topic Re: Declined secured credit card in Credit Card Applications

Declined secured credit card

Anonymous — Wed, 16 Aug 2017 20:18:36 GMT

I don't quite understand it, however, I was declined for a secured credit card through my credit union Indiana University credit union. When I reached out to them they advised that I have too few trade lines reporting? I have two auto loans, and three credit cards. How many trade lines do they want to see? A secured credit card has no risk. It is secured by the funds I provide. So why offer this type of account if you are going to decline applications? Makes zero sense!!

Re: Declined secured credit card

Anonymous — Wed, 16 Aug 2017 20:29:26 GMT

Some banks and credit unions are extremely, extremely conservative.

A few years ago, I had a checking and savings balance of SIX FIGURES with a credit union and they declined me for a $500 secured card. They also hit me with 4 inquiries. I closed my accounts after a week of arguing with one of the branch managers who told me "you are a credit risk" even though I had all that money sitting in their accounts for literally 18 months.

Conservative banks and credit unions will love you when your credit is spotless, but they will probably hate you for anything but near perfect credit.

Re: Declined secured credit card

Anonymous — Thu, 17 Aug 2017 06:01:18 GMT

There are some reall tight ones around. The bank next to our office requires tripple pull fico scores all abover 750, no chex systems, no returned checks ever for remote deposit. I can't imagine what their loan requirements must be. DW and I keep a small account there since its next door just for check cashing. They will cash a check upto $1000 with out a hold. We use a bank about 100 miles away that has a strong onlne system.

Re: Declined secured credit card

Meanmchine — Fri, 18 Aug 2017 05:00:41 GMT

+1 ABCD

A few years ago I had my BoA branch manager submit an app for me for their secured cc. I was denied and on recon I offered to fund a secured savings account $5000 for a $500 credit line. The answer was no

Re: Declined secured credit card

Anonymous — Fri, 18 Aug 2017 07:28:24 GMT

1) I agree that some institutions are just shouldn't even offer secured CCs or the very least, be pretty clear with their criteria, because some places are a bit loose and the public, confuses themselves into thinking every "chick" is easy😉

2) No offense but too many ppl THINK they KNOW more than they do and SHOUT from a place of ignorance vs just asking WHY?

There are inherent COST and HASSLE in housing and maintaining lines of credit....and ABSOLUTELY there are RISK... it's amazing that folks constantly TELL businesses what their risk & cost....

Quite frankly, secured accounts are a FAVOR to consumers (a wonderful gift of the tool, we can use to build a profile, where otherwise many would be lock out, with a much tougher road to hoe back in, truth be told) on the up side generally there's not that much profit to be made on clients that use them properly just as a way back up the ladder

But on the other end (and in the middle) there's nothing but headache and cost that honestly many banks/CUs can do w/o ( which again is why some make them a bit tougher to get, as NOT to deal with the B.S.)

From many a bank POV this B.S. account is just a nagging time consuming low profit charity type thing offered to 'help' mostly ppl who've already proven to be profit suckers....they don't want to be in the cash repo business ( is there enough money in that account for the lost % the late fees and associated cost)

My point is...let's be fair generally speaking, the WORST of the worst payers are whom deals with this product, the BK'd, won't, can't, play at paying types flood this audience...that's who you're dealing with BOT a fair mix of the Gen Pop, so yeah some institutions again ABSOLUTELY want to LIMIT the amount of possible nonsense created overall by those in this Sub-Agent

May not be politically correct to say it, that way out loud but truth be told it's the type of business plenty of places ✋ to God would just say NO to

So they do so by having high standards...
Let's be real Stanford and Yale don't want to deal with special needs students, so they make it TOUGH to get in...yeah they'll take an app and turn down 95-96% of them, knowing darn well they don't even have space for THAT many....

Talking about making SENSE they could easily screen ppl upfront and tell them not to WASTE their 💰 and still choose a great group of kids for the space they know they have....but they don't ( could have a little to do with a few million in app fees and the hype sold on turning down, so many apps)

Point being if it don't make money it don't make sense and if it could cost more money than it's worth= RISK again and unneeded freaking hassle.....

If it weren't true you'd see/hear ads galore about opening secured accounts ...you do NOT

Banks will hound you to open a gazillion checking accounts but you DO NOT see a wholesale push to market, market, market secured CCs for a REASON!

Re: Declined secured credit card

Anonymous — Fri, 18 Aug 2017 14:05:03 GMT

@Anonymous wrote:

There are inherent COST and HASSLE in housing and maintaining lines of credit....and ABSOLUTELY there are RISK... it's amazing that folks constantly TELL businesses what their risk & cost....

Quite frankly, secured accounts are a FAVOR to consumers (a wonderful gift of the tool, we can use to build a profile, where otherwise many would be lock out, with a much tougher road to hoe back in, truth be told) on the up side generally there's not that much profit to be made on clients that use them properly just as a way back up the ladder

They have some record keeping expense, sure. But if you miss one payment they either 1) suck up $30 or so, or 2) suck up your ENTIRE deposit. And rebuilders are going to do that disproportionately to the rest of the customer base. You won't see them on the forums here, but I know of people who missed a $20 payment and got their $500+ deposit sucked up for good. Not to mention that the bank is making interest off your deposit (I've only seen a handful of CU's which pay you the interest), and quite possibly to the secured card customer' if they carry a balance athey're re paying 24% or so on their own money. They still make money off swipe fees too. So yes, if you assume every customer is well-informed, the banks are doing us a favor. Alas, they still make out better in the end, on average.

Re: Declined secured credit card

Anonymous — Fri, 18 Aug 2017 14:17:53 GMT

I see the point to some extent. I just prefer to have a secured credit card to ensure worst case scenario that I never get over my head. I dont have any credit issues...No BK's, lates, excessive utilization, etc. I have one through USAA with a $5000.00 limit, State Dept. FCU with a $2000 limit, and Citibank with a $2500.00 credit limit. USAA and State Dept. FCU are both over 5 years old, and Citi is a little over a year old. I don't carry a balance on any of the three cards, and I PIF each month. So they would not be making as much money from me for the product. I think I was just more ticked that I wasted a hard pull on a crazy decline reason.

Re: Declined secured credit card

joltdude — Sat, 19 Aug 2017 17:20:00 GMT

@Anonymous wrote:
I see the point to some extent. I just prefer to have a secured credit card to ensure worst case scenario that I never get over my head. I dont have any credit issues...No BK's, lates, excessive utilization, etc. I have one through USAA with a $5000.00 limit, State Dept. FCU with a $2000 limit, and Citibank with a $2500.00 credit limit. USAA and State Dept. FCU are both over 5 years old, and Citi is a little over a year old. I don't carry a balance on any of the three cards, and I PIF each month. So they would not be making as much money from me for the product. I think I was just more ticked that I wasted a hard pull on a crazy decline reason.

What are your FICO scores btw?

Find it intriguing that CITI has never offered to unsecure your card....

Id like to know a little more about your profile...

Are all your balances 0 after statement date or before? ... im wondering if your being hit because you have no utilization ..

Heres what the conservative CU might be seeing.. You have no experience with unsecured credit.... even if your score is X... noone wants to offer you an unsecured account... we arent going to be first... and we think somethings funny with your credit profile so we dont even want the marginal liability of a secured card.

Basically i think your being pigeonholed for having only secured credit....

-J

im really thinking the CU isnt seeing usage or seeing any unsecured cards and they are like.. **bleep** is wrong with this person... that they cant get unsecured cards..

-J

Re: Declined secured credit card

Anonymous — Sat, 19 Aug 2017 21:39:31 GMT

1) Grasshopper bottom line there is a reason, these cards are not pushed like other products (💰)
Secondly as for missed $30 payments costing ppl their entire $500+ deposits... I'm sorry that sounds like hogwash....I'd love to have that claim substantiated.

2) I like @Joltdude find it intriguing how 2 different institutions have not sent back security deposits after half a DECADE of responsible use, neither USAA nor State hasn't unsecured with 5k and 2k well managed TLs in addition to $2500 at Citi over a year????

Perhaps there are some identity issues or something that presents as a RED flag towards offering unsecured TLs to the OP
Generally, companies wouldn't even ask, they just inform folks...hey Congrats you've been unsecured your checks in the mail but over 5 years worth of ARs with the usage and behavior as described, doesn't add up

*I will say with several thousand dollars tied up in secured accounts and wanting to secure more I can see a question regarding money laundering etc being a concern

As for the most recent denial, one has to wonder WHY a secured? why with a decent enough credit score and based upon that profile a decent enough score exist to app unsecured again why, what's the catch...is it I.D. theft...is it laundering....

Odd things = Potential Risk

Conservative CUs, like non profit University based ones in Indiana, ain't taking no chances, if it's odd it's a NO....that sounds about right

Re: Declined secured credit card

Anonymous — Sun, 20 Aug 2017 04:39:46 GMT

@Anonymous wrote:
@Anonymous wrote:

There are inherent COST and HASSLE in housing and maintaining lines of credit....and ABSOLUTELY there are RISK... it's amazing that folks constantly TELL businesses what their risk & cost....

Quite frankly, secured accounts are a FAVOR to consumers (a wonderful gift of the tool, we can use to build a profile, where otherwise many would be lock out, with a much tougher road to hoe back in, truth be told) on the up side generally there's not that much profit to be made on clients that use them properly just as a way back up the ladder

They have some record keeping expense, sure. But if you miss one payment they either 1) suck up $30 or so, or 2) suck up your ENTIRE deposit. And rebuilders are going to do that disproportionately to the rest of the customer base. You won't see them on the forums here, but I know of people who missed a $20 payment and got their $500+ deposit sucked up for good. Not to mention that the bank is making interest off your deposit (I've only seen a handful of CU's which pay you the interest), and quite possibly to the secured card customer' if they carry a balance athey're re paying 24% or so on their own money. They still make money off swipe fees too. So yes, if you assume every customer is well-informed, the banks are doing us a favor. Alas, they still make out better in the end, on average.

Most charge a annual fee$$$ as well...

Re: Declined secured credit card

Anonymous — Sun, 20 Aug 2017 05:49:53 GMT

Sorry you got denied. I am no expert on this subject, but I think your denial has little to do with whether or not you would be a profitable customer and more to do with money laundering protections. If you have 3 credit cards already (especially if unsecured) they might be suspicious as to why you would need/want a secured card. Secured cards are a very popular means of money laundering, so solid banks tend to be very cautious about issuing them.

Re: Declined secured credit card

joltdude — Sun, 20 Aug 2017 15:51:31 GMT

@Anonymous wrote:
1) Grasshopper bottom line there is a reason, these cards are not pushed like other products (💰)
Secondly as for missed $30 payments costing ppl their entire $500+ deposits... I'm sorry that sounds like hogwash....I'd love to have that claim substantiated.

@2) I like @joltdude find it intriguing how 2 different institutions have not sent back security deposits after half a DECADE of responsible use, neither USAA nor State hasn't unsecured with 5k and 2k well managed TLs in addition to $2500 at Citi over a year????

Perhaps there are some identity issues or something that presents as a RED flag towards offering unsecured TLs to the OP
Generally, companies wouldn't even ask, they just inform folks...hey Congrats you've been unsecured your checks in the mail but over 5 years worth of ARs with the usage and behavior as described, doesn't add up

*I will say with several thousand dollars tied up in secured accounts and wanting to secure more I can see a question regarding money laundering etc being a concern

As for the most recent denial, one has to wonder WHY a secured? why with a decent enough credit score and based upon that profile a decent enough score exist to app unsecured again why, what's the catch...is it I.D. theft...is it laundering....

Odd things = Potential Risk

Conservative CUs, like non profit University based ones in Indiana, ain't taking no chances, if it's odd it's a NO....that sounds about right

I will say this in the OPs defence.. SDFCU secured cards DO NOT UNSECURE... but surprised they haven't suggested the op app for a unsecured card after all this time...

Id really suggest the op pull his full reports and see if theres some issues with addresses, possible ID theft .... and some real scores....

Something just seems off...and you may be able to 1. find it.. and 2. address it...

Re: Declined secured credit card

sjt — Sun, 20 Aug 2017 17:20:22 GMT

@Anonymous wrote:
I don't quite understand it, however, I was declined for a secured credit card through my credit union Indiana University credit union. When I reached out to them they advised that I have too few trade lines reporting? I have two auto loans, and three credit cards. How many trade lines do they want to see? A secured credit card has no risk. It is secured by the funds I provide. So why offer this type of account if you are going to decline applications? Makes zero sense!!

You might want to contact them again. The reason they gave you doesnt make sense. I have heard of banks declining because you already have established credit but not for not having enough established credit.

You might try other banks and credit unions.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 12:45:49 GMT

All three are between 710 & 735. Citi has offered to unsecure my card. I chose not to. All are zero after the statement date. When I get the bill I pay all of my cards to a zero balance. I have two different auto loans, and a mortgage that shows PIF on my credit report as well.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 12:48:05 GMT

All three have offered to unsecure my CC's I requested they did not. I prefer a secured CC. I feel like there is less risk involved. Anything could happen. If the card is secured then the trade line can be paid.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 12:58:32 GMT

I did call them, and they stated the same thing. I did apply for a CC through another Credit Union that I use (Financial Resources Federal Credit Union: Membership open to everyone through American Consumer Council) I applied for the secured CC, and they called me and stated that they could approve an unsecured card if I like. I opted for the secured CC. It was approved, and is on its way.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 19:24:52 GMT

@Anonymous wrote:
All three are between 710 & 735. Citi has offered to unsecure my card. I chose not to. All are zero after the statement date. When I get the bill I pay all of my cards to a zero balance. I have two different auto loans, and a mortgage that shows PIF on my credit report as well.

I am not sure why you are applying for secured cards with those scores. Why would you not unsecure your Citi card? Just apply for regular credit or charge cards if you want them.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 19:27:16 GMT

@Anonymous wrote:
All three have offered to unsecure my CC's I requested they did not. I prefer a secured CC. I feel like there is less risk involved. Anything could happen. If the card is secured then the trade line can be paid.

That doesn't make any sense at all. Just put the money in your savings account. If you already have 3 secured credit cards what possible reason could you want for more? Also even what you are saying doesn't make sense. If you owe 300 dollars on a 500 dollars secured card and you can't make the payment you still get a late fee and messes up your credit. If you kept the 500 dollars in the bank and you had issues you could just transfer money from your savings to your checking and pay the bill.

Re: Declined secured credit card

Anonymous — Mon, 21 Aug 2017 20:25:50 GMT

I 'get' what the OP is doing in his/her mind, they in a certain way don't TRUST themselves with an unsecured account...they feel somehow the mere having of an unsecured account, increases chances of failure...
Like a superstition

As with all superstitions, those that "suffer" or have them make/feel certain things to be true that ppl that don't stress over the lucky sock can't/won't understand....

The secured account gives the OP a safety blanket feeling internally, like Linus from Peanuts... I'm not judging, I'm understanding the thought process.

All, we can is assure the OP us that based upon their past behavior and evaluation of such, it really seems that you can be trusted to pay, your bills w/o a hitch.

As mentioned, by placing the same funds...that you can't get to in a pinch to pay your bill, because the secured account doesn't work in the fashion where you just pull out a payment, you generally have to default to access those funds, so really the safety you FEEL is there really isn't....
For what you're trying to do ( have access to save yourself in a pinch) you are much better off, taking the unsecured account and putting your "security blanket" in a Money Market/Savings etc that you can write a check from if you feel the walls closing in.

* The reason folks ( bankers included) question certain behaviors is as mentioned, odd = possible RISK and will always cause some uneasiness, especially in the money business.

The 'concern' drilled into ppl to be careful, can sometimes over-program certain ppl to not trust themselves to move on.... like a kid not wanting to graduate and go to the high school, they just lack a little confidence that they can handle the situation but most will be fine ( of course, some will never leave the house again 😨)

This is just a matter of being confident, one can Captain the ship.... again some players can NOT mentally perform w/o that lucky sock....or can they?