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Valued Contributor
Dustink
Posts: 3,097
Registered: ‎10-02-2012
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Re: Annual Fees on cards!!

[ Edited ]


Not always (Opensky and similar), but I think more so than BOFA, US Bank, or even Cap One.

 

I may have not been clear before, not everyone can come up with the roughly $300 deposit (or even $99 for Cap One).  Where FP shines is roughly $175 net-30 money for the utterly unbanked and those who are living week to week in the PDL space.  I'm not certain we've ever heard of a legitimate app to FP being denied?  FP plays down in the Cashcall and Springleaf space. Cap One isn't there and certainly no national bank is (at least publically through them directly).

 

For folks that can come up with a deposit and don't have glaring secured card denial flags such as open judgements on their reports, they do have other, and better options.  Most of the people which stumble across this forum fall into that demographic, but there's a non-trivial portion of the population which are substantially worse off than they are.


I have had banks tell me the secured card was a guaranteed approval. 

NFCU said they could do a secured loan without a credit pull.

To me, somebody should not have a credit card if they cannot afford to put $300 down to secure it. They need to wait until they have more liquid assets, otherwise they are just going to get themselves into trouble again. 

Maybe that part of the population that is substantially worse off needs to wait until they are in a better position. If things are so tough, paying huge fee's will not help their budget at all.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
Valued Contributor
my-own-fico
Posts: 1,307
Registered: ‎01-05-2010
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Re: Annual Fees on cards!!


bs6054 wrote:
Yes, just checked.  My year end statement (from Feb) lists $1100 back, this doesn't include the stuff from Dec.  This includes $150 sign up, about $50 from gas and others, and the rest from $19K grocery spending (so for the Feb-Jan it will be more like $1400).  Now some of the groceries might have been those thin plastic groceries that you can take to other stores, not a lot but as the cap approaches, we did get some more of those.   But this is mainly our family spend at Whole Foods, so we need all that cash back!

 


CreditScholar wrote:
My fiancee and I spent 15k on groceries last year, and there's only 2 of us plus a dog. It's possible.

 


bs6054 wrote:
Yes, this was 3-4 people, and also depends where you shop.  Whole Foods adds up quicker than Walmart for example.

 

Americans used to spend fifteen percent of their income on food and half of that on health care. Now it's the opposite. You pay for good food today, or you pay your doctor tomorrow. Living in a culture of financing with the due date beyond the horizon, we are allergic to high upfront prices. I love Whole Foods, and I go to sleep knowing that eating their fresh produce will keep my health and its immunity system just fine tomorrow. The same goes for those of your annual fees that pay you back handsomely in the form of say annual airline companion tickets. I'm not unaware of some who are too pressed to feel able to save for tomorrow, but it's on sunnier days that you put away for a rainy day. There are ways to cut, and the annual credit card fees may not always be the first expense to go, just as real food isn't necessarily more expensive. When the processed food is reduced and the craving goes away, there is less food to pay for.

Are you living within your means?
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Revelate
Posts: 9,751
Registered: ‎12-30-2011
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Re: Annual Fees on cards!!


Dustink wrote:

I have had banks tell me the secured card was a guaranteed approval. 

NFCU said they could do a secured loan without a credit pull.

To me, somebody should not have a credit card if they cannot afford to put $300 down to secure it. They need to wait until they have more liquid assets, otherwise they are just going to get themselves into trouble again. 

Maybe that part of the population that is substantially worse off needs to wait until they are in a better position. If things are so tough, paying huge fee's will not help their budget at all.


They're paying roughly 400% interest in associated fees with PDL's today; in some cases that has been as high as roughly 650%.

 

FP's, or CreditOne's, or similar fees, are trivial in comparison.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
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Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
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Re: Annual Fees on cards!!


Revelate wrote:

Dustink wrote:

I have had banks tell me the secured card was a guaranteed approval. 

NFCU said they could do a secured loan without a credit pull.

To me, somebody should not have a credit card if they cannot afford to put $300 down to secure it. They need to wait until they have more liquid assets, otherwise they are just going to get themselves into trouble again. 

Maybe that part of the population that is substantially worse off needs to wait until they are in a better position. If things are so tough, paying huge fee's will not help their budget at all.


They're paying roughly 400% interest in associated fees with PDL's today; in some cases that has been as high as roughly 650%.

 

FP's, or CreditOne's, or similar fees, are trivial in comparison.

 


Right, I don't think Dustink gets the scale:  This is "I need food for the kids, won't get paid for three days and I have no money".  A PDL will "help" in this situation, FP will be much cheaper.  You can't wait until you are in a better position, although indeed all these fees hurt greatly.

Valued Contributor
Dustink
Posts: 3,097
Registered: ‎10-02-2012
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Re: Annual Fees on cards!!


bs6054 wrote:

Revelate wrote:

Dustink wrote:

I have had banks tell me the secured card was a guaranteed approval. 

NFCU said they could do a secured loan without a credit pull.

To me, somebody should not have a credit card if they cannot afford to put $300 down to secure it. They need to wait until they have more liquid assets, otherwise they are just going to get themselves into trouble again. 

Maybe that part of the population that is substantially worse off needs to wait until they are in a better position. If things are so tough, paying huge fee's will not help their budget at all.


They're paying roughly 400% interest in associated fees with PDL's today; in some cases that has been as high as roughly 650%.

 

FP's, or CreditOne's, or similar fees, are trivial in comparison.

 


Right, I don't think Dustink gets the scale:  This is "I need food for the kids, won't get paid for three days and I have no money".  A PDL will "help" in this situation, FP will be much cheaper.  You can't wait until you are in a better position, although indeed all these fees hurt greatly.


Yeah, I was looking at it from a building credit/rebuilding credit stand point.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
New Contributor
antae
Posts: 74
Registered: ‎07-15-2012
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Re: Annual Fees on cards!!

Amex BCP was the first card I obtained with an annual fee.  We received $975 cash back for 2012 so it more than offsets the fee.  AF's certainly aren't for everyone though depending on your use of the card.

Amex BCP 25k '11 - Amex PRG '11 - Chase Sapphire 17.5k '95 - Citi Platinum Select 11.5k '93
Valued Contributor
p-
Posts: 2,655
Registered: ‎06-05-2008
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Re: Annual Fees on cards!!


corymcd88 wrote:

Banks are very strict on removing or waiving the AF. My bank of America Cash $32AF and Wells Fargo $25AF. Well two cards are being closed soon.


There are many of us that started out with subprime annual fee cards - those annual fees are what makes the bank see us as worth the risk when our scores are low.  As your credit improves, the best thing to do is push hard for Product Changes to higher tier cards.  That way you keep the old history open, but eliminate the subprime altogether, along with the fees.  My Cap1 Platinum rebuilder is now a no af cash rewards.  My Orchard 79 fee is waived for life, and I will convert that soon too.

 

Other cards offer higher rewards in exchange for an annual fee.  The fee has a dual purpose; it helps pay for benefits, and insures you will use the card, thus generating revenue for the bank to pay for the extra services.  A card like that makes sense if based on your spending patterns, less annual fees, your net gain is higher than a fee free rewards card.  Sometimes the math works in your favor, like with Chase Sapphire Preferred.  With a fee waiver the first year, and 400 dollars in bonus rewards, your AF is neutral the first 5 years.  After that it should be re-evaluated.  It's hard to beat cards like the Freedom.

 

The only card I currently have with an annual fee is my Amex Zync.  For 25 dollars a year, I get my Amex back dating, and the ability to post balances without affecting my utilization.  Although the rewards benefits aren't better than other cards, the small fee is worth it for the other benefits.

12-15-14: FICO EXP: 813 - EQU:802 - TRAN: 756 - AVG: 790 +240 points from JUN 2008 - MY CREDIT JOURNAL

Senior Contributor
Open123
Posts: 4,220
Registered: ‎02-23-2011
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Re: Annual Fees on cards!!


p- wrote:

corymcd88 wrote:

Banks are very strict on removing or waiving the AF. My bank of America Cash $32AF and Wells Fargo $25AF. Well two cards are being closed soon.


There are many of us that started out with subprime annual fee cards - those annual fees are what makes the bank see us as worth the risk when our scores are low.  As your credit improves, the best thing to do is push hard for Product Changes to higher tier cards.  That way you keep the old history open, but eliminate the subprime altogether, along with the fees.  My Cap1 Platinum rebuilder is now a no af cash rewards.  My Orchard 79 fee is waived for life, and I will convert that soon too.

 


Right, the conundrum for the rebuilder is the "annual" fee cards used to rebuilt are also the oldest tradelines.  I'd imagine the issuers all know this and realize most are hesitant to cancel the card and have little motivation to waive the fee.

 

Early in rebuilding, I always recommend to get an Amex asap, if possible.  The fee will be well worth it, because once rebuilding is done, one can just purge and cancel all the fee rebuilder cards without freeting over the "oldest" tradeline closure.

 

In my view, the best thing to do once rebuilding is finished is to purge all the annual fee rebuilder toy limit cards.

Valued Contributor
bs6054
Posts: 1,673
Registered: ‎11-11-2012
0

Re: Annual Fees on cards!!


p- wrote:

corymcd88 wrote:

Banks are very strict on removing or waiving the AF. My bank of America Cash $32AF and Wells Fargo $25AF. Well two cards are being closed soon.


There are many of us that started out with subprime annual fee cards - those annual fees are what makes the bank see us as worth the risk when our scores are low.  As your credit improves, the best thing to do is push hard for Product Changes to higher tier cards.  That way you keep the old history open, but eliminate the subprime altogether, along with the fees.  My Cap1 Platinum rebuilder is now a no af cash rewards.  My Orchard 79 fee is waived for life, and I will convert that soon too.

 

Other cards offer higher rewards in exchange for an annual fee.  The fee has a dual purpose; it helps pay for benefits, and insures you will use the card, thus generating revenue for the bank to pay for the extra services.  A card like that makes sense if based on your spending patterns, less annual fees, your net gain is higher than a fee free rewards card.  Sometimes the math works in your favor, like with Chase Sapphire Preferred.  With a fee waiver the first year, and 400 dollars in bonus rewards, your AF is neutral the first 5 years.  After that it should be re-evaluated.  It's hard to beat cards like the Freedom.

 

The only card I currently have with an annual fee is my Amex Zync.  For 25 dollars a year, I get my Amex back dating, and the ability to post balances without affecting my utilization.  Although the rewards benefits aren't better than other cards, the small fee is worth it for the other benefits.


That doesn't make too much sense!  It should be re-evaluated as soon as the first AF is due.  You already have the $400, the question is "should I pay an AF for another year of benefits" 

Valued Contributor
p-
Posts: 2,655
Registered: ‎06-05-2008
0

Re: Annual Fees on cards!!


bs6054 wrote:

p- wrote:

corymcd88 wrote:

Banks are very strict on removing or waiving the AF. My bank of America Cash $32AF and Wells Fargo $25AF. Well two cards are being closed soon.


There are many of us that started out with subprime annual fee cards - those annual fees are what makes the bank see us as worth the risk when our scores are low.  As your credit improves, the best thing to do is push hard for Product Changes to higher tier cards.  That way you keep the old history open, but eliminate the subprime altogether, along with the fees.  My Cap1 Platinum rebuilder is now a no af cash rewards.  My Orchard 79 fee is waived for life, and I will convert that soon too.

 

Other cards offer higher rewards in exchange for an annual fee.  The fee has a dual purpose; it helps pay for benefits, and insures you will use the card, thus generating revenue for the bank to pay for the extra services.  A card like that makes sense if based on your spending patterns, less annual fees, your net gain is higher than a fee free rewards card.  Sometimes the math works in your favor, like with Chase Sapphire Preferred.  With a fee waiver the first year, and 400 dollars in bonus rewards, your AF is neutral the first 5 years.  After that it should be re-evaluated.  It's hard to beat cards like the Freedom.

 

The only card I currently have with an annual fee is my Amex Zync.  For 25 dollars a year, I get my Amex back dating, and the ability to post balances without affecting my utilization.  Although the rewards benefits aren't better than other cards, the small fee is worth it for the other benefits.


That doesn't make too much sense!  It should be re-evaluated as soon as the first AF is due.  You already have the $400, the question is "should I pay an AF for another year of benefits" 


I guess that makes sense....

12-15-14: FICO EXP: 813 - EQU:802 - TRAN: 756 - AVG: 790 +240 points from JUN 2008 - MY CREDIT JOURNAL


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