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03-14-2012 10:56 PM - edited 03-14-2012 10:58 PM
03-14-2012 10:58 PM
a prepaid card does not build credit only a secured card does did you mean secured? Also its your credit score and report that other cc companies look at. How is your score?
03-14-2012 11:07 PM
CaN YOU GIVE ME A BETTER CREDIT PICTURE hOW LONG HAVE THES ACCOUNTS BEEN OPEN DO YOU HAVE AUTO LOAN OR MORTGAGE OR STUDENT /PERSONAL LOANS ANY late payments on the cards and what is ypur utilization?
03-14-2012 11:14 PM - edited 03-14-2012 11:15 PM
Well, if it were up to me, and I was the one reviewing your report and I saw a line for $5000, which is Visa Siggy territory, I wouldn't approve you for an unsecured line of the same, or a higher amount. Having $5000 to put into a secured card may show that you are somewhat liquid when it comes to bills, and it may show somewhat of a disposable income but it doesn't necessarily prove to the lender that you are able to sustain a high limit card. The best way to get a high limit card, is1.) Having the income to back up the credit line, and 2.) Having a history with unsecured tradelines that show on time payment history, and good utilization.
03-14-2012 11:15 PM
People seem to have differing opinions on that. Some are of the opinion that having higher credit limits means that other creditors are more likely to match your higher limits when you get new cards. While I really don't know if that's true or not, I know it's always hard to get your first card with a decent credit limit. Nobody wants to be the first one taking a bigger risk with you, so getting your first 4-digit (or 5-digit) credit line is harder than it should be.
Can having a high-CL secured card help with that? Sure, in theory. At least, the chances of it hurting you are relatively low. But just because you have one higher limit card doesn't mean other creditors will follow suit. After all, I had a $3k card, and other creditors will still giving me lines of $300 and $500, then finally $1k and $1.5k. But nobody matched (or exceeded) that $3k line.
Overall, having a good payment history with no late payments or baddies is more likely to help. That's why some people go from having a card with a $500-750 toy limit into $5k+ lines all of a sudden. Once you've built enough positive history, prime creditors are going to be more likely to take a chance on you and give you a decent limit.
03-14-2012 11:19 PM
In general, the answer is yes. Generally speaking, CCs are more likely to give higher limits when they see you already have them and have been managing them well. However, there is no guarantee that your first unsecured card is going to be a high limit. CCCs can see on your CR that the card is secured, so they may start you with a lower limit.
It's also a good idea to have at least 2 open TLs. You'd be better off having 2 CCs @ $2500 each, than 1 @ $5k. When you go to app for an unsecured card, having 2 active TLs will help you more than having only 1 larger one. (This advice was given to me by a loan officer at my bank, and was a tremendous help when I started apping for CCs. I would have been denied by some CCs if I had only had the 1 TL reporting.)
03-14-2012 11:21 PM
Having $5000 to put into a secured card may show that you are somewhat liquid when it comes to bills, and it may show somewhat of a disposable income but it doesn't necessarily prove to the lender that you are able to sustain a high limit card.
Not all secured cards report as secured, so the other lenders might not know that it's a secured card. To them, it'll look like you just have a $5k card for some reason.
Then again, if you have a couple of toy limits and one higher limit card, creditors are probably going to want to see how you handle that card for a while before risking giving you a similar limit. After all, if you've only had the high-limit card for short time, they have no way of knowing if you're suddenly going to go buck wild and run up an uncontrollably high balance.
I have good self-control with my credit use, but I'll admit that going from $300-750 to limits I had to $14k on two cards definitely caused me some temptation to just go BUY STUFF.
03-14-2012 11:23 PM
In general, the answer is yes.
See, but in my case, the answer was no After all, even having a $3k card (which didn't report as secured), NFCU only started me out at 1.5k.
Existing credit limits really aren't everything - even with the two $14k lines I have open, Chase gave me "only" $2.5k on my Freedom card. Not that I'm complaining since it could have been something awful like $500, but it was nowhere near as high as it could have been.