Bank of America secured card question

[Anonymous]

Hello, I was offered a bank of america secured card with a line of 500 and deposit of 99. I just want to know how this will work, because I keep hearing secured cards are more dangerous and risky, how is that? And I hear it gets worse when you can pay your bills, they charge your regular deposit checking account for the amount and interest fees etc owed. Is that true?

[enharu]

a secured card is basically an unsecured card + deposit as collateral in case you defaults on them.

everything is the same as an unsecured card. the only difference might be the rewards program.

read the fine print of everything before you apply.

a secured card is as risky as an unsecured card: if you don't pay, or pay late, then you're in trouble.

if you can pay your bills, it is a GOOD thing. by taking money from your regular checking, i think those people who told you the story are referring to that you can pay from your checking account directly, without having to mail them a check or go through any hassle. There is no interests fee if you pay in full.

[Anonymous]

Thanks for your quick reply, I am sorry I meant when you can't pay your bills, would they act as the owner of the secruity deposit checking account I provided them with? because I have a checking account with them and in worst case scenario I wouldn't want to them to automatically charge whatever is in my checking for what is owed in my secured credit card or whatever the extra charges and fees may be.

[Open123]

Secured cards are a great way to start building or rebuilding credit. 

In my view, B of A has the best secured cards in the industry.  If you can't pay your bills, then they'll excercise the right of "offset" with your deposit.  They will also try and collect whatever you may owe that wasn't covered by your deposit.

Either way, it's a pretty unpleasant process if you can't pay, whether it's a secured or unsecured credit card.

[enharu]

If you can't pay your bill, they cannot just take over your checking or savings account. What they do is to offset whatever security deposit you paid them. If there's a remainder, they will send you a check for the rest. If you still owe them money, they will pursue it.

If you still don't pay by then, they will send your bill to collections.

A collection agency will pursue you for the money you owe. 

VERY RARELY, they might take you to court just to recover whatever you owe them. Only a court ruling by a judge can allow them to act as an owner of your assets. This can include not just your checking account with them, but also any other banking accounts, assets (property, car, etc). However, very rarely do this happen. It all depends on the amount you owe, and whether they're bothered enough to go through all that hassle.

They CANNOT just automatically charge whatever is in your checking or any other bank accounts you have, unless you permitted automatic payments yourself.

[Open123]

You need to check, since some banks (not sure which) may have language in the T&C that allows them to "offset" your charges with deposit accounts you have with them at their discretion if unpaid.

All things being equal, I prefer my creditors and main banking institution to be different.

[Mavsman]

Be careful.. I had one that went into collection and was sold to a C.A. They continued to charge fees years after the account was charged off...started at 500... Now at 1400... If you do it stay on top of it.

[Chrisla2077]

I want to apply for this card too as I have had accts with them for years, but I'm afraid of taking a HP and getting denied. Even cap 1 denied me for their secured 6 mos ago

[HiLine]

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@Chrisla2077 wrote:

I want to apply for this card too as I have had accts with them for years, but I'm afraid of taking a HP and getting denied. Even cap 1 denied me for their secured 6 mos ago

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Make sure you have at least 10k in assets with them when you apply. Bank of America is very generous with issuing credit to banking customers.