Credit Cards

[IKnowDoYou]

Hi folks, sorry for all of the random questions... I'm almost done with our CCCs plan (three more cards left; should be done by Aug-Sep), and seeing that all of my aged cards are closed, I will have zero cards, save an HSBC card I opened up a few months ago that has a $600 limit. Now that my wife and I are gainfully employed (finally out of school), we would like to have credit cards that we can earn points on instead of paying with our bank cards. I understand that getting a CL that matches our monthly spending habits will take some time, but I was thinking about getting a secured account to speed up the process a bit, instead of getting one or two low limit cards and playing the CLI waiting game. So I have two questions regarding the BoA Secure card: - I understand that you put a deposit down (up to 10k), and that if after 9-12 months of good activity, that card turns into a normal CC, with them returning the deposit. My question is are you stuck with your initial "investment", or can you up your CL by adding funds to the collateral? Meaning, if I initially put $2,500 down, and have a $2,500 limit, could a month or two later send them another $2k to up my limit to $4,500? - Also, do the three credit agencies list secured cards differently than a non-secured card? If they do, does this damage your Fico score, even temporarily? My Fico score is 648, if that helps... Thanks, Ryan

[debtisgood]

Yes with most companies you can increase the secured deposit and thus up your credit line. I believe BoA does this as well.

Secured cards do report as such and they do not aid your score as much as unsecured lines, but they won't hurt your report. The BoA card shouldn't harm your score, it just wouldn't raise it as an unsecured card with spotless payment history. Your score is getting into the acceptable range for prime cards, I would think you could pick up a secured and by the time it converts over, apply for another prime card that you want with rewards with another bank as well.

[bridgetkaryn]

Hi There,

Couple of idea's on credit...  but one question first... You said that you wanted a card where you earned "points" I don't believe that secured cards offer that...

1. Hooters MC- They are pretty liberal on giving out credit. My FICO score is 637 (they only pull TU) and I received a $1500 CL. They have a rewards system where you earn points for meals at hooters

2. WaMu Platnium MC- They may or may not be requiring you to be a WAMU bank customer first right now (due to the credit crunch) I wasn't one, I opened a checking account with a $50 bank tranfer online (they don't have any branches near me) and they offered me (immediately) a $2500 CL on their Platnium MC just by opening the account. i was preapproved. They also offer points for using their debt card and no fee's for withdrawls from other ATMs (i think they may even reimburse you for fees other banks charge)

3. Crown Jewelers- While not a credit card, they approve with no credit pulls and usually at $1500. You have to buy something before they will report but it is a good quick way to drop your UTL if you are looking to boost your score.

4. I would also check out the website www.whogavemecredit.com, you can enter in your FICO scores for each of the CBs and find cards that people have applied for and been approved (or not) with a close range to your credit score. You can also find out usually what CRA they pull from. It is a great resource for testing the waters if you are looking at specific cards. It seems to me that your scores should be high enough to get an unsecured card of some sort...

Good Luck!

[IKnowDoYou]

Thanks for all of the responses.

Just a clarification on the points part... I understand that the secured card doesn't give any perks, but what I'm looking for is to eventually get there. I figure once I get the secured card to turn to an unsecured card that I will eventually be able to apply for whatever point card I'm looking for.

I'll check out the cards listed, as well.

Basically the reason I was looking to up the secured card over time, though, is that several of the cards I lost due to the CCCs had limits north of 10k, and I think that low limit cards would be useless to me; I would end up using my bank card for purchases and the CLI will never increase because of the lack of usage. My wife and I tend to burn through 3-5k a month on things that can be purchased by a card (now we make enough to pay it off every month), and once we can get to a place where we can get points for it, we'll rack them up pretty quick. But that requires a card with a high limit.

Thanks again everyone!

Ryan

Message Edited by IKnowDoYou on 06-28-2008 07:45 PM

[marcuscan]

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IKnowDoYou wrote:
Thanks for all of the responses.

Just a clarification on the points part... I understand that the secured card doesn't give any perks, but what I'm looking for is to eventually get there. I figure once I get the secured card to turn to an unsecured card that I will eventually be able to apply for whatever point card I'm looking for.

I'll check out the cards listed, as well.

Basically the reason I was looking to up the secured card over time, though, is that several of the cards I lost due to the CCCs had limits north of 10k, and I think that low limit cards would be useless to me; I would end up using my bank card for purchases and the CLI will never increase because of the lack of usage. My wife and I tend to burn through 3-5k a month on things that can be purchased by a card (now we make enough to pay it off every month), and once we can get to a place where we can get points for it, we'll rack them up pretty quick. But that requires a card with a high limit.

Thanks again everyone!

Ryan

Message Edited by IKnowDoYou on 06-28-2008 07:45 PM

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former BoA Financial Consultant here.......the BoA secured card is a very sound way to go about things.  get in the good graces of BoA and they will reward you....of course this is under the assumption that you haven't made any other errors outside of BoA's credit allowance.  

The key is, once that 9 - 12 mos time frame has passed be sure to not keep that particular card.  once they have given you your deposit back that means that the credit dept. has a more favorable opinion of you so you should be able to go back to them and leverage yourself in to an even more favorable card.

I can recall having clients come to me and they had kept that Secured card years after they're funds had been refunded.  I always found them a new card....one w/rewards/ better rates/ etc.  Act on that cue and get a better card.  It won't even be a hard pull on your CR.

mc

[voidman]

You could technically add rewards program to Wells Fargo Secured card, they charge $19 ( i think) enrollment fees for the rewards program.

It could be worth it as you can earn more than the AF and Enrollment fees of the card.

[cheddar]

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debtisgood wrote:

Secured cards do report as such and they do not aid your score as much as unsecured lines, but they won't hurt your report. The BoA card shouldn't harm your score, it just wouldn't raise it as an unsecured card with spotless payment history. Your score is getting into the acceptable range for prime cards, I would think you could pick up a secured and by the time it converts over, apply for another prime card that you want with rewards with another bank as well.

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The scoring algorithm is actually indifferent to the "Secured" designation.  A secured card contributes to one's score just as much as an unsecured one.

[voidman]

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marcuscan wrote:

The key is, once that 9 - 12 mos time frame has passed be sure to not keep that particular card. I can recall having clients come to me and they had kept that Secured card years after they're funds had been refunded. 

mc

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To keep or should not keep?

[debtisgood]

Sorry Cheddar, that reads counter to what I have read on other threads in the past. So a secured card from a bank is equivalent to an unsecured bank card?

[cheddar]

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debtisgood wrote:

Sorry Cheddar, that reads counter to what I have read on other threads in the past. So a secured card from a bank is equivalent to an unsecured bank card?

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As far as FICO is concerned, yes.  The "Secured" designation doesn't affect FICO one bit.

I don't doubt that you may have read that somewhere.  Our FICO scoring knowledge has evolved over time, so I'm sure there are some old threads out there with some inaccurate information.

Even the veteran posters around here were FICO newbies once upon a time!

Message Edited by cheddar on 06-29-2008 12:37 PM