topic Re: Rebuilding CC options? in Credit Cards

Rebuilding CC options?

Anonymous — Thu, 29 Nov 2018 22:39:12 GMT

Currently in the rebuilding phase like many of you. Credit is sitting across the 500's for all 3 agencies. I did have a Capital One Secured card which went defunct you might say. So I guess I need to look into other options card wise to start over. I saw the Discover IT seems to pop over and over as a good card. Current the only major dept I have is my car and the ex's (long story) on my credit report. Have 3 collections to pay off and then I'm free of that mess.

Throw some ideas at me.

Regards,

Joe W

Re: Rebuilding CC options?

Medic981 — Thu, 29 Nov 2018 22:53:23 GMT

@Anonymous wrote:
Currently in the rebuilding phase like many of you. Credit is sitting across the 500's for all 3 agencies. I did have a Capital One Secured card which went defunct you might say. So I guess I need to look into other options card wise to start over. I saw the Discover IT seems to pop over and over as a good card. Current the only major dept I have is my car and the ex's (long story) on my credit report. Have 3 collections to pay off and then I'm free of that mess.

Throw some ideas at me.

Regards,
Joe W

Welcome to the myFICO forums!

Credit Cards to Avoid

There are many a subprime predatory lenders who are in business to take advantage of consumers who are trying build or rebuild their credit. These credit companies want to exploit individuals who either don’t know better or are desperate to rebuild and improve their credit situation.

All financial institutions are in the business to make money. Most do by providing financial services at reasonable cost to the consumer. Some are in the business to ride the line and letter of the law to make as much money from the customer for as fast and as long as possible.

Wherever you are in your credit rebuilding journey, whether you are starting your rebuild or feel you are getting nowhere, here is some practical information of where to apply for credit and where not to.

Remember, when you get any of these cards, for whatever reason, these credit cards should not be used to carry a balance, but only to establish credit. Use them so you can move forward and obtain better credit and larger lines of credit with lower interest rates and fees. Always, always, always pay off your balance in full every month. Never carry a balance. While rebuilding, if you do not have the cash to pay for it, don’t use a credit card. Using a credit card while rebuilding and not having the cash to pay in full is a recipe for disaster.

The many credit cards that are marketed to consumers with poor, bad or no credit are expensive. These credit cards may not require a security deposit, but the cost from the many high fees for the “privilege” of having and using them can be extremely high.

A credit card lender is considered subprime and predatory when they require application fees, processing fees, activation fees, and monthly maintenance or membership fees, in addition to annual fees and charge the highest interest rates allowed by law. This is how predatory lenders want to take advantage of you because you have marginal credit and do not know what else to do.

Add up all of these fees, and they can easily cost more in the first two years than a deposit on a mainstream secured credit card. The fees you pay predatory lenders you will never get back, unlike the security deposit you pay when you obtain an unsecured credit card. The fees that predatory lenders charge can cost more than some fees that the top tier rewards credit cards offer.

Credit One Bank

Credit One, not to be confused with Capital One, specializes in marketing credit cards to consumers with less-than-fair credit. Credit One offers the Official NASCAR Visa Credit Card, the Cash Rewards Visa Credit Card and the Platinum Visa for Rebuilding Credit Card. Credit One’s website is extremely confusing and vague about what kind of card you will end up with if you apply. Credit One’s annual fee could be anywhere from $0 to $75 in the first year and $0 to $99 thereafter. You might or might not get a grace period. The consumer might or might not get rewards on all purchases, or only some purchases or on none at all. Credit One’s rules are complicated and confusing on when the consumers' payments will post and when the available credit line is refreshed after making a payment.

First Premier Bank

The bankcard fees on First Premier Bank products are astounding. To begin, there is a processing fee before you even get your card. Based on creditworthiness, this fee can be as high as $95. The first years' annual fee can be as high as $125 with a continued annual fee as high as $49 and maintenance fee as high as $125, all which are based on what your credit limit is. To encourage the consumer to apply, First Premier Bank charges some of the highest interest for a credit card, a whopping 36% APR. This comes close to legal loan sharking.

Total Visa

Like the First Premier Bank Credit Card, the Total Visa starts piling on fees before the consumer even opens the account. If approved, the consumer must first pay an $89 processing fee to get the card. The annual fee in the first year is $75, beyond the first year the fee does drop to $48, however, the consumer begins paying a monthly processing fee of $6.25, which comes to $75 a year. Add the fees together and the Total Visa Credit Card will cost the consumer $164 the first year and $123 each year thereafter. The card also has an APR of 29.99%. You can do much much better!

Continental Finance Company

Continental Finance is a consumer finance company that offers a multitude of credit cards: Verve, Cerulean, Reflex, Surge, Fit, and Matrix. Continental Finance is charging a $125 annual fee for the first year for a minimum credit line of $500. In the second year, the consumer’s annual fee drops to $96, however, then a $10 monthly maintenance fee begins. This equals $216 in fees yearly along with a high 30.49% APR. Stay away, far, far away.

Genesis Bankcard Services

The Indigo Platinum Mastercard annual fee depends on a consumer’s creditworthiness. It could be a no annual fee (not very likely), or it could be $59, or it could be $75 the first year and $99 every year thereafter. What will you, the consumer pay? The only way to find out is to apply for the card. It’s safe to say, though, that consumers with bad credit are more likely to end up with a $75/$99 fee than a $0 fee. Even $59 is significantly more than you would pay in annual fees on a good secured card. The APR on the Indigo Platinum is 23.90%. That’s high but within the typical range for a credit card for bad credit. You can do worse than this card — but you can also do much better.

Milestone Gold Mastercard has fees that depend on the consumers' creditworthiness as well: $35 a year, $59 a year, or $75 in the first year and $99 in subsequent years. To at to the confusion, the first year’s fee might be divided between an “account opening fee,” which you pay before the account goes live, and an “annual fee,” which you pay afterward. The APR is the same as on the Indigo Platinum, again not the worst card, but far from the best.

Horizon Gold Card

Horizon Gold Card offers $500 unsecured credit and states “Bad Credit, No Credit? Low Score? NO PROBLEM!” Well, the problem here is that Horizon Gold is offering you a store card that you can only use online at the Horizon Outlet Mall. The problem continues with a one-time $5 “issuance and account validation fee” to get the card and a $300 yearly “membership” fee to use the card. Obviously, a secured card with a $300 security deposit from a mainstream bank would be far better.

My advice to anyone is if you are looking for a credit card, all of the above is a poor choice and you should look elsewhere. If you have one of the previously discussed credit cards, get rid of it as soon as possible as it is costing you more than it is worth.

Secured Credit Cards to Consider

IHMO, Discover It Secured is one of the best-secured credit cards for no or limited credit, poor credit, and bad credit applicants — and one of the best gas credit cards you can get with bad credit. Disco offers 2% cash back at restaurants and gas stations (one up to $1,000 in combined purchases each quarter) and 1% cash back on other purchases. You’ll need an up-front security deposit of at least $200 to apply for the Discover It Secured Card.

Capital One Secured Mastercard requires a refundable security deposit of $49, $99 or $200 based on your creditworthiness. Make the minimum required security deposit and you'll get an initial credit line of $200. Plus, deposit more money before your account opens to get a higher credit line. Get access to a higher credit line after making your first 5 monthly payments on time.

The Citi Diamond Secured Mastercard can help you establish, improve or rebuild your credit. Build your credit history by using your card responsibly. Best of all, there's no annual fee. Applicants must meet Citi Bank's credit qualification criteria for this card, which includes a review of your income and your debt. If approved, a minimum of $200 security deposit is required. The security deposit is always equal to your credit limit and will be held for an initial term of up to 18 months. You must not have any bankruptcy history within the last two years.

Bank of America's BankAmericard Secured Credit Card is designed to help establish, strengthen or rebuild credit for an annual fee of $39. A minimum refundable security deposit of $300 is required to open this account. Your maximum credit limit will be determined by the amount of the security deposit you provide, your income and your ability to pay the credit line established. If you provide a deposit that exceeds the calculated maximum amount based on your ability to pay, a will be returned to you for the difference. BoA periodically reviews your account and, based on your overall credit history (including your account with BoA and other credit cards and loans), you may qualify to have your security deposit returned. Not all cardholders will qualify.

Re: Rebuilding CC options?

CreditInspired — Thu, 29 Nov 2018 23:59:19 GMT

Until you get free of that mess, you shouldn’t apply for anything. With your low scores and collections, you will only garner HPs and declines, which will further decrease your scores.

So first things first—take care of the collections.

Re: Rebuilding CC options?

Anonymous — Thu, 29 Nov 2018 22:59:47 GMT

Yeah that's what I figured hah...Not really to worried at most it's like $1500 total. Peanuts compared to some of the horror stories I've been reading here. I couldn't fathom being 5 figures across multiple cards. Scares the bejesus outta me lol.

Appreciate the info good sir/madame

Re: Rebuilding CC options?

Anonymous — Thu, 29 Nov 2018 23:06:32 GMT

Medic981 gave a good summary of a group of cards that are called "fee harvester" cards - they exist to milk the consumer out of as much cash as they can as fast as they can. What Medic did not say is that very often, the CL on your new card is set to be just below the total of the fees they hit you with. I have seen Fee Harvester card statements with a $300 CL and $280 in fees, leaving a whopping $20 actual credit line, which will be eaten up by the first month's interest charges. Since you would have to pay the fees off BEFORE you use the card, you might as well just open a Secured card with the same amount of money in the collateral account. At least that way, when you close the secured card you get the money in the collateral account back. For God's sake, avoid the Fee Harvester cards at all costs. Better to have NO credit than THAT credit.

Re: Rebuilding CC options?

Meanmchine — Thu, 29 Nov 2018 23:13:26 GMT

Google "OpenSky"

Re: Rebuilding CC options?

Anonymous — Thu, 29 Nov 2018 23:14:48 GMT

@Meanmchine wrote:
Google "OpenSky"

+1 I had one for 2 years. Great secured card for rebuilding. No hard inquiry.

Re: Rebuilding CC options?

Anonymous — Thu, 29 Nov 2018 23:17:39 GMT

@Anonymous wrote:
@Meanmchine wrote:
Google "OpenSky"
+1 I had one for 2 years. Great secured card for rebuilding. No hard inquiry.

Will definitely look into it

Re: Rebuilding CC options?

Medic981 — Thu, 29 Nov 2018 23:24:38 GMT

I only recommend Opensky if you cannot get a secured major CC. The secured CCs listed will all graduate to unsecured at some point if you take care of your credit. Opensky will perhaps get your credit to the point where you can get a major CC however it will never graduate.

Re: Rebuilding CC options?

RonM21 — Fri, 30 Nov 2018 01:00:36 GMT

@CreditInspired wrote:
Until you get free of that mess, you shouldn’t apply for anything. With your low scores and collections, you will only garner HPs and declines, which will further decrease your scores.

So first things first—take care of the collections.

Welcome @Anonymous!! And to the above point, see if there is anything you can possibly do about getting the collections deleted by PFD or other. Depending on what your situations are with these collections, it may be worth a shot. If you do not mind, could you list the collections and amounts owed?

Re: Rebuilding CC options?

Malcono — Fri, 30 Nov 2018 01:49:52 GMT

@Medic981 wrote:
I only recommend Opensky if you cannot get a secured major CC. The secured CCs listed will all graduate to unsecured at some point if you take care of your credit. Opensky will perhaps get your credit to the point where you can get a major CC however it will never graduate.

I very much agree with this.

Use Opensky as a last resort.

But it's definitely very beneficial if you don't have any other options.

Re: Rebuilding CC options?

Anonymous — Fri, 30 Nov 2018 02:53:16 GMT

I started repairing / establishing my credit with a Discover secured card. They released my deposit back to me 6 months later and increased my limit within the same week. I would definitely reccomend them.

Re: Rebuilding CC options?

Anonymous — Fri, 30 Nov 2018 17:13:59 GMT

@RonM21 wrote:
@CreditInspired wrote:
Until you get free of that mess, you shouldn’t apply for anything. With your low scores and collections, you will only garner HPs and declines, which will further decrease your scores.

So first things first—take care of the collections.
@CreditInspired wrote:
Until you get free of that mess, you shouldn’t apply for anything. With your low scores and collections, you will only garner HPs and declines, which will further decrease your scores.

So first things first—take care of the collections.
+1

Welcome @Anonymous!! And to the above point, see if there is anything you can possibly do about getting the collections deleted by PFD or other. Depending on what your situations are with these collections, it may be worth a shot. If you do not mind, could you list the collections and amounts owed?

Oh yeah, already did my due dilegence with the 3 collectors and will keep on their asses as I know they can get lazy when re-reporting to the Big 3 for removals.

Re: Rebuilding CC options?

calyx — Fri, 30 Nov 2018 17:56:22 GMT

@Malcono wrote:
@Medic981 wrote:
I only recommend Opensky if you cannot get a secured major CC. The secured CCs listed will all graduate to unsecured at some point if you take care of your credit. Opensky will perhaps get your credit to the point where you can get a major CC however it will never graduate.
I very much agree with this.
Use Opensky as a last resort.
But it's definitely very beneficial if you don't have any other options.

+1

I was denied for Cap1 & DiscoverIt secured (and couldn't prequalify for any others), so I went with Opensky since they don't pull your credit. They charge their annual fee up front, and other than taking a really long time to post payments in the beginning, they've got a decent phone app, and they've been great when I've had to call customer service. It helped raise my score enough that after a few months I qualified for CitiSecured and an unsecured DiscoverIt.

Re: Rebuilding CC options?

Anonymous — Fri, 30 Nov 2018 18:02:55 GMT

@calyx wrote:
@Malcono wrote:
@Medic981 wrote:
I only recommend Opensky if you cannot get a secured major CC. The secured CCs listed will all graduate to unsecured at some point if you take care of your credit. Opensky will perhaps get your credit to the point where you can get a major CC however it will never graduate.
I very much agree with this.
Use Opensky as a last resort.
But it's definitely very beneficial if you don't have any other options.

+1

I was denied for Cap1 & DiscoverIt secured (and couldn't prequalify for any others), so I went with Opensky since they don't pull your credit. They charge their annual fee up front, and other than taking a really long time to post payments in the beginning, they've got a decent phone app, and they've been great when I've had to call customer service. It helped raise my score enough that after a few months I qualified for CitiSecured and an unsecured DiscoverIt.

I hear ya much appreciated. btw, how'd you setup that nice lil tag in the signature area?

Joe W