High UTIL - Secured Card as Backup?

[Anonymous]

I currently have one CC account with US Bank (65% UTIL; 13K/20K), and due to what I read in the "Lunch with a Banker" thread, I am considering diversifying my CC portfolio before US Bank can take AA against my account.

First of all, I am paying 2X the minimum each month to bring the balance down. I also moved my recurring items (gym membership, etc) to my debit card. I plan on applying for a card through my local credit union around Dec. 1.

I tried some of the "pre-qualify" sites (Cap 1, HSBC, etc.), and it looks like the high UTIL is an issue. I did not have any pre-approved offers on the "pre-qualify" sites. My scores are in the 695-730 range, with no baddies on any of my accounts.

If I can't get approved by my local CU, would a secured card be an option? Around Dec. 1, I could deposit $1K - $2K to open a secured account. Would high UTIL cause a problem qualifying for a secured card? Also, what secured card issuers would offer the following features:

- Interest paid on deposit/collateral account

- Ability to add to deposit/collateral account to increase CL

- Graduate to unsecured in 12 months

- Annual fee <$50.00

- Interest rate < 20%

I'd like to get a backup card in place so I can SD the USB card if they CLD or chase down the balance.

Thanks,

JD

[Tons_of_Debt]

It would definitely help to diversify your credit portfolio, though I'm not sure I'd feel comfortable taking money I could be using to knock down that debt in order to do so.

Are there any areas of your budget you could trim which would allow you to knock that debt down quicker than 2x the minimum payment?

[Anonymous]

the cap1 prequal is a joke It doesn't soft a report.

[Anonymous]

>> Are there any areas of your budget you could trim which would allow you to knock that debt down quicker than 2x the minimum payment?

I could do one or more of the following:

1) I am eligible for a cell phone upgrade from Sprint in November. I could use my upgrade to get a phone that would "tether" to my computer, and cancel the land line and broadband service. That would save me $70.00 per month.

2) Alternatively, I could cancel the mobile phone from Sprint, but I would have to pay a $150 cancellation fee to get out of my contract (which ends in 11/2010). After recovering the cancellation fee, that would save me $80.00 per month. Or I could "downgrade" to a phone that doesn't have data service, which would save $35.00 per month.

3) I am brown-bagging my lunch about 50% of the time. Brown-bagging 75% of the time would save me $50.00/mo. and 100% of the time would save me $100.00.

4) I could review my auto insurance coverages with Progressive online and go from a $500K limit to a $250K limit. Not sure how much money I would save, however. My homeowner's insurance was the lowest bid a year ago.

5) I could temporarily decrease my 401(k) contribution (currently at 10%; I would drop it to 5% until I got my US Bank UTIL below 35%). Also, I plan on discontinuing my FSA deductions in 2010 (which would save about $70.00/mo.).

6) I do not have cable/satellite service.

Thanks,

JD

[creditwherecreditisdue]

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@Anonymous wrote:

5) I could temporarily decrease my 401(k) contribution (currently at 10%; I would drop it to 5% until I got my US Bank UTIL below 35%).

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Do this. Make sure your CC payments are always 5% or more of the balance owed. If you do that you will be alright.

When your total UTIL and individual account UTIL are both < 35% you can consider app'ing for unsecured credit again.