Secured Card Questions

[nashfm]

I am going to get a secured card through my credit union to help re-establish my credit but I have a few questions. Is it better to have a card with a high limit and keep balance low or just to have a 500 limit and keep balance low? I am going to secure the card with my savings so I can do any amount up to $5000. Just womdering if scoring even sees the difference between a $500 and a $5000 lomit. Thanks

[Anonymous]

I can't answer about the scoring. One thing is FICO takes total credit card util. and total limit and from there they get the percent for utilization. So if you have two $500 cards, you'd be looking at charging about $100 for 10% utilization between both the cards.

If you have a secured card, lenders won't know it's secured. So you can get yourself a high credit limit for a secured card, and lenders when they go to evaluate your credit down the road for an unsecured card, will see you have a high credit limit on a card that at the time will be a few years old. Thus something for them to be more willing to start you on a higher credit limit when you first open an account.

[RobertEG]

FICO does not use CL in scoring, only % util of that limit.

The problem with lower CL cards is that it much easier to run up % util than for a higher CL card.

[MarineVietVet]

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@Anonymous wrote:

I can't answer about the scoring. One thing is FICO takes total credit card util. and total limit and from there they get the percent for utilization. So if you have two $500 cards, you'd be looking at charging about $100 for 10% utilization between both the cards.

If you have a secured card, lenders won't know it's secured. So you can get yourself a high credit limit for a secured card, and lenders when they go to evaluate your credit down the road for an unsecured card, will see you have a high credit limit on a card that at the time will be a few years old. Thus something for them to be more willing to start you on a higher credit limit when you first open an account.

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Could you have meant total credit card balances divided by total credit limits? That is how utiilization is calculated. 

And as Robert said the CL doesn't really matter as long as you are careful with the usage of that CL. He is also correct that utilization of a low CL card has to be managed much more carefully.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work

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[tommysofly]

sorry to steal your post there but i just wanted to ask if anyone have any recommendation on where to get a secured credit card that reports to the CRA.

because i done some research and it said not all secured credit card from banks reports to the CRA, is that true?

should i try getting it at a bank or a credit union? which one do you guys think is best.

[hoping2rebuild]

tommysofly I  don't know about alot of the secured cards out there but I went with BOA secured and Wells Fargo Secured.

Both of those report to all 3 CRA's and they have online funding and application

[Anonymous]

marinevietvet, I was wrong. The definition I gave earlier was what I had understood when first joining and learning of how utillization was factored. My bad.

[tommysofly]

thanks hoping2rebuilt for the replys.

since you have both of the cards with BOA and Wells Fargo.

which one do you prefer i'd rather go for? can you please tell me the cons and pros on both of them or are they about the same?

thanks in advance.

[MarineVietVet]

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@Anonymous wrote:

marinevietvet, I was wrong. The definition I gave earlier was what I had understood when first joining and learning of how utillization was factored. My bad.

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I get so many things wrong myself. I'd rather be gently corrected than continue to give out false information.

[hoping2rebuild]

Personally I like the Wells fargo the best because I do bank with them

Read the rates fees etc on both and choose the one that you like the best