Why pay for a secured credit card?

[jesseh]

Hi all,

It may seem like a stupid question, but it's something I have been wondering for a while. Why do people choose to apply for a secured credit card at a big bank (with an annual fee of e.g. $25 WF/$39 BOA) instead of a no-annual fee secured credit card at a credit union?

It this mainly to establish a longer history with that particular lender or am I overlooking other benefits of a big-lender card?

Have a good one!

[PlasticOrPlastic]

Could be to get a foot in the door (my case).  Could be their local credit unions wont work with them.  Maybe they already have a banking relationship with the particular bank and want to keep it going.  I have some decent cards, but last week I app'd for the BofA card, and accepted the secured 99/500 version.  I just want to start a relationship with BofA, they have been reported to graduate and PC in as little as 6 months making them very well worth it.  I have cards with Discover, Barclay, Citi, etc with limits nearing 10k on some of them, so the $500 limit on the BofA is nothing special but once it graduates the potential is unlimited. 

[Closingracer99]

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@jesseh wrote:

Hi all,

It may seem like a stupid question, but it's something I have been wondering for a while. Why do people choose to apply for a secured credit card at a big bank (with an annual fee of e.g. $25 WF/$39 BOA) instead of a no-annual fee secured credit card at a credit union?

It this mainly to establish a longer history with that particular lender or am I overlooking other benefits of a big-lender card?

Have a good one!

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Well I for one don't have any Credit unions that I can join so I would have to use a Big bank's Secured card 

[JenniferinFL]

Some people don't have a local credit union that offers a secured product or maybe there's only one in the area and they already burned that bridge. We only have two credit unions near us, one is stingy and wanted me to have a cosignor for a $500 credit card and the other one doesn't even want me as a member because of my bankruptcy in 2009.

Fortunately Capital One approved me for a regular card, so I never had to have a secured card, but if I would have needed one it would have to come from a big bank.

[MT936]

people who have low scores and are trying to build or rebuild their credit and also not everyone has access to or can join a credit union

[jesseh]

Thanks for the replies, I didn't think of how picky credit unions can be. Some are very welcoming to everybody, whilst some aren't. The burned bridges also makes sense.

[ChargeItPlease]

In our case, spouse and I went with Capital One because we only had to put a $99 deposit down for a $200 card ($50, $99, or $200, depending on credit history), whereas the minimum for the CU cards we looked at was $500. So, available deposit money is one reason.

[newhis]

With BoA you can get the Cash Rewards card, and if you get a savings or checking account with them you get 10% extra cash back. So you get 3.3% gas, 2.2% groceries and 1.1% everything else. In most cases that will offset the AF (for me in less than 3 months). I can't find a CU that offer rewards. No AF is great, but if you can use the card and get more than the AF, I think is better. Also the card should graduate, some secured cards never graduate so you need to cancel them to get your money back.

I hope when my card graduate they can remove the AF. Rewards without AF is best.

[maiden_girl]

Some people look at the possibility of having their card "graduate" or become unsecured after a set period of time. Something like that is more likely to happen at a larger institution than with a credit union.