topic Re: Discover IT Secured vs. Capital One Secured in Credit Card Applications

Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 07:41:52 GMT

Okay, so I'm just starting my rebuild. I have a HUGE tax lien on my CRs that is NEVER going to come off (like EVER) because of my ex and there's no possible way in Hades I could ever pay it. I can't even afford a tax pro to help me with it because they all want thousands of dollars to help me with a debt like this. I've been terrified to talk to the IRS about it because I'm afraid they're going to force me into monthly payments and we're already struggling to stay afloat some months as it is. (My husband works TONS of hours some weeks and very few other weeks, and my income has dropped recently.)

I have the BoA 99/500 offer that I recently accepted after getting a pre-approval letter in the mail. Already made a payment of $150 yesterday and my first bill hasn't come in yet. I just used the card to pay a high utility bill and didn't want a huge utilization to show up.

I signed up for a Discover IT Secured card and already paid the $200 minimum deposit, just waiting for the card to come.

I have Fingerhut's FreshStart program with a $180 limit. Ordered two items. One shipped already and I paid it off completely, Just waiting for the other to ship so I can pay it off and see if they increase my limit.

I also got approved for a Capital One Secured card, but I was wondering which would be better for my credit -- opening the new CO secured card with a $200 deposit OR putting that $200 into raising my Discover IT limit? Which one would benefit my credit more?

My short term goal is to get enough credit somewhere to finance a new laptop and camera for my business. Long term goal is to buy a home with my husband. He's rebuilding too, but his scores are slightly higher than mine and he has no tax lien.

Just trying to decide which direction to go in. I need a laptop ASAP, as I work from home and my 2011 Macbook has been getting slower and slower. I plan to pay the laptop off within maybe 3 months, but I just don't have the scores to apply anywhere that won't gouge the crap out of me in finance charges and I can't get the SCT to work for me ANYWHERE, so I'm trying to raise my scores as quickly as I can before this Macbook dies.

So, put $200 into raising Discover IT or into opening Capital One?

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 11:35:36 GMT

I would say Discover. I went with them and love it. Secured after a year and a CLI.

I read that not much happens with the secured capital one card.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 12:21:54 GMT

@Anonymous wrote:
I would say Discover. I went with them and love it. Secured after a year and a CLI.

I read that not much happens with the secured capital one card.

It doesn't. There's an ongoing discussion about the Capital One secured card on Credit Cards, and the point has been made that Cap One very apparently sees the secured card as being strictly a rebuilding tool, and doesn't intend for it to be relied on for a lengthy period of time. They want you to apply for one of their better credit cards, e.g., Quicksilver, once you've used the secured card responsibly for a long enough period of time to build your scores and history up to the appropriate point.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 12:25:57 GMT

Adding 200 to a new card won't help anymore than adding 200 to the Discover you have. You may get a temporary ding for opening a new account.
I agree with breezy, just add to Discover and grow it. With BoA and Fingerhut you have the three accounts needed to help your scores.
IF you are still wanting something else sooner, I would look at a local credit union for help. Other than that, I'd keep growing what you have.
Good luck

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 13:26:27 GMT

OP, have you tried disputing the tax lien. I've read on other forums where they are being disputed and removed.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 14:38:02 GMT

The ONLY benefit to adding $200 to a Disco would be a slightly larger base when/if the Disco secured card graduates.

I'm one of those that believes adding money to a secured card, to artificially inflate its limit, is kind of pointless and there's likely a better use for that extra $200.

As a rebuilder you're looking for three cards ... you have BoA, Discover and a Fingerhut. You really have no NEED for a Cap 1 secured. Not to mention, you say your husband's income fluctuates and your own income has decreased ... adding credit right now is, again, in my opinion, a bad idea. What you need, right now, is time ... time to make your payments on time and show responsible credit use which will, in time, allow you to get better limits.

I'd make do as best you can with your Macbook (sounds like your a photographer?) and do the best you can until your credit is improved.

But that tax lien is going to suppress your scores for as long as it remains on your reports. You won't be able to ignore that forever.

Good luck!

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 14:22:05 GMT

Okay, I think I'll stick with the Discover IT card. It should come soon, hopefully. I don't plan to use it for anything except small purchases. I want to keep depositing money into it for three reasons.

I want a higher CL reporting, and that's an easy way to do it.
I want to get a high enouch CL to be able to finance my new laptop without going over 30% utilization. That means I need at least $1,500 on there to get a $500 laptop.
It's kind of a savings plan. While doing all this, I'm saving money that I'll get back later, which will help with moving expenses when I eventually get the deposit back.

Maybe later I'll open the CO card if I max out the CL on the Discover, but probably not. By then I can probably just qualify for the unsecured version at CO.

Thanks for all the advice, everyone!

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 14:45:33 GMT

@Anonymous wrote:
OP, have you tried disputing the tax lien. I've read on other forums where they are being disputed and removed.

Wow, really? I had read those were nearly impossible to get rid of. I may have to look into that, because my scores would actually be fairly decent if not for that, I believe.

Re: Discover IT Secured vs. Capital One Secured

HeavenOhio — Fri, 26 May 2017 17:30:36 GMT

If you're aiming to keep your utilization in check, aim for 28.9% or below rather than 30%. 29% is a scoring threshold. And since all percentages round up (29.0000001% turns into 30%), the safe thing to do is aim for numbers ending in x8.9%.

8.9% or below is optimum for scoring, but that's not always convenient. 28.9% is considered by lenders to be responsible borrowing.

My guess is that you're very close to qualifying for an unsecured Capital One Platinum. Give your new cards a few months of good history, and you should be a lock for it.

Re: Discover IT Secured vs. Capital One Secured

VipreArmed — Fri, 26 May 2017 15:07:47 GMT

The one benefit of Capital One Secured is you have 3 months to continue to add to your card to establish your limit. So if you don't want just a 200 dollar limit, you could continually add for 3 months to get a bigger starting SL. Not sure if you can do the same with Discover but I don't believe you can.

That said, I agree with JoeT. Cap1 eventually wants you to rebuild well enough to try for another one of their cards. By the time their secured graduates, the hope is you would've built your credit profile up to apply for another one of their products anyway.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 22:38:24 GMT

Why don't you contact the IRS and do an offer in compromise. If the tax bill is as large as you say, and you are having trouble even buying a $500 laptop, they will accept an offer for pennies on the dollar.

I owed $40k few years ago and did an offer in compromise myself. Offered $500 and they accepted it. But at the time I was actually in financial trouble. They will probe in your bank statements, income, spending etc to determine how much they will accept. And they will pretty much accept whatever it is you can afford. They also took two years of my tax returns which wasn't much.

Don't wait till you're in better financial shape. They'll come after you and garnish your wages and freeze your bank acccounts.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 22:48:35 GMT

@Anonymous wrote:
Why don't you contact the IRS and do an offer in compromise. If the tax bill is as large as you say, and you are having trouble even buying a $500 laptop, they will accept an offer for pennies on the dollar.

I owed $40k few years ago and did an offer in compromise myself. Offered $500 and they accepted it. But at the time I was actually in financial trouble. They will probe in your bank statements, income, spending etc to determine how much they will accept. And they will pretty much accept whatever it is you can afford. They also took two years of my tax returns which wasn't much.

Don't wait till you're in better financial shape. They'll come after you and garnish your wages and freeze your bank acccounts.

I have been wanting to do that, but since $500 for a laptop would be a huge deal I couldn't really offer them anything. And I owe almost twice what yours was. Maybe I should try it and show them our income and bills and they will see we have very little lift each month. We even canceled cable, Netflix, Hulu, etc. to save money each month. We have seven kids living at home, too. I guess it could be worth a shot. In fact, about half that happened over 10 years ago and they can no longer legally collect it.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Fri, 26 May 2017 23:02:24 GMT

They will accept whatever you can afford. If it's $100 or $50. Since it has been 10 years don't know what the best thing would be to do. Good luck

Re: Discover IT Secured vs. Capital One Secured

stellar — Sat, 27 May 2017 14:22:23 GMT

If your laptop is running slow, you may just need to reformat it rather than buy a new one.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Mon, 29 May 2017 01:14:34 GMT

I would focus on the money you owe the IRS before anything else as that will never go away unless you take care of it. You will be adding interest and penalties. It isn't like a credit card charge off or foreclosure that has statue of limitations that you can just ignore and it will go away.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Tue, 30 May 2017 15:57:23 GMT

@Anonymous wrote:
I would focus on the money you owe the IRS before anything else as that will never go away unless you take care of it. You will be adding interest and penalties. It isn't like a credit card charge off or foreclosure that has statue of limitations that you can just ignore and it will go away.

Some of the debt is outside the 10-year collectible period because a big chunk of it was in 2002-2003. It won't come off my credit reports, but at least technically they can't collect it. Of course, that brings to mind the potential that I MIGHT dispute it since it's beyond the SOL. Doubt it would work, but who knows?

I really wish I could just afford to have a CPA help me figure it out, but I just can't bear that expense at the moment.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Wed, 31 May 2017 14:03:09 GMT

You're probably not gonna like what I have to say, but from the details I have gathered about your situation, and from someone who also has a MacBook from 2011 that I use both photoshop and Lightroom on frequently; I would think the best move would be to not drop more money that you don't actually have on a computer and camera, and instead work to clear up IRS situation, then wait until you can actually pay cash for a new computer $1k should be pretty easy to save, even if you aren't making much at all. In your current situation, let's say you buy a laptop and camera and create a business that is extremely successful quickly. Let's say you make $100k in first 12 months. The IRS will see this and take it all anyway, and you will have actually still made close to $0. They will also be mad that you didn't think to settle up with them first. You're better off paying them now, prolonging your time in the hole a bit then work your way out to safety. As it is now, even if you climb out you're gonna live with an extremely high risk that they just find out your out and throw you back in. Then you are back at square 1 with less time left.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Wed, 31 May 2017 14:06:53 GMT

@Anonymous wrote:
You're probably not gonna like what I have to say, but from the details I have gathered about your situation, and from someone who also has a MacBook from 2011 that I use both photoshop and Lightroom on frequently; I would think the best move would be to not drop more money that you don't actually have on a computer and camera, and instead work to clear up IRS situation, then wait until you can actually pay cash for a new computer $1k should be pretty easy to save, even if you aren't making much at all. In your current situation, let's say you buy a laptop and camera and create a business that is extremely successful quickly. Let's say you make $100k in first 12 months. The IRS will see this and take it all anyway, and you will have actually still made close to $0. They will also be mad that you didn't think to settle up with them first. You're better off paying them now, prolonging your time in the hole a bit then work your way out to safety. As it is now, even if you climb out you're gonna live with an extremely high risk that they just find out your out and throw you back in. Then you are back at square 1 with less time left.

My husband and I have been talking about it and we plan to save as much as we can over the next couple of months and then go to them and make an offer. They may reject it, but at least they will see we tried.

I do actually have a desktop as well, but I start classes at the end of August and I was hoping to get a laptop to use at school before then. I can make do with my Macbook if I have to, it's just so slow it's driving me crazy. The camera can wait, because I can use my phone camera for now. It will do.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Wed, 31 May 2017 14:19:57 GMT

An old Macbook (or WIndows laptops) can be refreshed nicely and sometimes very cheaply by maxing out the memory (older style memory chips can be had for pennies sometimes), reformating the drive entirely and starting over. I use a laptop from 2010 that is absolutely more than enough for even graphic design work. I maxed out the RAM for under $30 (Amazon) and reinstalled a fresh version of Windows and it flies. No need to update yet.

Re: Discover IT Secured vs. Capital One Secured

Anonymous — Wed, 31 May 2017 14:38:43 GMT

@Anonymous wrote:
An old Macbook (or WIndows laptops) can be refreshed nicely and sometimes very cheaply by maxing out the memory (older style memory chips can be had for pennies sometimes), reformating the drive entirely and starting over. I use a laptop from 2010 that is absolutely more than enough for even graphic design work. I maxed out the RAM for under $30 (Amazon) and reinstalled a fresh version of Windows and it flies. No need to update yet.

I upgraded this one from 4 Gb to 8 Gb of RAM a couple of years ago, but I haven't tried a fresh install. I don't have Time Machine or any way to back up my HD, which is why I haven't been able to format it. Maybe I'll buy an external HD and try backing it up after we get the IRS situation resolved.