Question abt Secured Credit Card
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My friend tried to get secured credit card with Wells Fargo and Chase. but they turned her down. Isn’t the secured credit card automatically approved for everyone?
I mean, you put certain amount of money down and that will be your credit limit.
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Tell your friend to try Discover, I don’t think they turn down anyone, even students.
Many years ago before I discovered the benefit of using CCs, BoA approved me for a secured CC with $500 CL. This was backed up by a $500 deposit to a checking account. It didn’t take long before they started offering me regular CCs with rewards.
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Few years ago, Discover was the only issuer which used to sent me many pre-screened offers but twice declined my application despite having excellent credit score and all other credit cards.
After the second denial I told them to shove it and never to send me another pre-screened offer.
Just my 2 cents.
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@ma-barker Discover denied her too
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@alexsj in that case, there must be something in your friend’s profile/report that FIs are seeing for them to deny your friend a secured card which is supposedly backed up by a C/A.
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@ma-barker said in Question abt Secured Credit Card:
@alexsj in that case, there must be something in your friend’s profile/report that FIs are seeing for them to deny your friend a secured card which is supposedly backed up by a C/A.
Are secured cards like credit cards in that if you are denied they are required to disclose the reason for the denial by letter? There should be some means to identify and address the cause of these multiple rejections.
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@fivetalents I’m not sure of that but from what I’ve read and experienced with CCs that denied some of my applications, none of them explained the rejection and I didn’t press further.
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@alexsj Might be a good idea for your friend to call and speak with a credit analyst about the denial.
Now-a-days all major CC issuers send a letter mentioning the reason for denial.
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@ma-barker yeah just a very generic explanation that she got in the letter as well…
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I’m guessing she wants a secured card to build a credit hx, and that a reloadable MC/Visa GC, a MC/Visa bank debit card, or
even the new PayPal MC debit card(too many fees) wouldn’t work?
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@alexsj tell your friend to try getting a secured card from a local credit union. If there’s still a problem, your friend has to check their credit report from the 3 CRAs, as well as Chexsystem, EWS so they can examine the reports line by line.
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I remember another trick reported on MyFico to get a CC to build one’s credit was to apply for a store CC. They called it the shopping cart trick done like this:
1. Go to the website of the store you want a card for.
2. Join their loyalty program (some people find more success skipping this step and just checking out as a guest). Add some items to your shopping cart.
3.Start to check out
4.Enter in your address, make sure this matches your address listed in your credit reports exactly
5.Continue going through the check out process until you get to the final payment page. You should receive your offer before this page, if you haven’t then either the shopping cart trick isn’t working or you need to try again.
6.Choose to accept your offer
7.Complete the applicationI remember stores like Dillards, Victoria’s Secret, Overstockdotcom, were the easiest ones to get approved and there was no HP. You’ll know if it’ll be HP if you’re asked for the full SSN, but if it’s only the last 4 digits, it’s a soft pull. I’ve read a DP where Overstockdotcom asked for the full SSN but still a soft pull.
If one makes small purchases using their store CCs and pay them in full before statement cuts, that’ll build one’s credit history in no time. As long as one uses these CCs responsibly, you’ll have a great credit history in no time.
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@fivetalents said in Question abt Secured Credit Card:
I’m guessing she wants a secured card to build a credit hx, and that a reloadable MC/Visa GC, a MC/Visa bank debit card, or
even the new PayPal MC debit card(too many fees) wouldn’t work?Not that this will help the OP, but I saw a review site that said PayPal had fees. However, according to PayPal themselves, that’s not true so I’m posting a correction:
“A debit card linked directly to your PayPal account balance, giving you simple access to your money with no hidden fees. The PayPal Cash Card is not a credit card, so no credit check is required. Plus, there are no monthly or annual fees, and no minimum balance requirement.”
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@fivetalents afaik, NONE of the prepaid V/MC reloadable/non reloadable cards are useful to build one’s credit. Applying for a secured CC will build one’s credit.
I remember a banker told me years ago that taking out a small loan from the bank and then paying it as agreed is also a good way to build one’s credit. I wouldn’t do it myself because I’m sure bank will charge interest on that loan depending on the terms but for those who are desperate to build credit, that’s an option.
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@ma-barker said in Question abt Secured Credit Card:
@fivetalents afaik, NONE of the prepaid V/MC reloadable/non reloadable cards are useful to build one’s credit. Applying for a secured CC will build one’s credit.
Yes, I know. That’s why I prefaced with “Not that this will help the OP.” My earlier comments were made not knowing if the OP wanted a secured card to build credit (a point the OP still hasn’t confirmed but is a reasonable assumption since she specified “secure”).
IMHO, paying high interest on a very small loan is a very cheap price to pay to build credit history… assuming you will adhere to all of the terms and and use credit very wisely going forward… otherwise it’s just throwing money away.
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@fivetalents I concur; for those who have a lot of options to build their credit history, they can turn to fee free methods but those who have no other means they have to “pay the price” so to speak.
Another option that came to mind since I’ve done this for close friends and family is to add them as AUs to my CCs with long history and high CL. This is a sure way to build their credit without doing anything. I don’t give them the AU card, but if it’s an amex I put charges on them for sync offers that are moneymakers. They are not responsible for any charges I make, I pay for them and they benefit from my responsible use of credit cards. In fact, I’ve had several offers from enterprising people to pay me a fee to “piggyback on my excellent credit” but I turn them down no matter how enticing the offers are. I know some people make a few hundreds extra doing business with these ‘credit booster’ companies.
I think that would be the best option for OP’s friend w/o costing him/her any money IF he/she knows of anyone willing to make them their AU (they may have to give their SSN to ensure it’ll be recorded by CRAs because without SSN, the CRAs will not be able to associate the CC to the individual). It bears to remind them also to share their SSN only to people they trust.
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That’s an excellent idea @Ma-Barker. At first I recoiled thinking “No, don’t trust someone with a proven track record of poor money/credit management with your pristine credit!” But then you added an aspect I’ve never heard of anyone doing before: not actually giving the AU the CC or number, AND using that account both for additional card bonuses for yourself (fair compensation IMHO) and to more quickly build credit for the AU. Win-win (assuming the primary account holder is trustworthy). I’m bookmarking this one.
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@fivetalents I can only speak for those I’ve helped using this technique which I got from the credit booster experts. I’d like to emphasize I DO NOT like their business model, it’s too risky for anyone to put their CCs for rent for monetary compensation. One requirement that turned me off was when he said I have to give him the PW on my credit karma so he will see my credit history aside from my CK Fako score. He11 NO!!! even if I can change my PW immediately after he makes his assessment whether I qualify or not to be his ‘business partner’. The ones I’ve helped have told me their credit scores went up just a few months after I added them as AU.
On my part, the benefit I get is to use the AU cards for sync offers that I like to get more credits. as stated…WIN-WIN. To add, I am not affected by all their other activities outside of this AU card issued to them which is IN MY POSSESSION at all times and I’ve tested the CCs if they’ll send the AU cards to other addresses and all said NO, the AU cards are sent only to primary card holder who’ll give the AU cards to their respective owners. That gives me confidence they can’t take hold of AU cards w/o my knowledge.
