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Secured CC with BOA or Wells Fargo??


digitalscotch
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Hi,

 

As I'm working to build my business credit, I've been contemplating a secured card with BOA (my current bank) or Wells Fargo. I was going to put in 25K to a CD to secure it.

 

Is this a good idea, bad?? Any recommendations for other banks or Credit Unions?

 

I've banked with BOA for 12 years, and they show me no love at all. So I"m tempted to leave given other good options...

 

I'm open to any feedback. :-)

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@FixnCred,

 

My current scores: 6/18/17 FICO: EQ 676 TU 680 EXP 667

 

I have 6 paid medical collections from 2011. They will fall off in about a year, but I may try to get them deleted earlier if possible.

 

I have one paid judgement for a parking ticket - that didn't show up until AFTER I paid it - and I'm pretty sure the information listed is inaccurate. I disputed it and it was removed from TU, but not the other two.

 

Except my student loan which has a late payment a year ago, everything else clean for the past 2 years. some lates further back, but I don't know how much that counts.

 

 

DS

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Unless you are going to use the whole $25k I wouldn't suggest putting that much into the card. Put what you can and will use.

 

I believe BOA is only offered to certain people when they don't qualify for the traditional BOA biz card.

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Good News for you is that July 1 alot of what youre describing may disappear.

 

http://www.sfchronicle.com/business/networth/article/Starting-July-1-some-black-marks-will-vanish-11226582.php

 

Also, have you worked on a GW for your SL late?

 

I agree w/ BRBiz. If you're liquid $25K then you should holdout for a little bit and work on your reports.

 

You're not far from an approval. Do you have good cash flow?

 

What do you need credit for? Just to build business credit?

 

Depending on what your needs are.... a Biz CC might not be your best bet right now.

 

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FixnCred,

 

Yes, most of the year we have good cashflow. During the summer though, it is sparse. We work with schools so we make most of our money 9 months out of the year. My business does 1.3m a year, and I have 20 employees, many of whom are seasonal. I lay them off over the summer and they come back in the fall. I was thinking I'd put down 25K because it would help me with finagle things over the summer, and it would allow me to use that cash over and over rather than simply spending it. We have a lot of expenses so while 25K seems like a lot, it actually goes rather quickly.

 

I am working on my credit because I just took out a 200K loan from the business equivalent of a loan shark - making weekly payments. The sooner I can refinance that the better all round. I do use bluevine - which does invoice factoring - and they report on my business credit report so that is nice. I'm just needing to juggle for the next couple of months - I'm open to all ideas and suggestions.

 

Good news about the judgements! The article said medical collections that were paid by insurance would be deleted - mine were paid by me. Do you think that still counts?

 

DS

Edited by digitalscotch
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Sounds like you're a good candidate for that news article. I feel like sans those baddies you could start looking at non pg options with new cards with terms like 0% for 9-12 months.

 

You could get two BOA biz cards, Three Amex Cards, and One Chase Biz product in one swoop.

 

With all of those hefty SUBs and 0% offers that could increase your cash flow without fees like BlueVine.

 

Who was the loan shark? You need to consider the terms of that loan and payoff structure.

 

It may be worthwhile to let it run its natural course and use the new cards to offset.

 

I spend north of $250K each month on my cards. I've learned to use my cash flow to float all of that on Net 30 without paying interest by managing my caah to payoff in full each card every month.

 

The exception is that I keep $75 to $100K on my Amex Plum up to 55 days with the early pay discount.

 

Do your vendors accept CC payments withour fees?

 

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I meant unsecured cards not non PG. You have to PG all of those. Mainly, dont give up on BOA.

 

Also... how many HPs total and how many in last 6 months on all 3 bureaus. Any from Amex, Chase, or BOA?

 

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I don't know how accurate this is but myfico shows 1 inq in May (BOA cc), TU shows 2 from October (BOA) + Aug (Citi).

 

After yesterday there will be all the inq I ran yesterday. Amex, Chase, Discover (all approved) plus Citi (denied), AMEX Business (pending), BOA (pending).

,

My contractors don't accept CC - I'm wondering about using plastiq for that...

 

The loan sharks were IOU financial and EML - IOU was daily payments, EML is weekly payments. both are ridiculously high interest as you can imagine. This is one reason I'm focusing on my credit so much - for the sake of my business, I've got to be able to qualify for better terms.

Edited by digitalscotch
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Congrats on the aporovals.

 

However, you might have been 30 days premature on your apps.

 

You're likely to get lower limits and higher APR in your current credit profile. I wish you could have cleaned up your CRs before your app apree. You would've net much better results.

 

Nonetheless, you've got them now. Citi you might be able to recon. Wait to see what the letter says as reason for denial.

 

If you want to list exactly which cards and credit limits you were approved for I can possibly offer more advice on those applications.

 

Keep in mind that financial firms like IOU, EML, Bluevine, Kabbage, On Deck, Swift Capital, and so on are good deals for the right situation. It's too bad some of the sales reps there are incentivized to close deals no matter what the borrowers needs are.

 

This means they sell a high interest loan to a seasonal business with cash flow dips who doesn't need that type of loan.

 

You're looking for cash flow assistance and not a term loan and most of these organizations have a set interest rate you pay regardless of when you payoff.

 

Example: I have no debt. A project comes up and I need $100K for 6-12 months. I can use their money for the project knowing what my financial acquisition costs are and factoring that into the project.

 

The risk is taken with their money and my liquid keeps my other ventures and cash flow healthy. In other words I run my businesses cash flow rich and credit ready. I can drop $1MIL on credit cards and lines of credit if I had to at any given point.

 

It's pretty ugly. Plastiq is an expensive option. You're paying 3% for Net 30 and if you don't PIF youll be hit with the current prevailing APR. Unless you've got some 0% on these new approvals this is just as bad as IOU or EML.

 

Another possible problem here is that I suspect you got approved for personal cards which will report to your CRs.

 

This is going to effectively limit you to Net 21/25 before you get hit with high UTL and risk possible AA if you do not PIF. You could have even less than Net 21 depending on your due/close statement dates.

 

It seems like right now you've got a very small window to get some more Approvals before those new cards report.

 

 

 

Do you use Quickbooks? A nice alternative is Fundbox. They've got QB integration and better terms.

 

I have CB to thank for my credit success. That success has lead me to being able to build a multi million dollar business.

 

BTW... I started paying attention to CB in 2014 when my credit was far worse than what you have now.

 

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I wasn't trying to use these cards for my business, I am trying to build up my personal credit. At the same time, there are some business expenses that I can float on these cards that will help out. Plus, I get points with Delta so that helps too. Discover was 0% for 18 months. So I could do a balance transfer on one of my cards if I wanted. I thought that having these cards would also help because it lowers my utilization rate. Also, if I can float some of my personal expenses on here, then that helps me get through the rough times too.

 

My current FICO:

EQ: 667

TU: 680

EX: 676

June 18 CC Apps:

AMEX Delta Gold - Approved $5000

Chase - Approved $4800

Discover - Approved $6500

AMEX Business - Pending

Citi - Denied

BOA - Pending (don't expect approval)

I'm pretty happy with the outcome and I don't want to push it. So I am thinking I should just work on using these and paying them off regularly. I used the FICO simulator, so it looks like these new cards should add a couple of points to my fico, plus it will push my utilization down to 7.5% .

Edited by digitalscotch
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What I am trying to get you to see is that you could be sitting in the 740+ range and remain credit ready with the right products.

 

The problem with personal cards? When push comes to shove... you will use it. Business or not you've got to eat.

 

Once you revolve personal debt you for sure will put a lid on your credit scores from rising into the 700s depending on UTL.

 

With the right biz cards you can hide UTL and insulate against credit score drops due to UTL reporting in the slow season.

 

PayPal credit is a hidden tradeline. You might burn an HP on that. Freeze EX and give it a whirl.

 

Have you ever done a recon? I'm thinking Citi.

 

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I wasn't trying to use these cards for my business, I am trying to build up my personal credit. At the same time, there are some business expenses that I can float on these cards that will help out. Plus, I get points with Delta so that helps too. Discover was 0% for 18 months. So I could do a balance transfer on one of my cards if I wanted. I thought that having these cards would also help because it lowers my utilization rate. Also, if I can float some of my personal expenses on here, then that helps me get through the rough times too.

My current FICO:

EQ: 667

TU: 680

EX: 676

June 18 CC Apps:

AMEX Delta Gold - Approved $5000

Chase - Approved $4800

Discover - Approved $6500

AMEX Business - Pending

Citi - Denied

BOA - Pending (don't expect approval)

I'm pretty happy with the outcome and I don't want to push it. So I am thinking I should just work on using these and paying them off regularly. I used the FICO simulator, so it looks like these new cards should add a couple of points to my fico, plus it will push my utilization down to 7.5% .

As soon as you get yiur Amex card try for a 2X CLI online. If its not instant then you're not approved and try again in 91 days. You also shouls have did a total of 3 Amex cards in the same day. One revolving and two charge cards. Which card is pending? If it's a revolver then then you are probably declined

 

Call Chase 855 437 9530 and ask them to consider a higher credit limit like $10K. What is the exact card that you got approved for?

 

Discover... it is what it is. Hit the luv button every 31 days or so.

 

Citi you can call the EO and request a recon 800 733 0815

 

BOA was it busines or personal pending? Which card?

 

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Just got a call today from AMEX - approved for SPG BUSINESS 5K. Already hit my business credit account too. Woot!!

 

I think this means I have 2 charge cards. Which AMEX is a revolver and should I apply now or wait?

 

 

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Edited by digitalscotch
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Nice job! Good timing on the SPG. It might get nerfed due to Marriott merger.

 

You can try 2X CLI now on the SPG or the other one you just got approved for.

 

Let's see what happens to this card later this year. The SPG card is a revolver.

 

I'd slow it down unless you can meet all the SUBs without carrying a balance.

 

So now to do the recon calls.

 

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I was just reading some of your posts on the business credit forum about Chase Ink. Should I apply for that today as my last card?

I think I can meet all the subs easily to get the bonuses.

 

One question though: I'm confused about PIF vs carrying a balance. I thought you want to carry some to show utilization. If you PIF, doesn't it look like you don't use the card?

Edited by digitalscotch
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You could try for the Chase Ink Preferred or Cash. However, the best way to maximize Chase is with in branch pre-approvals.

 

Look for a $500 checking account coupon and then put that $25K in there. Make sure you meet with a business bankee to open the account.

 

Find one of the smaller branchds with a business banker and set an appointment. Bring that coupon and open a checking account. If they don't mention it ask if there are any pre approvals for you.

 

With your recent approval it might not be available. If there are no pre approvals you can have the banker submit a paper application which goes to a separate UW dept. than the online application. They can also bypass 5/24 in this dept.

 

Net 30 high balance showing or any business revolving credit product with the high balance reporting is what you want. However, you need to time due dates and statement cut dates to ensure you don't pay interest by paying in full.

 

Lets say you have a $25K CC and rack it up to $30K because its a siggy card and you usually can go over the CL. You'll still want to pay in full to avoid interest. It will report the high balance as well as low UTL because you PIFd. This is ideally what you want. The exception would be for 0% interest periods.

 

If you carry a balance on credit products which report to personal then it will lower your score guaranteed. There is no upside to carrying a balance other than 0% promo periods.

 

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This may be a dumb question - but what is the point of getting all these credit lines if you are going to pay in full every month?

 

Obviously, I'm very new to this game. But I like games, and I always play to win. I just understand the rules quite yet.

 

Thanks for your patience and staying engaged.

 

DS

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Well not a dumb question. A good one actually. With all due reapect. Your line of thinking is what keeps small businesses... well small.

 

Debt is horrible. It's a ball, chain, and whip. If you spend your profits on interest debt you will never grow.

 

For some people, they just want to make $50K to $75K per year which is enough for them to be happy. Theres a right way and a wrong way of being content on that annual sum.

 

The difference is interest paid to creditors rather than being paid to yourself. I'd rather pay myseld interest than the banks.

 

I do this by using their cards to earn rewards or to float a balance interest free.

 

I manage my account balances well enough that I can pay in full each month and rack it back up again. This makes me roughly $3500 to $5000 per month alone as we spend north of $200K each month on our CCs.

 

This is all regular organic spending for our entire operations.

 

Do you really want to pay the banks interest?

 

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Hi,

 

No offense taken. No, I don't want to pay the banks interest and YES, I do want to grow my company. We are at 1.3m right now, and I'm just trying to get things in better financial shape so that I'm not struggling so much - we spend about 125k a month, but mostly on payroll and contractor payments - so unless I use plastiq, there is no way for me to put that on my credit cards.

 

I am hoping to build up enough credit though that I can float a lot of our expenses and conserve cash without exceeding the 30% mark on the ratio.

 

I have a question about floating money and paying in full. So I get that you want the card to show usage but to carry no balance. Question: how do you time that? Pay the balance as soon as the statement comes or on the due date? How does the timing on that work. I read elsewhere on this board that if you have a balance and pay it down in the middle of the month, that it doesn't reflect in the statement - it only shows the balance at the time the statement was cut...

 

For example - I have a 5K AMEX and charge 3K in airline tickets. Do I pay it before the statement is issued, immediately after, or wait till the due date? I'm assuming you want it to show the usage and reflect no balance.

 

My second question is: when I run the simulations on myfico.com and compare paying off my credit card in full vs. carrying a small balance and paying smaller payments over a longer period of time - the score is much higher with the smaller payments over more time. Can you explain how this fits into the bigger picture because I'm confused about which is better - PIF or carrying a small balance. (focusing only on the FICO score implications and not on how much interest is paid)

 

DS

Edited by digitalscotch
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