topic Re: Secured Credit Cards: Credit Limits and # of Cards in Rebuilding Your Credit

Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 17:39:37 GMT

Before I go further, thank you for taking the time to read and respond to my questions. I have spent some time looking through these forums and must say that the information i have found here really opened my eyes and has turned out to be very valuable in my quest to rebuild my credit.

My current credit score is: 578 (Equifax) and 606 (TU)

I've had quite a few collections in the past. Most have been paid off and are showing a 0 balance though I have four collections that still have a balance. I have the money set aside to pay them, but am awaiting their responses to my PFD letters before I send them anything.

So my main question is regarding secured credit cards. I've been saving for a few months and have gotten 2,000 saved up for this purpose (After paying off the remaining collections). My question is two fold.

1. Should I take this 2,000k and get one large secured credit card, or multiple small credit limit cards. After going into collections, i haven't had a credit card (and the only loan I have is 6 years old and has never had a late payment).

2. According to what I've read on these forums (and please correct me if i'm wrong), I want to keep the balances between 5 and 9 percent. Can I charge more than that, and then when I pay it, ensure that the balance is below 5-9 percent, or should i never charge to the card more than that. My plan is to pay off my balances every month for the cards that I do end up getting.

And in case my future plans effect your answers: My goal right now is simply rebuilding my credit. I don't have any plans on buying a house or car in the next few years. I am simply trying to get my credit score to the point that when I do decide to ever get something that requires credit that I'll be able to do so.

Thanks for the help!

Re: Secured Credit Cards: Credit Limits and # of Cards

namvet — Mon, 23 Jan 2012 17:50:03 GMT

IMO, get one secured card and make timely payments for at least 6 months. Keep balance to less than 30% of your credit line. Then apply for a unsecured card. If approved follow the same proceedure above. If declined, wait 6 months and apply again. Good luck!

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 19:23:40 GMT

Thanks for the advice.

Is there any difference on the credit report regarding secured and unsecured cards? What are the benefits to converting to the unsecured credit card after x number of months?

Re: Secured Credit Cards: Credit Limits and # of Cards

namvet — Mon, 23 Jan 2012 19:31:40 GMT

@Anonymous wrote:
Thanks for the advice.

Is there any difference on the credit report regarding secured and unsecured cards? What are the benefits to converting to the unsecured credit card after x number of months?
There should not be any difference in reporting. Secured cards require a deposit in order to be approved. Unsecured = no deposit money tied up! Take your time to find the best secured card. There are many posts here to educate you in this area.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 19:34:10 GMT

Will do, thanks for your help!

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 22:56:32 GMT

So, it's best to put all the amount of money you have to 1 Secured Card than multiples from different provider?

Re: Secured Credit Cards: Credit Limits and # of Cards

namvet — Mon, 23 Jan 2012 23:10:48 GMT

Well you can open 2 if you wish but no more than that for now. This is just my opinion but other may have a different view. You should avoid a bunch of low limit cards. Most people just open a small limit card of less than $500 to start. You have an advantage because you can start with a higher limit. Take your time and get it right from the start then keep getting educated on the use of credit. You can get all of the best "educated" advice right here.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 23:28:25 GMT

Hello, I am rebuilding credit also (good luck to you!). I think different people will have different perspectives.

I personally would open 2 (although I had 1 secured and was approved for a very low $300 cl from Orchard Bank, but at least it was unsecured). If approved for an unsecured card, I would open a secured card with a high limit. The reason I personally would open 2 is because one of the reasons I get rejected is because 100% of my credit has been installments, and I needed to open up some revolving accounts.

If I already had other revolving accounts, then I might just do one. For my situation, having more than one is showing that I can make monthly payments on time (or before time) to more than one creditor.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 23:44:39 GMT

That seems to make logical sense PapasWifey.

I am in the same boat. I have NO revolving credit. In fact, the only positive thing on my credit report is a single loan from Sallie Mae that is six years old and is never late.

The multiple lendors seeing you can make on-time payments is the reason why I though it may be best to get multiple smaller limit cards as opposed to a single large card.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Mon, 23 Jan 2012 23:51:18 GMT

@Anonymous wrote:
That seems to make logical sense PapasWifey.

I am in the same boat. I have NO revolving credit. In fact, the only positive thing on my credit report is a single loan from Sallie Mae that is six years old and is never late.

The multiple lendors seeing you can make on-time payments is the reason why I though it may be best to get multiple smaller limit cards as opposed to a single large card.

If you decide to do 2 cards, they don't both have to be small limits. One could be for $1800 and the other for $200, or $1500 and $500 or whatever variation you choose. I personally would rather have at least one with a high limit, as long as the util is low. Again though, that's just my own perspective.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Tue, 24 Jan 2012 00:15:17 GMT

thanks for all the info. I am about to be getting 1 secured and was thinking about getting a second one like 3 months later not right away. So I guess I will be getting my first one with a high credit limit. Thanks again

Re: Secured Credit Cards: Credit Limits and # of Cards

Revelate — Tue, 24 Jan 2012 07:23:23 GMT

@Anonymous wrote:
thanks for all the info. I am about to be getting 1 secured and was thinking about getting a second one like 3 months later not right away. So I guess I will be getting my first one with a high credit limit. Thanks again

Nein, get them both right now

You're starting from effectively zero, get two right now for the following reasons:

- There's no sense taking another new account inquiry ding in 3 months, further setting back your time to a "real" credit card by 3 months.

- You don't get the extra 3 month history on the card: trust me when we're talking about six to twelve months to a reasonable card, this matters.

You can shortcut the process by getting additional payment history, and healing the new account / inquiry damage starting right now. Honestly I cringe when I see people trying to build credit history that apply for one, then wait for 3-6 months, then apply for another six months after that.... that's for prime people, not us. We'll get there eventually, but don't drag out your non-prime pain longer than necesary: go get the tradelines open ASAP.

I'd do the following: go apply at Orchard and see if you can get an unsecured card (even I did and my history is way more suck than yours), it'll be only a $300-500 CL, but that doesn't matter at the moment if you get an unsecured out the gate which gives you more options later.

Then go walk down to bank or CU that has a good secured card product, and drop your 2K there as a deposit on it. I'm partial to Bank of America's secured cards because they unsecure regularly at the 12 month mark, and they have one of the best secured products out there. If you hate BofA, trawl through the forums for some other secured card reviews.

Re: Secured Credit Cards: Credit Limits and # of Cards

Anonymous — Tue, 24 Jan 2012 11:49:13 GMT

@Revelate wrote:
@Anonymous wrote:
thanks for all the info. I am about to be getting 1 secured and was thinking about getting a second one like 3 months later not right away. So I guess I will be getting my first one with a high credit limit. Thanks again
Nein, get them both right now

You're starting from effectively zero, get two right now for the following reasons:

- There's no sense taking another new account inquiry ding in 3 months, further setting back your time to a "real" credit card by 3 months.
- You don't get the extra 3 month history on the card: trust me when we're talking about six to twelve months to a reasonable card, this matters.

You can shortcut the process by getting additional payment history, and healing the new account / inquiry damage starting right now. Honestly I cringe when I see people trying to build credit history that apply for one, then wait for 3-6 months, then apply for another six months after that.... that's for prime people, not us. We'll get there eventually, but don't drag out your non-prime pain longer than necesary: go get the tradelines open ASAP.

I'd do the following: go apply at Orchard and see if you can get an unsecured card (even I did and my history is way more suck than yours), it'll be only a $300-500 CL, but that doesn't matter at the moment if you get an unsecured out the gate which gives you more options later.

Then go walk down to bank or CU that has a good secured card product, and drop your 2K there as a deposit on it. I'm partial to Bank of America's secured cards because they unsecure regularly at the 12 month mark, and they have one of the best secured products out there. If you hate BofA, trawl through the forums for some other secured card reviews.

THANKS BUDDY