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Posts: 9
Registered: ‎05-01-2009
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Secured Credit Cards

Hello everyone. I would like to get my credit score up and was thinking about trying to get a new Credit Card. I have 3 old deliquent accounts on my CR with DOFD of 6/2006 and 7/2006. I looked around online about the diffrent CC's they have and I finally went to my Credit Union and they said if i was denied the CC i would prob be able to get the secured card at 16% APR. My question is what is the the benefit of getting the card and what are the set backs of having the card.


Thank you in advance.

Moderator Emerita
Posts: 28,095
Registered: ‎04-01-2007
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Re: Secured Credit Cards

[ Edited ]
Well, if you have no current (open) revolving credit, that hurts your FICO scores. Since revolving credit can be tricky to manage, having a good track record in this area is a good predictor of future credit success. So not only will it help you with future credit approvals, it will also help your FICO scores to have a revolving account reporting, as long as you keep it squeaky clean.

I wouldn't worry about the card being secured rather than unsecured. Future lenders will realize that you have had to rebuild your credit. You have to start somewhere. A secured card just protects the lender against default.

If they won't give an unsecured card, I would happily accept a secured card. Put down as much as you can ($1000 limits are so much easier to manage than lower limits, but $500 will work, too), and treat the account with kid gloves. Always have enough in a separate savings accounts (not the account that secures your card) to pay off your CC balance at a moment's notice. Don't use this card to buy something that you really can't afford: you're using this card to rebuild your credit, not to upscale your life. Smiley Wink Use it for the necessities of life like gas and groceries, and pay in full every single month, way before the due date. (Don't forget that bit about having enough extra in separate savings to pay off your CC balance.)

I'm glad you're with a CU. They're usually great about working with their members to help them start a new credit life or to shine up a somewhat tarnished previous credit life. Good luck!

edited to clarify
Message Edited by haulingthescoreup on 01-08-2010 05:24 PM
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