Posted: 6/21/2005 8:25:36 PM EDT
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I am going to apply for a secured credit card and I have a few questions. First, How much did you send in? I can send from $300 to $10,000. I don't have 10,000, but I could go as high as maybe 2,500. Or should I worry more about just having the positive tradeline and only send in $300? Also, say I send in $2,000. My understanding is that the money technically goes into a savings account. 3 months down the road can I send in another thousand and up the credit line? What if I get into a tight spot - can I withdraw $1000 (and have my CL go down accordingly) ? What do you guys think? |
I was very irresponsible 5 years ago and I'm still trying to recuperate. Previously, I had 5 or so credit cards with limits from 3K to 7.5K. Now, I'd be happy if someone approved me for $500. |
I have a VISA logo on my debit card and I can purchase online/anywhere with it just like a credit card. The problem is that my credit sucks and I need to rebuild it. Also, I'd like to get a mortgage in 1-2 years and I want my credit to be as good as it can possibly be. |
I don't believe a secured credit card is going to help much. Credit scores are based on your ability to handle a regular payment. Not on your ability to pay off a CC, probably not on your ability to use a CC where you've already set aside the cash. That doesn't prove your ability to handle a debt load. I would think a bank loan would be a better way to go. Got any big purchases coming up? I've never had any real issues with credit, so I'm not the best one to be giving advise here. A buddy of mine swung a $75 mortgage just about 6 months out of bankruptcy, FWIW |
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Ah yes, the Secured Credit Card. My first 'shock' at meeting American commercialism at its best. Many moons ago, (Well, five years), fresh off the boat as it were, I'm trying to put down roots. I figure very quickly I'll need (a) a bank account, and (b) a credit card, since I've heard that for some things, they don't accept cash. So, off I go to a Bank of America. I figure it's big, it's got to be reputable. In I go. Opening an account was easy, though I did throw them by not having an American driver's license number. Then, the credit card. "Hallo. I'd like a credit card please" "Excellent! Have you a job?" "Yes" "What do you earn?" "About $45K" "Fantastic. You can qualify for a Gold Card. Fill this out" And all was fine and dandy, until two weeks passed, and I had received nothing. Ask questions on the 'phone, find it had been denied. Back I go to the bank. "'Ere, what's this about my credit card being denied?" "Oh, turns out that you've no credit history" "What?" "You've no credit history. Never had a loan, never had a credit card..." "What's this then?" (As I whip out my Bank of Ireland Visa) "Had it four years, never missed a payment, never been over the limit" "Oh? Let's have a look... Bank of where?! Ireland? Doesn't count" "What do you mean? Just call Visa" "Doesn't work that way. If it's not an American card, it doesn't count" "So how does one get a credit card then?" "You get a secured credit card" "Which is...?" "Well, you throw money into a savings account, and you can't touch it for a year. Say, about $1000." (Bear in mind, I walked off the airplane with $2500, and still needed to get a home and car. In Silicon valley) "OK..." (Not liking this) "Then we send you a credit card secured against that deposit" "And the credit limit on that would be...?" "Whatever you put into the savings account" "So in effect, I'm financing my own credit while you get the fees and charges?" "Umm. yes" Wonderful. I put $700 in. Ran into a similar problem when financing the new Audi. Apparently I don't borrow enough for them. I would have thought that someone who borrows moderate amounts, keeps low balances on credit cards and pays loans off early would be a rather low credit risk, but apparently not to the banks. NTM |
| every time you want to do anything, the secured card charges a fee. adding a deposit down the road is included. based on the amount of $$ you are dealing with, the "interest rate" will far exceed anything a regular loan could charge. use the largest amount of money you can gather, open a CD, then tell the bank you want a loan using that money as collateral. they might allow up to 80% of the CD's worth as a loan. pay that amount off each month as agreed and your credit rating will benefit without the insane charges/fees of a secured credit card. just make sure the bank agrees to report everything to all 3 credit agencies as the terms of your loan. if the bank will not honor that-find one that will. |
Good advice here. 
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Just found this out for myself today. Pulled a credit report and score for myself from Equifax. They gave me a credit score in the fair to poor range and the number 1 reason for my low credit score was lack of a revolving account. (Got rid of my last CC 2 1/2 years ago) I guess I'll reply to the next Capitol One solicitation I get, activate it and toss in the bottom of the safe. Now I'll have a revolving account open. |
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If you shop around you will be able to find a company that won't bend you over. Your bank might be a good start. I was able to get a secured visa from my bank. All I needed was $500 in my savings. There are no fees except if I go over my limit or am late on a payment. I can increase my limit by adding more money to my savings and asking them to increase my limit. No fees. After 12 months of on time payments they will convert the secured card into a normal visa. Now like I said look around. I would however avoid any card from Cross Country Bank. Avoid any card that will charge an huge annual fee. Hell I saw one card that woulg give me a $300 limit, but once they charged all thier fees I would have a balance available of $29. WTF! Also if your looking to rebuild credit, look for a credit union. Open a savings account and after a while start asking for small signature loans. Pay one off and get another. I started off with a $700 loan, moved onto a $1,200 than I got a $30,000 new vehicle loan all in approx 12 months. This was straight out of a Chap 7 BK. Good luck! |
| I just applied for a card from premier bank. They are not a secured card, but a card for ppl with bad credit. They start u off with a $250 limit but they hose you with about $180 in fees to start with so you start with a balance on the card. The only good thing is that they report to the bureau every month so it makes your credit get better faster. I am going to keep it for a year, make every payment on time and see what it does to my credit score. Hopefully I will be able to qualify for a real CC then. |
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Call CapitalOne. They gave me a $1000 and my wife a $3,000 credit line, unsecured, 12% 2 monthes after a bankruptcy that cancelled around $60,000 in unsecured debt..... It has been3 years and they are still the only ones that will give us credit, but they have increased our limits... Dan |
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DO NOT USE A CHECK CREDIT CARD! Once someone pulls money out of your checking account it can be a horry story getting it back if there was a mistake or you were scammed. A secured credit card is a decent way to reubild credit if you can't get it any other way. Best thing to do is to always pay it off immediately each month. Eventually you probably can get a real card. Regular credit card allows you to dispute charges before you pay. Check card your money goes out of your account (maybe all your money) and you fight with the bank and whoever meanwhile you can't pay your mortgage, rent, car payment, gas etc etc etc because you have zero in you bank account. |
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I tried. My EQ FICO (they call it Beacon) score is 622. They said it HAD to be 660, period, sorry. I'm working on my credit reports, so in 6 months or so I might be at 660. Then again, if I apply for new credit and don't get it the inquiries might bury me further. |
I went into my CU to talk to the lady about my denied application (had applied and was declined online) and it turns out they offer a secured CC. They simply play a hold on X amount in your savings account and that is your credit limit. This seems like the best route since I'll be building a positive relationship with my CU (which I've been a member of for probably 10 years) and they will hopefully unsecure more quickly than a suit and tie bank. Thanks for the help guys. |
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Target has a credit card with a $200 limit that they will give to just about anyone. I got one and started buying about $100 a month and paying it off when the bill came. After about 6 months of doing this I had an established history and could get credit almost anywhere |
Funny you should mention them. I applied for them and they sent me a letter stating I was denied because they could not verify my address and telephone number  But they sent that letter to....my address.  I sent them a utility bill to prove address so we'll see if I get approved. I also updated my address with all three major CRAs. |