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Charged off Secured Credit Card?

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Charged off Secured Credit Card?

I'm curious as to how a secured credit card can end up charged off? 

Years ago I was helping this guy establish his credit. He gave me permission to apply for a secured Bank of America credit card. He later came back and told me, when they went to pull the money from his account, it wasn't in there. He didn't listen to me when I told him he needed to have money in his account, but once he saw that they tried and failed, he told me he'd rectify the situation by adding the money swiftly. Shortly after, I stopped speaking with him(he's a huge liar and slacker) so I don't know what happened after that. I, however, later found out that this account was charged off. This account was opened on 10/18/16 and closed on 10/25/16. How could this have been charged off? I can only imagine one of two situations happening there: 

1.)Either he never funded the account and the card could not be never used. No debt incurred in order to charge off.


2.) He funded the account, used the money, and then didn't pay the bill. In which event, they would use his secured deposit to cover the bill....right? 


However, 273 was charged off on a 300 secured card. How is this possible?


Re: Charged off Secured Credit Card?

Scenario 2 seems most plausible, but with the open/closed dates so close together, there isn't even a chance for him to have run up the balance. You won't really be able to know without looking at his credit report.

About 6 years ago I had a charged off secured card with BofA as well. I had a $1000 balance, but ran the card up to the max during a brief period of homelessness about a year after opening the card. I too, thought they would just take the 1K and call it even (which in hindsight, might have worked if I had talked to them). But, they hit me with a $86 charge off! 

I am still not sure what happened to your friend, but it seems you already don't trust his version of the story, so you can only really know by seeing the reports. I would recommend paying the CO ASAP! As I do not believe BofA does PFD, but his scenario seems a little fishy. 

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