Rebuilding credit & Secure Credit Cards

Cardinals.Ken · March 2nd, 2009, 10:02 AM

Is the use of a secure credit card a viable option as part of a credit rebuilding program?

Does anyone have any pointers as to what to look for when it comes to deciding which secure credit card to get?

I've checked a dozen out so far, and most won't let you see the terms and conditions until you apply, the others seem to be a financial rape waiting to happen.

Any advice would be greatly appreciated.

Ryanwb · March 2nd, 2009, 10:05 AM

I got my sister a secured card through BofA about 6 months ago. She had to put down $300 bucks and make payments like it was a credit card. It helped her credit big time, also she should get the $300.00 back after a year or so. The interest rate was like 12% or something

Cardinals.Ken · March 2nd, 2009, 10:09 AM

Quote:

Originally Posted by Ryanwb

I got my sister a secured card through BofA about 6 months ago. She had to put down $300 bucks and make payments like it was a credit card. It helped her credit big time, also she should get the $300.00 back after a year or so. The interest rate was like 12% or something

I could probably look this up, but did she need to have an account with BofA to qualify?

Ryanwb · March 2nd, 2009, 10:12 AM

Quote:

Originally Posted by Cardinals.Ken

I could probably look this up, but did she need to have an account with BofA to qualify?

No she banks at a credit union. We did this online, you submit your information, how much money you are willing to put up for your "credit line" and they process the order. We didn't know she got accepted until a few days later $300.00 came out of her account. She had horrible credit, with closed accounts, a repo and multiple open accounts (that we've since closed)

Good luck, Wells Fargo also offers a comparible card as well. I have heard you should stay away from the banks you've never heard of. Of course this all occured before the economy took a dump so I don't know if any of this still applies

dreamcastrocks · March 2nd, 2009, 10:34 AM

Its funny that we have this thread. We signed up Linda for one just Saturday at Wells Fargo.

There's a $19 annual fee and around 17% interest, minimal finance charges etc. She plans on using it only for gas purchases.

Linda had to open up a checking account with them. She had a checking account a few months earlier, but closed it when we went to a joint account at my credit union.

Our credit union doesn't offer secured credit cards. The fact that the don't absolutely baffles the mind. You get X amount of dollars UP FRONT, and then you have to pay back whatever you charge on it in monthly payments. It's like getting money interest free. I'm shocked that they don't offer it.

Brian in Mesa · March 2nd, 2009, 01:37 PM

Just say no to credit cards.

HeavyB3 · March 2nd, 2009, 02:24 PM

Quote:

Originally Posted by Brian in Mesa

Just say no to credit cards.

Having good credit is still neccessary. Credit Cards are a good way to help that.

AZZenny · March 2nd, 2009, 02:30 PM

DCR -- I'm surprised also the credit union doesn't do that -- but maybe they think it's not a secure investment -- or maybe they have other suggestions to rebuild credit.

I heard about the secured cards on NPR recently, and their financial guru recommended them for a guy (a musician in my old stomping grounds of Athens Ohio) who didn't have bad credit, and he had a sturdy bank account -- he just had NO credit because he'd always paid in cash for everything, and the one time he borrowed for a new car years ago, he got (and repaid) a loan from his father. Now he's hitting 40 and wants to build up credit and the woman said this is absolutely the best way to start.

Then next step is to get a very small loan to buy something necessary, not frivolous -- like buy a $500 appliance or something on store credit -- have the cash up front in your account, but pay off the loan from a checking account on the set schedule, not faster, so you look reliable over time. The guy groused about hating to pay the interest to do that, but she said to consider it the cost of 'buying' a good credit rating.

dreamcastrocks · March 2nd, 2009, 03:05 PM

Quote:

Originally Posted by AZZenny

DCR -- I'm surprised also the credit union doesn't do that -- but maybe they think it's not a secure investment -- or maybe they have other suggestions to rebuild credit.

I heard about the secured cards on NPR recently, and their financial guru recommended them for a guy (a musician in my old stomping grounds of Athens Ohio) who didn't have bad credit, and he had a sturdy bank account -- he just had NO credit because he'd always paid in cash for everything, and the one time he borrowed for a new car years ago, he got (and repaid) a loan from his father. Now he's hitting 40 and wants to build up credit and the woman said this is absolutely the best way to start.

Then next step is to get a very small loan to buy something necessary, not frivolous -- like buy a $500 appliance or something on store credit -- have the cash up front in your account, but pay off the loan from a checking account on the set schedule, not faster, so you look reliable over time. The guy groused about hating to pay the interest to do that, but she said to consider it the cost of 'buying' a good credit rating.

Exhibit 23 on why our banks are failing.

Only banks can say that receiving 100% of an investment up front is a non secure investment.

Brian in Mesa · March 2nd, 2009, 04:33 PM

Quote:

Originally Posted by HeavyB3

Having good credit is still necessary. Credit Cards are a good way to help that.

Ryanwb · March 2nd, 2009, 04:38 PM

Like it or not, many employers are pulling credit reports as part of the hiring process. Obviously things out of your control, identity theft, divorce are exceptions.... So companines are asking, "Why should I hire someone who can't manage their finances?"

HeavyB3 · March 2nd, 2009, 04:38 PM

Quote:

Originally Posted by Brian in Mesa

I don't know about you, but I sure as hell couldn't have paid outright for a house. Thank God I had good credit.

Brian in Mesa · March 2nd, 2009, 04:42 PM

Quote:

Originally Posted by Ryanwb

Like it or not, many employers are pulling credit reports as part of the hiring process. Obviously things out of your control, identity theft, divorce are exceptions.... So companines are asking, "Why should I hire someone who can't manage their finances?"

If I was an employer, I'd hire the guy who has no credit card debt, no car payment, money in the bank (savings and emergency funds), and besides regular utility bills only has a mortgage payment to pay each month instead of the guy with credit card debt, a car payment, very little in the bank, other misc debts, utility bills and a house payment.

I'm just saying.

Jersey Girl · March 2nd, 2009, 04:46 PM

Quote:

Originally Posted by Brian in Mesa

If I was an employer, I'd hire the guy who has no credit card debt, no car payment, money in the bank (savings and emergency funds), and besides regular utility bills only has a mortgage payment to pay each month instead of the guy with credit card debt, a car payment, very little in the bank, other misc debts, utility bills and a house payment.

I'm just saying.

That would certainly limit your pool of applicants.

Just saying.

Ryanwb · March 2nd, 2009, 04:51 PM

Quote:

Originally Posted by Brian in Mesa

If I was an employer, I'd hire the guy who has no credit card debt, no car payment, money in the bank (savings and emergency funds), and besides regular utility bills only has a mortgage payment to pay each month instead of the guy with credit card debt, a car payment, very little in the bank, other misc debts, utility bills and a house payment.

I'm just saying.

Sorry I would look at a guy with zero debt as an embezzler that hasn't been caught yet or a guy who inherited a lot of money and has little to no motivation to achieve high performance

I'm just saying