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Secured Credit Card, Future closure?

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Jungook
Regular Contributor

Secured Credit Card, Future closure?

Hi again everyone,

 

I have a question regarding secured credit cards from the following banks

 

-Wells Fargo

-Bank of America

-First National Bank of Omaha

-Capital One

 

I began my search for the perfect secured card and I've stumbled upon these four. I was told by fellow forum members that the Bank of America secured Visa is the best secured card out there but I don't seem to know why. All of these cards seem pretty equal other than the annual fee. So is there any reason to pick and choose a certain card over the other, other than seeking the one with the highest acceptance rate?

 

Now the real question that I seek an answer to is how important is the process of getting a secured card into an unsecured card?

 

I know that unsecured cards allow me to retrieve my security deposit and increase my credit ceiling along with any card benefits featured. However, I don't really see the appeal of these cards as their rewards are severely lackluster (I'm talking about the unsecured cards that I eventually upgrade to) and I would much rather apply for other cards which I plan on doing after 1 years worth of credit reporting on my secured card.

 

So to sum these mumbo jumbo mess that is swirling in my brain, here are the questions.

 

1. Which of these four cards have the highest acceptance rate for students with no credit history? (I bank at a local community bank that offers secured cards through First National Bank if that would increase my chances in any way)

 

2. Is it better to seek out the highest acceptance rate or take my chances on a card that has the potential to become an unsecured card with some decent rewards?

 

3. How important is it that I keep my secured credit card account open as I am aware that credit age/history is a factor of my FICO score.

 

4. How much will it hurt my credit score if I choose to close my secured credit card rather than trying to convert it to an unsecured card and stick in somewhere safe? And will I receive my security deposit back if I do close?

 

 

5. Somewhere in my research I found a statement saying that even if I do close a credit card, the information will still be found on my credit history for up to 10 years. Surely after 10 years it doesn't matter if I closed my secured card as I would only be losing 1 years worth of credit reporting as to the future 9 years I plan to have in that same time frame.

 

Cheers and thank you if you can understand what I am trying to get across.

Message 1 of 10
9 REPLIES 9
djc1puno
Valued Contributor

Re: Secured Credit Card, Future closure?


@Jungook wrote:

Hi again everyone,

 

I have a question regarding secured credit cards from the following banks

 

-Wells Fargo

-Bank of America

-First National Bank of Omaha

-Capital One

 

I began my search for the perfect secured card and I've stumbled upon these four. I was told by fellow forum members that the Bank of America secured Visa is the best secured card out there but I don't seem to know why. All of these cards seem pretty equal other than the annual fee. So is there any reason to pick and choose a certain card over the other, other than seeking the one with the highest acceptance rate?

 

Now the real question that I seek an answer to is how important is the process of getting a secured card into an unsecured card?

 

I know that unsecured cards allow me to retrieve my security deposit and increase my credit ceiling along with any card benefits featured. However, I don't really see the appeal of these cards as their rewards are severely lackluster (I'm talking about the unsecured cards that I eventually upgrade to) and I would much rather apply for other cards which I plan on doing after 1 years worth of credit reporting on my secured card.

 

So to sum these mumbo jumbo mess that is swirling in my brain, here are the questions.

 

1. Which of these four cards have the highest acceptance rate for students with no credit history? (I bank at a local community bank that offers secured cards through First National Bank if that would increase my chances in any way) ...CAPONE is always friendly with secured cards...wells and bofa you still have to qualify for it even if it's secured...although your local credit union would also be a good bet

 

2. Is it better to seek out the highest acceptance rate or take my chances on a card that has the potential to become an unsecured card with some decent rewards? I would personally do one of each...that way one is guaranteed Smiley Happy

 

3. How important is it that I keep my secured credit card account open as I am aware that credit age/history is a factor of my FICO score. As long as the annual fee is acceptable to you, then keep it...if not once you get better unsecured cards then close the secured cards that don't graduate Smiley Happy

 

4. How much will it hurt my credit score if I choose to close my secured credit card rather than trying to convert it to an unsecured card and stick in somewhere safe? And will I receive my security deposit back if I do close? Remember that even a closed account will still stay on your credit report for 10 years...so AAoA won't be affected until they fall off

 

 

5. Somewhere in my research I found a statement saying that even if I do close a credit card, the information will still be found on my credit history for up to 10 years. Surely after 10 years it doesn't matter if I closed my secured card as I would only be losing 1 years worth of credit reporting as to the future 9 years I plan to have in that same time frame. Same answer as above Smiley Happy GL!

 

Cheers and thank you if you can understand what I am trying to get across.


 



GARDEN GOAL: MARCH 2014
LAST APP: 08/20/2013
---=[NORTHBOUND]=---
Message 2 of 10
Jungook
Regular Contributor

Re: Secured Credit Card, Future closure?

1. Which of these four cards have the highest acceptance rate for students with no credit history? (I bank at a local community bank that offers secured cards through First National Bank if that would increase my chances in any way) ...CAPONE is always friendly with secured cards...wells and bofa you still have to qualify for it even if it's secured...although your local credit union would also be a good bet. Thank you!

 

2. Is it better to seek out the highest acceptance rate or take my chances on a card that has the potential to become an unsecured card with some decent rewards? I would personally do one of each...that way one is guaranteed Smiley Happy What if I were to be approved for both secured cards? How would I be able to retrieve the secured deposit on the card that I choose not to use?

 

3. How important is it that I keep my secured credit card account open as I am aware that credit age/history is a factor of my FICO score. As long as the annual fee is acceptable to you, then keep it...if not once you get better unsecured cards then close the secured cards that don't graduate Smiley Happy Thank you

 

4. How much will it hurt my credit score if I choose to close my secured credit card rather than trying to convert it to an unsecured card and stick in somewhere safe? And will I receive my security deposit back if I do close? Remember that even a closed account will still stay on your credit report for 10 years...so AAoA won't be affected until they fall off Another question, will I be able to receive my secured deposit if I close my account on good terms? Thank you.

 

 

5. Somewhere in my research I found a statement saying that even if I do close a credit card, the information will still be found on my credit history for up to 10 years. Surely after 10 years it doesn't matter if I closed my secured card as I would only be losing 1 years worth of credit reporting as to the future 9 years I plan to have in that same time frame. Same answer as above Smiley Happy GL! Thank you

 

Cheers and thank you if you can understand what I am trying to get across.



 

Message 3 of 10
negg
Frequent Contributor

Re: Secured Credit Card, Future closure?

Of those 4. I would go with FNO bank. There a great bank to get your feet in. Once you have established yourself with them you can get some great cards with better credit.

FNO has some of the lowest APR rates anywhere
CSR.........11,900.......Delta Amex $11,200.........Marriott Rewards Premier $8000.......Discover IT $9700......Citi Preferred $8600.......Chase Freedom $10,800.....Barclay(apple) $11,600......BofA $1500.......Capital One $7400......FNO $9800......Barclay(Hawaiian airlines)$11,000......Citi Costco $15,000. June 1st 2013 0 credit cards and 575 fico. Today 117K in credit and 812 fico and ZERO INQUIRIES......ZERO. 2018 goal. 825 fico.
Message 4 of 10
djc1puno
Valued Contributor

Re: Secured Credit Card, Future closure?

All you have to do is contact the bank and ask for your deposit back Smiley Happy if balance is zero then you will get it all back Smiley Happy i would keep them for about a year just to show good usage and payment history. Then before annual fee hit, close one or both as long as you have other ccs already acquired Smiley Wink theres also sdfcu Smiley Wink capone can be partial deposit but wont graduate (depending on ur credit worthiness or full deposit). If you dont have any ccs atm i would grab 2 secured to start out w...gl!


GARDEN GOAL: MARCH 2014
LAST APP: 08/20/2013
---=[NORTHBOUND]=---
Message 5 of 10
Jungook
Regular Contributor

Re: Secured Credit Card, Future closure?


@djc1puno wrote:
All you have to do is contact the bank and ask for your deposit back Smiley Happy if balance is zero then you will get it all back Smiley Happy i would keep them for about a year just to show good usage and payment history. Then before annual fee hit, close one or both as long as you have other ccs already acquired Smiley Wink theres also sdfcu Smiley Wink capone can be partial deposit but wont graduate (depending on ur credit worthiness or full deposit). If you dont have any ccs atm i would grab 2 secured to start out w...gl!

 

Thank you for the information!

 

On the last part I got a bit confused though. So what I should do is to try and open two secured cards and close one that doesn't graduate or I don't like? Wouldn't I still be hit with an annual fee or at least some sort of early termination fee for doing that?

Message 6 of 10
myjourney
Super Contributor

Re: Secured Credit Card, Future closure?


@djc1puno wrote:

@Jungook wrote:

Hi again everyone,

 

I have a question regarding secured credit cards from the following banks

 

-Wells Fargo

-Bank of America

-First National Bank of Omaha

-Capital One

 

I began my search for the perfect secured card and I've stumbled upon these four. I was told by fellow forum members that the Bank of America secured Visa is the best secured card out there but I don't seem to know why. All of these cards seem pretty equal other than the annual fee. So is there any reason to pick and choose a certain card over the other, other than seeking the one with the highest acceptance rate?

 

Now the real question that I seek an answer to is how important is the process of getting a secured card into an unsecured card?

 

I know that unsecured cards allow me to retrieve my security deposit and increase my credit ceiling along with any card benefits featured. However, I don't really see the appeal of these cards as their rewards are severely lackluster (I'm talking about the unsecured cards that I eventually upgrade to) and I would much rather apply for other cards which I plan on doing after 1 years worth of credit reporting on my secured card.

 

So to sum these mumbo jumbo mess that is swirling in my brain, here are the questions.

 

1. Which of these four cards have the highest acceptance rate for students with no credit history? (I bank at a local community bank that offers secured cards through First National Bank if that would increase my chances in any way) ...CAPONE is always friendly with secured cards...wells and bofa you still have to qualify for it even if it's secured...although your local credit union would also be a good bet

 

2. Is it better to seek out the highest acceptance rate or take my chances on a card that has the potential to become an unsecured card with some decent rewards? I would personally do one of each...that way one is guaranteed Smiley Happy

 

3. How important is it that I keep my secured credit card account open as I am aware that credit age/history is a factor of my FICO score. As long as the annual fee is acceptable to you, then keep it...if not once you get better unsecured cards then close the secured cards that don't graduate Smiley Happy

 

4. How much will it hurt my credit score if I choose to close my secured credit card rather than trying to convert it to an unsecured card and stick in somewhere safe? And will I receive my security deposit back if I do close? Remember that even a closed account will still stay on your credit report for 10 years...so AAoA won't be affected until they fall off

 

 

5. Somewhere in my research I found a statement saying that even if I do close a credit card, the information will still be found on my credit history for up to 10 years. Surely after 10 years it doesn't matter if I closed my secured card as I would only be losing 1 years worth of credit reporting as to the future 9 years I plan to have in that same time frame. Same answer as above Smiley Happy GL!

 

Cheers and thank you if you can understand what I am trying to get across.


 


+1 Smiley Wink

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 7 of 10
todd99
Valued Member

Re: Secured Credit Card, Future closure?

I know this is a little laite but I recently applied for both the Capital One and FNB of Omaha secured credit cards. Actually I just got my FNB of Omaha card today.

 

Here are my first impressions:

 

  1. Capital One seems more user friendly (easier) to apply and increase your secured credit limit. Once you are approved and create your online account you can schedule a deposit online to increase your credit limit.
  2. FNB of Omaha does a manual review of your application. For me I had to send in copies of my drivers license and a utility bill showing my current address along with phone number.(which is fine). The online account access does not let you increase your credit limit by scheduling a deposit. You will need to call and ask. They state that you can request an increase in $100 dollar amounts for my card. I think I read somewhere you may need to wait for 6 months but I can't find that thread and forget where I read it so it may be a moot point.
  • Although FNB of Omaha does a manual review and I had to send in additional documents, my card came in like only 1.5 - 2 weeks after the Capital One card did. So they seem to take an on hand approach to manage their risk for secured cards. Can't blame them.

 

That said I am happy with both thus far. I plan to use my Capital One card as I would my debit card, reserving my FNB of Omaha card for small re-occurring auto payments and/or one time purchases.

 

Current FICO EQ: 676 | TU: 696
Starting FICO EQ: 637 on 5SEP13

Goal: 740
Message 8 of 10
enharu
Super Contributor

Re: Secured Credit Card, Future closure?


@Jungook wrote:

Hi again everyone,

 

I have a question regarding secured credit cards from the following banks

 

-Wells Fargo

-Bank of America

-First National Bank of Omaha

-Capital One

 

I began my search for the perfect secured card and I've stumbled upon these four. I was told by fellow forum members that the Bank of America secured Visa is the best secured card out there but I don't seem to know why. All of these cards seem pretty equal other than the annual fee. So is there any reason to pick and choose a certain card over the other, other than seeking the one with the highest acceptance rate?

 

Now the real question that I seek an answer to is how important is the process of getting a secured card into an unsecured card?

 

I know that unsecured cards allow me to retrieve my security deposit and increase my credit ceiling along with any card benefits featured. However, I don't really see the appeal of these cards as their rewards are severely lackluster (I'm talking about the unsecured cards that I eventually upgrade to) and I would much rather apply for other cards which I plan on doing after 1 years worth of credit reporting on my secured card.

 

So to sum these mumbo jumbo mess that is swirling in my brain, here are the questions. I don't know about Bank of Omaha so my responses will not include them.

 

1. Which of these four cards have the highest acceptance rate for students with no credit history? (I bank at a local community bank that offers secured cards through First National Bank if that would increase my chances in any way) Banks will accept you for a secured card as long as you did not previously burn them, and do not have any serious recent deliquencies on file. For unsecured, they're all about the same in most cases. Your odds are better if you have a banking relationship with that bank as well. Banks are more lenient on people with thin files, not bad ones, for student cards. 

 

2. Is it better to seek out the highest acceptance rate or take my chances on a card that has the potential to become an unsecured card with some decent rewards? Up to you. Depends on your priorities. If it were up to me personally, I would start with a card that can be unsecured ASAP, and then apply for other rewards card 6-12 months down the road.

 

3. How important is it that I keep my secured credit card account open as I am aware that credit age/history is a factor of my FICO score. Account continues to age even if its closed, unless secured cards report differently. The only reason to keep a secured card open and/or to raise credit limit after having that account for a period of time is solely for utilization purposes.

 

4. How much will it hurt my credit score if I choose to close my secured credit card rather than trying to convert it to an unsecured card and stick in somewhere safe?  It will just affect your utilization if you have debt on other card(s). Utilization is a factor of your score. How much it will affect will depend on your new utilization. And will I receive my security deposit back if I do close? Yes. Some banks do take a while to refund it though, so do read T&C.

 

 

5. Somewhere in my research I found a statement saying that even if I do close a credit card, the information will still be found on my credit history for up to 10 years. Surely after 10 years it doesn't matter if I closed my secured card as I would only be losing 1 years worth of credit reporting as to the future 9 years I plan to have in that same time frame.

 

Cheers and thank you if you can understand what I am trying to get across.


 

JPMorgan Palladium (100k), AmEx Platinum (NPSL), AmEx SPG (46k), AmEx BCP (42k), Chase Sapphire Preferred (47k), Citi Prestige (31k), Citi Thank You Preferred (27k), Citi Executive AAdvantage (25k), JPMorgan Ritz-Carlton (21k), Merrill+ (15k), US Bank Cash+ (22.5k), Wells Fargo (12k), Bloomingdale’s (12.4k), Chase Freedom (5k), Discover IT (5k).
Message 9 of 10
Revelate
Moderator Emeritus

Re: Secured Credit Card, Future closure?

@enharu: there's no difference in the FICO algorithm between a secured or unsecured revolving tradeline.  They may report as "secured" in some instances but this has no affect on the scoring.  In this case closing one is the same as closing an unsecured account.




        
Message 10 of 10
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