topic Re: Secured credit card in Credit Cards

Secured credit card

athan12 — Sun, 30 Dec 2012 00:08:14 GMT

I have a student credit card right and it's been past due for a very long time, but I just paid off all of my debts last week, so basically I'm just starting to rebuild my credit again.

I'm planning to get a secured credit to build up my credit making me have 2 credit cards. I was just wondering what company to apply for a secured credit card. My score is at 570 right now. Which credit cards flags a secured credit card and which ones dont?

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 00:17:37 GMT

athan12 wrote:
I have a student credit card right and it's been past due for a very long time, but I just paid off all of my debts last week, so basically I'm just starting to rebuild my credit again.

I'm planning to get a secured credit to build up my credit making me have 2 credit cards. I was just wondering what company to apply for a secured credit card. My score is at 570 right now. Which credit cards flags a secured credit card and which ones dont?

Capital One doesn't list their secured card as a secured card...most other places do, like Bank of America, Wells Fargo, credit unions, etc....it won't affect your FICO or most card applications, but things requiring further review of your credit report may cause a red flag and make some creditors uneasy...

Bank of America and Wells Fargo and certain CUs are better because they will unsecure your card down the road and give you your deposit back...Capital One is good in that they may grant you a credit limit increase without any additional deposits, but will never unsecure the card!

Are you still a student? Maybe you can try another student card, but since your score is so low due to past due accounts, you may get denied :/

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 00:29:45 GMT

I'm not a student anymore.. :( not yet.

I'm using a Bank of America student credit card right now. Does having a student credit card gets you less credit score than having an unsecrued credit card? Also, does having a secured credit card gets you less credit score than an unsecured credit card?

So basically if I'm planning to work my way up to an unsecured credit card, I should go with Bank of America, Wells Fargo, or Credit Union? What are the other companies that you suggest other than these three companies? Because I know I have a bad record with Bank of America due to my bills due on my student credit card.

Thank you for your fast reply @daybreakgonesXe. I'm pretty new to this forum and just started rebuilding my credit score. :)

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 00:37:42 GMT

athan12 wrote:
I'm not a student anymore.. :( not yet.

I'm using a Bank of America student credit card right now. Does having a student credit card gets you less credit score than having an unsecrued credit card? Also, does having a secured credit card gets you less credit score than an unsecured credit card?

So basically if I'm planning to work my way up to an unsecured credit card, I should go with Bank of America, Wells Fargo, or Credit Union? What are the other companies that you suggest other than these three companies? Because I know I have a bad record with Bank of America due to my bills due on my student credit card.

Thank you for your fast reply @daybreakgonesXe. I'm pretty new to this forum and just started rebuilding my credit score. :)

An unsecured, secured, and student credit card all are judged equally in the FICO scoring model :) So neither of them will give you a "less" score compared to the other!

And I forgot what other issuers give secured cards...NFCU and USAA usually do if you get denied for one of their products, not sure if this still holds true...Hopefully another member will be able to give a little bit more information on what other banks/CUs have secured cards!!

And no problem!! You should try posting this post in the rebuilding section as well! I'm sure a lot of people there have experience with different secured cards, and which issuers will be your best bet :) Good luck to you and your quest to a better credit score!!!

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 00:58:56 GMT

Is there a chance I'm getting denied for applying a secured credit card? I know this is kinda funny question :) or do I have to apply for an unsecured credit card and get denied before I can apply for a secured credit card?

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 01:01:39 GMT

athan12 wrote:
Is there a chance I'm getting denied for applying a secured credit card? I know this is kinda funny question :) or do I have to apply for an unsecured credit card and get denied before I can apply for a secured credit card?

There is a slight chance of being denied for a secured card...usually due to a baddie against the bank or just a really really bad credit file...you don't seem to fit that category though, except for BofA, like you mentioned!

What I meant was for certain companies, like NFCU and USAA, they don't have a public secured card. In order to receive it, you have to be denied for an unsecured card, and OFFERED a secured card instead. So it's not two applications!

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 01:19:57 GMT

So if I apply for an unsecured NFCU credit card and get denied but get offered for a secured credit card. Will it show as an inquiry on my report and hurt my credit score?

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 01:21:44 GMT

athan12 wrote:
So if I apply for an unsecured NFCU credit card and get denied but get offered for a secured credit card. Will it show as an inquiry on my report and hurt my credit score?

The inquiry will hit your credit and cause your score to dip only by a few points. Applying for a secured card will also result in an inquiry as well, so either way you're taking a slight hit for a new tradeline! In the long run though it'll cause your score to increase, if used responsibly.

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 01:22:41 GMT

Just remembered! I heard Open Sky Secured card won't result in an inquiry. Also another secured option.

Re: Secured credit card

bichonmom — Sun, 30 Dec 2012 01:23:21 GMT

athan12 wrote:
I have a student credit card right and it's been past due for a very long time, but I just paid off all of my debts last week, so basically I'm just starting to rebuild my credit again.

I'm planning to get a secured credit to build up my credit making me have 2 credit cards. I was just wondering what company to apply for a secured credit card. My score is at 570 right now. Which credit cards flags a secured credit card and which ones dont?

You should try to GW your lates. If it's only one CC, then GW them. Can you come up with an explanation as to why you hadn't been paying? Try searching on here under Goodwill or GW, or post in the rebuilder thread. Generally, you need some kind of a good reason to explain why you didn't pay. And sometimes it takes persistance.

You do need to be approved for a secured card. And I don't know how that would help you right now. You still have your student card, right? Just start using that a little bit and PIF every month. That will likely also help your GW situation since they'll see that you're using your credit responsibly now.

BTW, USAA will only counter for a secured card to FULL members, which means either you are in the military or you have a family member who is or was a member of USAA. Having family in the military who aren't a USAA member does NOT qualify you for full m'ship. They would need to join USAA first. And USAA is a pretty conservative lender. Yes, they give generous CLs, but they are not lenient by any means.

Re: Secured credit card

bichonmom — Sun, 30 Dec 2012 01:28:35 GMT

daybreakgonesXe wrote:
Just remembered! I heard Open Sky Secured card won't result in an inquiry. Also another secured option.

http://www.cardhub.com/d/open-sky-secured-credit-card-503c/

I would avoid this like the plague! $50 AF plus...

This credit card does not have a grace period, which means that interest will begin getting assessed as soon as you make a purchase.

After your Account is open for one year or more Capital Bank will charge you a Credit Limit Increase Fee of $25.00 each time you add Deposit Funds and increase the Credit Limit and a Credit Limit Decrease Request Fee of $25.00 each time you request a reduction in your Credit Limit.

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 04:46:19 GMT

Yes, I still have my BofA Stundent Credit Card, and that's my only CC as of now.

What does PIF stand for? Sorry I'm pretty new to this forum :)

So you mean to say starting an secured credit card wouldn't help me much with my scores?

and no I don't have anyone who's in the military or is a member of USAA. :( I guess NFCU is my only choice if I'm going to start a secured CC and work my way up to an unsecured CC. Does NFCU only offer to those who has a full membership? Do I have to know someone who is a member of the Navy for me to get offered an unsecured credit card?

So you think I can still GW my lates because I have 2 30-days lates, 1 60-days late, and 1 90-days late on my credit report. :(

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 04:33:12 GMT

Ok. Because I'm just worried for having too much inquiries because one time I got a letter why I got denied for an application was becase of a "Hard Inquiry" while I only have 4 inquiries in my report and 1 of them is an unknown inquiry and I wasn't aware of it.

I guess my best bet would be NFCU if ever they have a secured credit card.

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 04:33:44 GMT

athan12 wrote:
Yes, I still have my BofA Stundent Credit Card, and that's my only CC as of now.

What does PIF stand for? Sorry I'm pretty new to this forum :)

So you mean to say starting an secured credit card wouldn't help me much with my scores?

and no I don't have anyone who's in the military or is a member of USAA. :( I guess NFCU is my only choice if I'm going to start a secured CC and work my way up to an unsecured CC.

PIF is paid in full..and unfortunately NFCU is a lot harder to get into than USAA with no military affiliation...maybe try DCU?

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 04:43:16 GMT

I'm confused. So I was reading this article on yahoo about people with almost perfect scredit score, and one of them said that instead of PIF every month like any other CC holders do. He pays his credit card every 4 or 5 days and he also use his CC almost everytime even buying a coffee.

Here's the link and read the first persons statement

http://finance.yahoo.com/news/secrets-of-the-credit-score-superstars.html

I'm confused if I should always pay in full or split my balance and pay it off every friday or every 4-5 days.

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 04:50:38 GMT

athan12 wrote:
I'm confused. So I was reading this article on yahoo about people with almost perfect scredit score, and one of them said that instead of PIF every month like any other CC holders do. He pays his credit card every 4 or 5 days and he also use his CC almost everytime even buying a coffee.

Here's the link and read the first persons statement

http://finance.yahoo.com/news/secrets-of-the-credit-score-superstars.html

I'm confused if I should always pay in full or split my balance and pay it off every friday or every 4-5 days.

That's completely up to you :) there's different ways to PIF. In general, when we say PIF, we mean to avoid interest. So, PIF could be before the statement date, could be before your payment date to avoid interest after the grace period, etc. This dude likely pays every 4-5 days to avoid his cards posting a balance. To maximize your FICO score, what you should do is have a balance report only on one card, then have a 0 balance report on every other card.

Since you only have one card, what you can do is have a 9% balance report on it by statement date. You can do this any way you please. Maybe you can only use your card for a few purchases, let it report the <9% utility, then pay it all by the due date to avoid interest, and repeat. Or, you can use it for all your purchases, then before the statement date, pay a good chunk on it so it reports the <9%, then pay before the due date for the rest. Or you can do what the guy said above, pay every 4-5 days, so that those small cups of coffee balances eventually reports the small utilization.

Do what feels comfortable for you :) The key is to always have a small balance report, and preferably pay everything by the due date to avoid interest. Once you start doing it, you'll get into the swing of it and it'll all make sense!!

Re: Secured credit card

athan12 — Sun, 30 Dec 2012 05:17:34 GMT

Now I feel enlightened. So if my CL is $1000, its advisable to only use 9% of it before the statement date which is $90 per statement.

You said the best way to build up my score was to have 0 balances on any other card and only have balances on one card. So is it still advisable to get a secondary secured card even if I'm only supposed to have balances on one card?

Re: Secured credit card

bichonmom — Sun, 30 Dec 2012 05:17:49 GMT

#1, You need to have some military affiliation to join nfcu. Their criteria are on their website https://www.navyfederal.org/about/eligibility-checklist.php

#2, I didn't read the article so I'm not sure why that person would choose to pay every few days. Some people do that because it helps them to budget their money easier. It doesn't help your FICO or history with the cc to pay that often. You only need to pay once a month By the due date.

#3, In an effort to maximize their FICO, some people will PIF before the stmt cuts so that the CCs report a zero bal to the CRAs. They let only one cc report a bal of less than 10% of their CL. Since you only have one cc right now, it's not really relevant.

Re: Secured credit card

daybreakgonesXe — Sun, 30 Dec 2012 05:20:48 GMT

athan12 wrote:
Now I feel enlightened. So if my CL is $1000, its advisable to only use 9% of it before the statement date which is $90 per statement.

You said the best way to build up my score was to have 0 balances on any other card and only have balances on one card. So is it still advisable to get a secondary secured card even if I'm only supposed to have balances on one card?

Yup, that's right!

And yes, actually. The sweet spot for maximizing your FICO score is having at the very least 3-4 revolving accounts. So, if you would like to get favorable rates one day on an auto loan or mortgage, it is best to build your portfolio! However, don't feel that there's any rush if you don't plan on applying for any loans in the near future. In the credit game, slow and steady wins the race :P

Re: Secured credit card

bichonmom — Sun, 30 Dec 2012 05:29:47 GMT

athan12 wrote:
Now I feel enlightened. So if my CL is $1000, its advisable to only use 9% of it before the statement date which is $90 per statement.

You said the best way to build up my score was to have 0 balances on any other card and only have balances on one card. So is it still advisable to get a secondary secured card even if I'm only supposed to have balances on one card?

You can use as much of your $1k CL during the month as you want. Right now, I wouldn't even worry about the <10% util reporting. That only applies when you're optimizing your FICO for a cc app. If you do only want 10% to report, you can make a pmt for less than the balance BEFORE your stmt cuts, and leave a small bal of $90 on the card. Then when the stmt cuts, it will report the $90 bal to the CRAs. But as I said,that only really matters if you're planning in applying for credit.

at some point, it would be a good idea for you to open a second card. I just don't know if this is the best time because your lates are so recent and you really have no positive history reporting. If you try to GW the lates and start building a pos history, then in 6 mos, you might app for a cc. If you're able to get the lates off, then you wouldn't even need a secured cart at that point.

Also, I doubt your denial was because of inquiries. It was likely because you had some inq and no positive history. Sometimes CCs seem to use inq as a reason for denial, but it isn't always the case. People here have gotten prime CCs with huge CLs and have a lot of inq. That doesn't mean you shouldn't be aware, I treasure my inq and am very careful about how many I get. I have even frozen my credit reports so that no one can do a HP without my knowledge.

Heres a list of common abbreviations used here http://ficoforums.myfico.com/t5/User-Guidelines-General/Common-Abbreviations/td-p/88458