damaged credit and cannot get approved for anything else, the Indigo card can work as a stepping stone. But if you have other options — even a basic unsecured card or a credit-builder loan — those will cost you less money over time.
Key Takeaways
- The Indigo card requires a cash deposit that becomes your credit limit, so you need $250 to $2,500 available upfront.
- The $95 annual fee and 24% APR make this card expensive compared to unsecured cards, even for people with fair credit.
- Capital One reports to all three bureaus, so consistent on-time payments will improve your credit score over 6 to 12 months.
- You may be able to move to an unsecured Capital One card or another issuer's card after 6 to 18 months of responsible use.
- A credit-builder loan from a credit union or online lender may cost less and build credit just as effectively.
How the Indigo card actually works
You send Capital One a deposit between $250 and $2,500. That amount becomes your credit limit — if you deposit $500, you can charge up to $500. The deposit sits in a locked savings account and earns a small amount of interest (currently around 4.5% APY, though rates change). You cannot touch this money while the account is open.
You then use the card like any other credit card: charge purchases, receive a monthly statement, and make a payment. If you pay on time and in full, you pay no interest. If you carry a balance, you pay 24% APR on what you owe. The $95 annual fee hits your account once per year, usually on your account anniversary.
Capital One reports your payment history to Equifax, Experian, and TransUnion every month. This is the card's main value: it creates a record that you pay bills on time, which is the single largest factor in your credit score.
When the Indigo card makes sense
The Indigo card is worth considering if you have been denied for unsecured cards and have no other way to build credit. This includes people with no credit history (recent immigrants, young adults), people recovering from bankruptcy or foreclosure, or people with collections accounts or late payments on their record.
It also makes sense if you need a credit limit right now and cannot wait for a credit-builder loan to mature (those typically take 12 months). The Indigo card gives you when ready access to a credit line, even if that line is small.
The card does not make sense if you already have access to an unsecured card, even one with a higher interest rate or lower limit. A basic card from Discover, Capital One's own Journey card, or a store card will cost you less in annual fees and often charge lower interest rates.
The real cost of using this card
The $95 annual fee is the most visible cost, but interest charges can add up faster. If you carry a $500 balance for one month, you pay roughly $10 in interest. Carry it for a year, and you pay about $120 in interest alone — plus the $95 fee, for a total of $215 on a $500 balance.
Compare this to a credit-builder loan: you borrow $500, make 12 monthly payments of about $42, and pay roughly $4 in interest. Total cost is around $4, and your credit builds the same way. The difference is significant if you are trying to rebuild on a tight budget.
The deposit itself is not a cost — you get it back when you close the account or graduate to an unsecured card. But it is money you cannot use for other things, so there is an opportunity cost if you are short on cash.
How long it takes to build credit with Indigo
Most people see their credit score improve within 3 to 6 months of opening the card and making on-time payments. The improvement is usually modest at first — perhaps 20 to 50 points — because the card is new and your credit history is short.
After 6 to 12 months of perfect payment history, your score may improve by 50 to 100 points or more, depending on what else is on your report. If you have collections accounts, late payments, or a bankruptcy, those negative items will still drag your score down even if you use Indigo perfectly.
The real payoff comes when you have enough positive history to move to an unsecured card. Capital One sometimes offers to convert an Indigo account to an unsecured card after 6 to 18 months. Other issuers may also approve you for their cards once you have shown 12 months of on-time payments.
Better alternatives to consider first
A credit-builder loan from a credit union or online lender (like Self or Kikoff) costs less and builds credit just as effectively. You borrow a small amount, make monthly payments, and the lender reports to the bureaus. Total cost is usually $4 to $10 in interest, with no annual fee. The downside: you do not get a credit card or when ready access to borrowed money.
A basic unsecured card from Discover (the Discover it Secured card or Discover it Student card) or Capital One's own Journey card may be available to you even with poor credit. These cards have no annual fee and lower interest rates than Indigo. If you can get approved, they are almost always the better choice.
A store card from a retailer you shop at regularly (Target, Amazon, Best Buy) is sometimes easier to get approved for than a general-purpose card. These cards have no annual fee, though interest rates are high. Using one responsibly for 6 to 12 months can help you move to a better card.
If you have a bank account, ask your bank whether they offer a secured card or credit-builder product. Many banks offer these to existing customers at lower costs than Indigo.
What happens after you use Indigo
If you make on-time payments for 6 to 18 months, Capital One may convert your Indigo account to an unsecured card. When this happens, your deposit is returned to you, and you keep the card with a new credit limit (usually higher than your deposit). The annual fee may drop or disappear, depending on the card you graduate to.
You are not may provide a conversion — it depends on your payment history and Capital One's internal criteria. But if you do not get converted, you can close the Indigo card and use your improved credit score to explore for cards from other issuers.
Once you have 12 to 18 months of on-time payment history with Indigo or another card, you become may be able to access for mainstream cards with better terms: lower interest rates, higher limits, and sometimes rewards. At that point, the Indigo card has served its purpose and you can move on.
Frequently Asked Questions
Can I get my deposit back before closing the account?
No. Your deposit stays locked in Capital One's account for as long as the card is open. You get it back only when you close the account or when Capital One converts it to an unsecured card. If you need the money before then, you would have to close the card, which stops the credit-building benefit.
What if I miss a payment on the Indigo card?
A missed payment will be reported to the credit bureaus and will damage your credit score. Capital One may also charge a late fee (usually $25 to $35) and increase your interest rate. If you miss a payment, contact Capital One when ready to bring the account current and ask about waiving the late fee.
Does the Indigo card offer any rewards or cash back?
No. The Indigo card has no rewards program, no cash back, and no sign-up bonus. This is typical for secured cards aimed at people rebuilding credit. The value is in the credit-building, not in earning rewards.
How much should I charge on the Indigo card each month?
Charge something small each month — $10 to $50 — and pay it off in full before the due date. This shows Capital One you can manage credit responsibly without racking up interest charges. Do not max out the card or carry a large balance; that defeats the purpose and costs you money.
Can I increase my credit limit on the Indigo card?
You can increase your limit by making an additional deposit. If you deposit another $500, your limit goes up to $1,000 (if your original deposit was $500). You cannot increase your limit without adding more money to the locked account.