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Valued Contributor
Dustink
Posts: 3,097
Registered: ‎10-02-2012
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Re: Skipping sub-prime cards...It can be done

[ Edited ]

Just be careful applying for too many cards at once. With no credit history or bad credit history it can be even more of a problem. Lenders will just see a bunch of recent inquires and will be even more likely to decline you. So, the key is to focus on one card and do everything you can to get it. Usually the best starter cards are college cards or young adult cards. Most likely, whomever you bank with has a college card or young adult card. Ask a supervisor at a branch to give underwriting a call and explain your situation. They may tell you whether it is even worth applying.

 

Capital One is real strict on their credit limit increases for people with new credit. Only expect to get about $500 per 6 months from them. On some of their higher end cards, they are a bit less stringent.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
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HiLine
Posts: 3,176
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Re: Skipping sub-prime cards...It can be done


Dustink wrote:

 

After having the card for 6 months, I called up the bank and asked for an increase. I told them I needed the limit to cover atleast my average monthly spend. They increased the limit by over 8 times the original limit. 


Yikes! 8 times!?

Valued Contributor
Dustink
Posts: 3,097
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Re: Skipping sub-prime cards...It can be done


HiLine wrote:

Dustink wrote:

 

After having the card for 6 months, I called up the bank and asked for an increase. I told them I needed the limit to cover atleast my average monthly spend. They increased the limit by over 8 times the original limit. 


Yikes! 8 times!?


Yup, that was the first card I had. I used it to get my credit score. It started at a limit of $300. I had to pay it off every few days. At my 6 month point (2/12) I had a viable credit score and was able to start applying for other cards. That is also when US Bank gave me that nice CLI. Although, it was a hard pull.

Too many INQs & low AAoA so I'm off to tend the Garden.     Age:23    


     $17k       $8.5K          Closed          $19k      $6.5k        $24.2k        Closed         $5k       Closed     $8.5k        Closed      @2.49%
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MovingForward_2012
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Registered: ‎12-19-2012
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Re: Skipping sub-prime cards...It can be done

Yeah I agree. Putting your own money on a card is subprime even if it is with a prime lender. Capital One has a subprime and prime business. The Green Cash Rewards and Venture cards are for excellent to good credit. Cap1 is very stingy with increases and touts as a conservative lender, which is why I know I won't get more than $3600 in credit from them between two cards come March.

The next step above secured is unsecured, even if it is subprime. I skipped the secured cards and went straight for an unsecured with Orchard Bank. I wasn't immediately approved, they had to think on it. I started with $300 CL and now it is at $1100 3 years later but now Cap1 bought them out and they aren't taking apps anymore which sucks. The terms on the Orchard Card weren't as hideous as First Premier and I considered it a good rebuilding card. Hopefully Cap1 will start something similar next year.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
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cashnocredit
Posts: 1,037
Registered: ‎07-18-2009
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Re: Skipping sub-prime cards...It can be done

My credit file only has so called "prime" bank cards with Amex, a siggy, and a world elite MC. Less than 4 years ago I had zero CCs. How I got there was with secured cards that unsecured while I still had a tax lien and CAs. It would not have been possible without initially getting secured cards. I consider the Citi secured card as very prime because it came with a 25k LOC secured with a 4.07% APR CD.  It paid me $1,500 during those 18 months which was a rate quite a bit more than I got from any other savings deposit,

 

Since I had cash, but zero credit, it was the obvious path of choice. Now I have both with no history of secured cards or sub-prime/low limit CLs.

 

There are multiple paths to good credit and secured cards can be one of them. Especially if you are starting off with baddies and: cash-no-credit.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k
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HiLine
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Re: Skipping sub-prime cards...It can be done


cashnocredit wrote:

My credit file only has so called "prime" bank cards with Amex, a siggy, and a world elite MC. Less than 4 years ago I had zero CCs. How I got there was with secured cards that unsecured while I still had a tax lien and CAs. It would not have been possible without initially getting secured cards. I consider the Citi secured card as very prime because it came with a 25k LOC secured with a 4.07% APR CD.  It paid me $1,500 during those 18 months which was a rate quite a bit more than I got from any other savings deposit,

 

Since I had cash, but zero credit, it was the obvious path of choice. Now I have both with no history of secured cards or sub-prime/low limit CLs.

 

There are multiple paths to good credit and secured cards can be one of them. Especially if you are starting off with baddies and: cash-no-credit.


I would put all my money in CD's that earn 4.07 APR, not just for credit card deposits. :catsurprised::mansurprised::robotsurprised::smileysurprised::womansurprised:

MovingForward_2012 wrote:
Yeah I agree. Putting your own money on a card is subprime even if it is with a prime lender. Capital One has a subprime and prime business. The Green Cash Rewards and Venture cards are for excellent to good credit. Cap1 is very stingy with increases and touts as a conservative lender, which is why I know I won't get more than $3600 in credit from them between two cards come March.

The next step above secured is unsecured, even if it is subprime. I skipped the secured cards and went straight for an unsecured with Orchard Bank. I wasn't immediately approved, they had to think on it. I started with $300 CL and now it is at $1100 3 years later but now Cap1 bought them out and they aren't taking apps anymore which sucks. The terms on the Orchard Card weren't as hideous as First Premier and I considered it a good rebuilding card. Hopefully Cap1 will start something similar next year.

 If you had started out with a secured card you would have ended up with a higher limit today ...

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Revelate
Posts: 9,765
Registered: ‎12-30-2011
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Re: Skipping sub-prime cards...It can be done

[ Edited ]

HiLine wrote:

 If you had started out with a secured card you would have ended up with a higher limit today ...


Possibly, like life there's no guaruntees on that depending what else is in the file.  

 

I personally feel if you have cash that you can afford to tie up for a year or two that secured cards are a no-brainer and can short-cut some of the growing pains that come with building or rebuilding out of a thin-file or otherwise subprime strata; however, that's not a guaruntee and if you have limited cash resources, then the subprime unsecured cards if they can be obtained are sometimes the only option.  I do rather wish I'd kept my 5K secured rather than graduating at 2.5K but I had no reason to think I'd have multiple paying gigs by the end of the year or reasonably substantial cash reserves again.  Doubt the 5K is going to make or break next year's mortgage but c'est la vie.

 

I'd also love a 4.07% APR CD these days too :smileyhappy:.

 

Edit: worse mistakes than usual that I didn't catch the first time.

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


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Established Contributor
cashnocredit
Posts: 1,037
Registered: ‎07-18-2009
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Re: Skipping sub-prime cards...It can be done


Revelate wrote:

HiLine wrote:

 If you had started out with a secured card you would have ended up with a higher limit today ...


Possibly, like life there's no guaruntees on that depending what else is in in the file.  

 

I personally feel if you have cash that you can afford to tie up for a year or two that secured cards are a non-brainer and can short-cut some of the growing pains that come with building or rebuilding out of a thin-file or otherwise subprime strata; however, that's not a guaruntee and if you have limited cash resources, then the subprime unsecured cards if they can be obtained are sometimes the only option.  I do rather wish I'd kept my 5K secured rather than graduating at 2.5K but I had no reason to think I'd have multiple paying gigs by the end of the year or reasonably substantial cash reserves again.  Doubt the 5K is going to make or break next year's mortgage but c'est la vie.

 

I'd also love a 4.07% APR CD these days too :smileyhappy:.

 



Sadly, both the Citi secured CC, 4.07% and 25k CD were dropped back in 2010. They had been initially put in place back around 2008 and Citi kept the high APR for some time after their regular CD rates dropped much lower.  There were banking web sites that were touting the high paying CD. The CC it came with was considered a mostly unwanted side effect.

 

Worked for me since I'd concluded that I needed a CC as debit cards were increasingly difficult for car rentals/hotels.

 

It really does show that there is no one right best path. It depends on one's needs, finances and credit history

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k
Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012
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Re: Skipping sub-prime cards...It can be done

When I look back, I remember finances were very tight. I was floating checks. They never bounced but it was bad. When I got my Orchard card, I didn't have to float checks any longer.

Now my finances are very good with ample cash flow and savings. If I am approved for Chase Freedom, it is my ticket to a higher limit in the future. I applied yesterday and was declined but before I applied, I was working with a great rep that patched me to the application line and once he saw the app go through, he immediately called me back on my cell phone as promised and said that he is putting in a recommendation for approval for the card but that another department has to do the final review. I should know by tomorrow. I hope I get it as unlike Cap1, Chase provides more generous increases and I will know I will have the opportunity to upgrade to the Sapphire down the road. Getting the Freedom is my ticket out of this low limit mess. A $2500 Cash rewards card from Cap1 is OKAY but it doesn't allow me to be able to take a worry free vacation (I have never had a vacation that wasn't stressful due to using pure cash for everything), drove me NUTS! Especially, the rental car fiasco! Now I just won't go anywhere until I can feel financially comfortable.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
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cashnocredit
Posts: 1,037
Registered: ‎07-18-2009
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Re: Skipping sub-prime cards...It can be done

Yeah. Back when I got my first job (1971) after college I had to watch finances pretty closely. Everything was checks or cash back then. No ATM cards let alone debit cards. Rented a room in a house I shared with 5 other peeps. Owed money to the college as well as "national defense" student loans. Gradually built up a little buffer and was able to move into a small efficiency appt.. About 2 years later I got my first CC, a BankAmericard. The main use of the CC back then was to widen the merchants that would take checks. CCs were used as a sort of ID along with DLs and not all that many places took CCs. By the late 70's that had completely changed in favor of CCs.

 

Stupidly, I eventually stopped using CCs in favor if a debit card (hated taking the time to write monthly checks). As that became increasingly problematic for car rentals  I had to rebuild credit. Since I had long paid off mortgages and dropped CCs I had no credit history and some baddies from sloppiness. Had to rebuild. But I was lucky in my investments over the years so I was able to open the max secured cards.

I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy15k, Amex Plat (60k H/B), Citi AA EWMC 25k

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