topic Re: This is a "duh" question in Credit Cards

This is a "duh" question

makeynik — Sun, 07 Sep 2008 23:26:43 GMT

I am not sure how secured cards work. I went to BoA site and I got the jist that you send them money up to $1000, then you can go out and spend your money with them reporting...

Do they make you payit back in installments? While they still keep the balance? What if you never spend all the $1000? Like if you just want it for increasing fico...do they pay you interest??

Re: This is a "duh" question

llecs — Sun, 07 Sep 2008 23:33:38 GMT

You give them $$$ and whatever you give them is your new CL on your new CL. So, if you give them $1000, they will send you a $1000 CL. They will hold on to the money up to the point the card goes unsecured, which is usually from 9-12 months later. Then they will mail the money back to you. I don't think their reissue the money with interest.

Re: This is a "duh" question

makeynik — Sun, 07 Sep 2008 23:37:28 GMT

thanks for answering the question...
so if i send them 1G, then I spend $100, will I be required to pay the $100 back in a lump? Or do they give you a minimum, like other CC's?

Re: This is a "duh" question

llecs — Sun, 07 Sep 2008 23:43:13 GMT

makeynik wrote:
thanks for answering the question...
so if i send them 1G, then I spend $100, will I be required to pay the $100 back in a lump? Or do they give you a minimum, like other CC's?

Its just like any other CC. If you spend $100, then there is a minimum payment due by the next due date. It may only be $15, for example. If you had a $1000 CL, then you could easily spend $12,000 per year, assumining you PIF.

They are great to bank with.

Message Edited by llecs on 09-07-2008 07:43 PM

Re: This is a "duh" question

Uniqua — Sun, 07 Sep 2008 23:57:51 GMT

Basically, Makeynik, your deposit will be your credit limit. The bank will hold on to your deposit as security if you should default on the credit terms. Therefore, you use your secured CC as you would any regular/unsecured CC. If you make $100 in purchases, you will need to pay that $100 by the due date of your statement. The money does not come off of your deposit. The secured CC will be reported to the credit bureaus (some banks report to all 3 and some don't). This is to help you rebuild your credit. After a certain amount of time of on-time payments (usually between 6-12 months), the bank will then upgrade your secured CC to an unsecured CC and send you back your deposit.

It works like any other CC. DO NOT CARRY BALANCES and PAY ON TIME!! If you do carry a balance, do not let it go more than 30 days.

Hopes this answers your "duh" question.

Re: This is a "duh" question

Anonymous — Mon, 08 Sep 2008 12:32:46 GMT

"f you make $100 in purchases, you will need to pay that $100 by the due date of your statement. "

This is incorrect. If you make $100.00 in purchases, you only need to pay the minimum (like someone said probably $15.00). You can carry a balance on the card.

Re: This is a "duh" question

Uniqua — Mon, 08 Sep 2008 14:40:19 GMT

If you have the means to pay the entire amount, PAY IT and don't carry a balance. Paying the minimum balance and/or paying more than the minimum yet maintaining a balance has gotten many-a-people in trouble. Just check the barrage of complaints on myfico from people who have done this. Carrying for 30 days may be fine, but if you want to prove to the bank that you are a risk worth taking, pay your balances off every month. You can let a small balance report, just pay that balances before the due dates.