topic Question re: secure credit cards in Credit Cards

Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 02:31:55 GMT

It was suggested to me by a financial advisor to get a credit card with a low credit limit and low interest rate to help build up my credit. I only have two credit cards (one is an AmEx so I pay it off every month) and no hard inquiries in over a year. I'm a bit uncomfortable applying for a new credit card, especially since I'm in the process of preparing to buy my first home. So, he suggested getting an secured one. Does anyone have any experience with using one of these to help build your credit? Any suggestions about which one(s) to look into?

TIA!

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 02:42:44 GMT

@Anonymous wrote:
It was suggested to me by a financial advisor to get a credit card with a low credit limit and low interest rate to help build up my credit. I only have two credit cards (one is an AmEx so I pay it off every month) and no hard inquiries in over a year. I'm a bit uncomfortable applying for a new credit card, especially since I'm in the process of preparing to buy my first home. So, he suggested getting an secured one. Does anyone have any experience with using one of these to help build your credit? Any suggestions about which one(s) to look into?

TIA!

Since you already have 2 CC, I doubt a 3rd CC will be much help. I don't understand the low credit limit, low interest rate either.

Secured cards are good for rebuilding and establishing new credit and helpful in getting larger CL. I don't think you need one.

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 02:51:45 GMT

Thank you! I am trying to be rebuild my credit with the priority of getting preapproved for my first mortgage loan. I think the low limit stemmed from my discomfort with getting another CC (i.e., to keep myself in check and only make small purchases like gas then pay it off every month). I just want to make sure I'm making the right choices to help rebuild my credit!

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 02:53:51 GMT

@Anonymous wrote:
@Anonymous wrote:
It was suggested to me by a financial advisor to get a credit card with a low credit limit and low interest rate to help build up my credit. I only have two credit cards (one is an AmEx so I pay it off every month) and no hard inquiries in over a year. I'm a bit uncomfortable applying for a new credit card, especially since I'm in the process of preparing to buy my first home. So, he suggested getting an secured one. Does anyone have any experience with using one of these to help build your credit? Any suggestions about which one(s) to look into?

TIA!
Since you already have 2 CC, I doubt a 3rd CC will be much help. I don't understand the low credit limit, low interest rate either.

Secured cards are good for rebuilding and establishing new credit and helpful in getting larger CL. I don't think you need one.

Don't some mortgage lenders require three tradelines? That would be the only reason that would make sense to me if the OP (original poster) hasn't had three tradelines. But, if you've recently had a third tradeline I don't see how another one would help. Some financial advisors really don't know as much as you would think either. One suggested that my parents reduce their credit limits and close accounts to improve their credit, but, it actually lowered their credit quite a bit and made it very difficult to refinance their home. The only other reason another card would help is if you are carrying a balance because than it would make your utilization percentage look lower.

I really don't understand the advice to seek out a secured card in particular either. I don't really see how they would be scored differently and it would just take cash out of your wallet that you could use to pay down other balances.

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 03:11:43 GMT

Thank you! The secured CC suggestion stemmed from my concern that I would be turned down for a new CC because of my credit score which would then in turn reflect poorly on my report & lower my score...I'd much rather use the $ to pay down my CC with a balance & save for the down payment. And I want to do everything I can to increase my credit score. So, I'm not sure what to do!

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 03:22:58 GMT

Pay the credit card with a balance down below 10% utilization and see if that gives you what you need for credit score. It's amazing how much that can help especially if your at 80% and above utilization.

People here tend to suggest only letting one card report a balance. Basically, look at your statements, see what the statement date is usually, and try to have one paid in full and one paid down below 10% but above 1% before the statement date, then pay in full before due date. The credit card companies typically report what your balance was as of the statement date. Though, some of them lag quite a bit, my husband's Sears card takes over 20 days after the statement date to report his new balance as of the statement date. If your Amex is a charge card, then I don't think it counts in utilization scoring anyways, so just pay that one as you have been.

I have an 18 month old daughter myself and she was a surprise pregnancy. I've never felt so prompted to get my life back together. Went back to school, started working on my credit and just generally have been working on being a real "grown-up".. lol..

Re: Question re: secure credit cards

Revelate — Fri, 20 Apr 2012 06:23:46 GMT

@Anonymous wrote:
Pay the credit card with a balance down below 10% utilization and see if that gives you what you need for credit score. It's amazing how much that can help especially if your at 80% and above utilization.

People here tend to suggest only letting one card report a balance. Basically, look at your statements, see what the statement date is usually, and try to have one paid in full and one paid down below 10% but above 1% before the statement date, then pay in full before due date. The credit card companies typically report what your balance was as of the statement date. Though, some of them lag quite a bit, my husband's Sears card takes over 20 days after the statement date to report his new balance as of the statement date. If your Amex is a charge card, then I don't think it counts in utilization scoring anyways, so just pay that one as you have been.

I have an 18 month old daughter myself and she was a surprise pregnancy. I've never felt so prompted to get my life back together. Went back to school, started working on my credit and just generally have been working on being a real "grown-up".. lol..

To the OP: if you're looking at increasing your score or cleaning up your credit report, this is a good forum for it either over in the Rebuilding board or perhaps the in one of the general credit topic ones. A third card might be a marginal improvement but if you have an Amex already, I suspect your credit profile isn't *that* bad in the first place.

If you haven't already, pull a credit report (I would suggest the score too, it's a useful detail) and look through it, if you have questions there's a lot of good information on this forum to be found.

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 13:55:23 GMT

@Anonymous wrote:
Pay the credit card with a balance down below 10% utilization and see if that gives you what you need for credit score. It's amazing how much that can help especially if your at 80% and above utilization.

People here tend to suggest only letting one card report a balance. Basically, look at your statements, see what the statement date is usually, and try to have one paid in full and one paid down below 10% but above 1% before the statement date, then pay in full before due date. The credit card companies typically report what your balance was as of the statement date. Though, some of them lag quite a bit, my husband's Sears card takes over 20 days after the statement date to report his new balance as of the statement date. If your Amex is a charge card, then I don't think it counts in utilization scoring anyways, so just pay that one as you have been.

I have an 18 month old daughter myself and she was a surprise pregnancy. I've never felt so prompted to get my life back together. Went back to school, started working on my credit and just generally have been working on being a real "grown-up".. lol..

It seems we're in a similar place. My 13 (almost 14) month old was a HUGE surprise and has forced me to do those things as well! Now, getting her a house of our own (vs. renting) and providing for her future (both of which means improving my credit) are my priorities. It's been quite stressful facing and dealing with all of this but she's definitely worth it!

Thanks again for all of your help! I paid my CC to less than 9% of the revolving credit. The statement date has passed (payment is due on 4/22). So, I'm hoping it reflects by next month when the CRA update their reports!

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 13:56:30 GMT

What AMEX do you have?

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 13:56:45 GMT

@Revelate wrote:
@Anonymous wrote:
Pay the credit card with a balance down below 10% utilization and see if that gives you what you need for credit score. It's amazing how much that can help especially if your at 80% and above utilization.

People here tend to suggest only letting one card report a balance. Basically, look at your statements, see what the statement date is usually, and try to have one paid in full and one paid down below 10% but above 1% before the statement date, then pay in full before due date. The credit card companies typically report what your balance was as of the statement date. Though, some of them lag quite a bit, my husband's Sears card takes over 20 days after the statement date to report his new balance as of the statement date. If your Amex is a charge card, then I don't think it counts in utilization scoring anyways, so just pay that one as you have been.

I have an 18 month old daughter myself and she was a surprise pregnancy. I've never felt so prompted to get my life back together. Went back to school, started working on my credit and just generally have been working on being a real "grown-up".. lol..
+1

To the OP: if you're looking at increasing your score or cleaning up your credit report, this is a good forum for it either over in the Rebuilding board or perhaps the in one of the general credit topic ones. A third card might be a marginal improvement but if you have an Amex already, I suspect your credit profile isn't *that* bad in the first place.

If you haven't already, pull a credit report (I would suggest the score too, it's a useful detail) and look through it, if you have questions there's a lot of good information on this forum to be found.

Thank you! I have pulled both my credit report and scores and have been working on taking care of the (potentially) negative stuff on there. Thanks again!

Re: Question re: secure credit cards

Anonymous — Fri, 20 Apr 2012 14:14:31 GMT

@Anonymous wrote:
What AMEX do you have?

The AMEX Business card (green). I'm actually a cardholder on an account of my mother's. I know it reflects on my CR but not sure how much, if it affects my score at all.