@jchu2013 wrote:
According to my research, I guess you need to get secured card to start with because at this point, if you are lucky, probably only Cap 1 will issue you unsecured credit card with 300 cl, with annual fee and high APR.
I've been thinking about getting the Capital One Secured Credit Card, and depositing the smallest amount allowed, like $49, and setting it up so that $1 a month is donated to a charity, with $1 automatically transferred from my bank account to CapitalOne each month. That way I can play the "oh yes, I can pay on time every month game" without actually having to do much of anything as I plan to always have at least $1 in my bank account. Although reading about you putting as much as $4,000 down as a deposit on one of your cards has got be me rethinking whether or not that is a good idea.
The rationale behind my idea is that debt-to-credit ratio part of credit scores just looks at percentages as opposed to dollar amounts. So why tie up more money than necessary in a deposit, to which the answer would seem to be to qualify for higher limits later on, but what I'm wondering is whether or not there is really any way to predict how much a deposit into a secured card now will benefit you later on as to know if it's worthwhile? That is whether or not there is any sort of guideline that creditors follow in terms of incrementally increasing credit limits as to give the consumer any idea of what's possible or realistic within the foreseeable future (like credit limit = 2x deposit in one year with no lates, or overlimits).
@jchu2013 wrote:
Regarding secured credit card, I got approved from BOA and US bank last week. I put 4k as deposit to each card so that I have 8k in credit. It will help in debt ratio (I will PIF anyway) and hopefully show future lender that I have decent limit card, which will make them approve me with higher limit. Plus, BOA secured card can be PC to its reward card AKA 3-2-1 rewards.
I'm surprised anyone would be interested in a BOA card. Even if I could qualify for their reward card, I don't think I'd want to touch it as it would seem the fees would quickly offset any rewards earned through it. Then maybe again, that depends on how much you spend with it. If you've got thousands to put into a card, then maybe you have the kind of income to make it work, but I'm thinking if you're a paycheck to paycheck kind of person, the card will cost more in fees than it will ever accrue in rewards, making it a losing proposition for the consumer. If anything I'd think a card like The Chase Freedom Card that features a 5% cash back would be a better bet for anyone that is able to qualify for one.
Too bad Chase doesn't offer a secured credit card as to be able to later graduate up into one of their rewards cards. I tried googling it, and learned that Chase discontinued their secured credit card offerings years ago without any plans to bring them back.
@jchu2013 wrote:
I did everything now according to my research. I might get a secured personal loan from bank just to mix my credit. and, after 6 months, I will get a car loan and most probably some useful unsecured credit card and store card. It depends on how my score will look like after 6 months. In Jan/Feb 2014, my 2 secured cards should graduate, which I will ask for CLI on both cards and another round of applying for better credit card. After that, gardening one more year and my credit file should be flawless.
Those sound like some good ideas, or at least the credit diversification aspect of it, provided it doesn't lead to overextending one's self in the process. For someone on a tighter budget, I'm not sure as much credit diversification would be advisable when weighing the negatives vs. the positives. I guess it just depends on your income, and how you manage money. If you can afford an auto loan, and all those other things than maybe it's not such a bad idea, but if a person can't, it would seem their options for improving their score are a bit more limited.
