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Secured card help

Frequent Contributor

Secured card help

A relative of mine has terrible credit along with 10 collections on their reports. No way they will ever be able to pay them back. They have been on her reports for 4-5 years now. They are going to try and get a secured card through capital one. If they only get one for 300$ limit and have to pay for things that are over 300$ can they "force" payments from the bank to the secured card?
Message 1 of 15
14 REPLIES
Member

Re: Secured card help

I'm not entirely sure but I think if you link your checking to your secured card they cover each other if the funds aren't in the account...
Message 2 of 15
Established Contributor

Re: Secured card help


Lambo23 wrote:
A relative of mine has terrible credit along with 10 collections on their reports. No way they will ever be able to pay them back. They have been on her reports for 4-5 years now. They are going to try and get a secured card through capital one. If they only get one for 300$ limit and have to pay for things that are over 300$ can they "force" payments from the bank to the secured card?

If you go overlimit, there can be a fee and they can jack up your interest rate. Why would they ever need to go over $300?

Message 3 of 15
Frequent Contributor

Re: Secured card help


Lambo23 wrote:
A relative of mine has terrible credit along with 10 collections on their reports. No way they will ever be able to pay them back. They have been on her reports for 4-5 years now. They are going to try and get a secured card through capital one. If they only get one for 300$ limit and have to pay for things that are over 300$ can they "force" payments from the bank to the secured card?

If the purchase is for an amount above the line of credit, the charge will be declined.  In such case the amount of the purchase that exceeds the available credit, would have to be made up through another form of payment.

 

Also, since you are already talking about maxing-out the card, before you have even received it, you should remember that doing so will cause the credit score to drop even further than it already is.  

 

Your relative needs to re-evaluate the need to apply for any credit, secured or not - as the options are already severely limited - burning the last available bridge is something that has to be very carefully considered.

Message 4 of 15
Frequent Contributor

Re: Secured card help

Another option is to open a PayPal account and request the debit card.

That can be linked directly to a personal checking account to cover any amount that is not in the PP account.

Message 5 of 15
Established Contributor

Re: Secured card help


NonSufficientFunds wrote:

Another option is to open a PayPal account and request the debit card.

That can be linked directly to a personal checking account to cover any amount that is not in the PP account.


Does that report? What a cool idea.

Message 6 of 15
Frequent Contributor

Re: Secured card help


InvincibleSummer3 wrote:

NonSufficientFunds wrote:

Another option is to open a PayPal account and request the debit card.

That can be linked directly to a personal checking account to cover any amount that is not in the PP account.


Does that report? What a cool idea.


Sorry, No - PayPal is a debit account.  It can be used to obtain a fee-free debit card, but it is not a credit card, and does not report.

Message 7 of 15
Established Contributor

Re: Secured card help


NonSufficientFunds wrote:

InvincibleSummer3 wrote:

NonSufficientFunds wrote:

Another option is to open a PayPal account and request the debit card.

That can be linked directly to a personal checking account to cover any amount that is not in the PP account.


Does that report? What a cool idea.


Sorry, No - PayPal is a debit account.  It can be used to obtain a fee-free debit card, but it is not a credit card, and does not report.


Ah, I see. Thanks for clarifying.

Message 8 of 15
Frequent Contributor

Re: Secured card help

Obviously no one understood what I meant. This person has bills to pay. They would like to use the card to pay the bills to build their credit. For now say they have only 100$ for a deposit and that gives them a $300 limit.
If the limit is $300 and they push another 300$ to the card from the bank bill pay system, they now have a $300 credit along with a $300 limit. Would they be able to use it to make a purchase for say $500-600?
Similar to a normal credit card in which you need to spend more than your limit on a purchase. You can push money over from the bank and have a credit plus your credit line. Not sure if that would work for a secured card as well. That is my question..
Message 9 of 15
Established Contributor

Re: Secured card help


NonSufficientFunds wrote:


 

Also, since you are already talking about maxing-out the card, before you have even received it, you should remember that doing so will cause the credit score to drop even further than it already is.  

 

Your relative needs to re-evaluate the need to apply for any credit, secured or not - as the options are already severely limited - burning the last available bridge is something that has to be very carefully considered.


This. Times a million.

Message 10 of 15