Two questions regarding secured credit cards

[Flashman]

Hello Everyone,

 

I have two questions regarding secured CCs I am hoping someone can answer:

 

1) Has anyone on CB ever crunched the numbers and come up with the average length of time it takes for a secured card to graduate to an unsecured one?

 

and

 

2) Is it possible to rebuild credit (at least to a limited extent) by maintaining a single secured card?  By "limited extent," I mean having sufficient credit to eventually obtain, say, a $2,000 to $3,000 tradeline of unsecured credit starting with a card that ideally asks for no more than a $300 deposit (and preferably $100-$200).

 

(And yes, you read that correctly: in this case, the goal still would be a toy tradeline, albeit a tradeline with a limit many times the amount with which the cardholder started.  Also, I realise that when one is rebuilding credit and is stuck with having to resort to secured CCs, opening more than one account is the ideal way to go.  However I am wondering if it is at least within the realm of possibility to rebuild credit by maintaining a sole tradeline.)

 

 

 

 

[cashnocredit]

In my case,I started off with one secured card from WF. A few months later I added a Citi secured card. The Citi card was secured with a CD paying 4% APR. IIRC, the WF card unsecured after about 9 months. The Citi card after 1 year.

 

It's well established that 2 CCs have significantly higher FICO scores than one but the main impact will be any remaining negatives. Even a single one.

[StarkRaven$]

In regards to your #2 question, yes. I started rebuilding with only one secured card with just $200 funded line of credit. After two years I applied for a Barclay's cc which started off at $500 unsecured line of credit. It grew and within a year I obtained an Amex card. The rest is history and a good credit history to boot.

[Flashman]

22 hours ago, cashnocredit said:

In my case,I started off with one secured card from WF.

 

May I ask what sum WF (Wells Fargo, yes?) required in the way of a security deposit?

 

22 hours ago, cashnocredit said:

It's well established that 2 CCs have significantly higher FICO scores than one but the main impact will be any remaining negatives.

 

To recap: you are saying that maintaining 2 secured CC accounts would boost a FICO score both sooner and much higher than maintaining a single card?

 

 

 

Edited November 20, 2022 by Flashman

[Flashman]

6 hours ago, StarkRaven$ said:

In regards to your #2 question, yes. I started rebuilding with only one secured card with just $200 funded line of credit.

 

Could you please tell me who the issuer was for this particular card?  And did the card ever graduate on its own to an unsecured line of credit, or was its only real use that of a "springboard" to allow you to apply for other, better cards?

 

Also: am I right in thinking that cards that require a $100 - $300 security deposit are in the relative minority?  My rudimentary knowledge of secured CCs has given me the impression that $500 is the typical amount an issuer requires a would-be cardholder to put up in order to qualify, but perhaps $100 - $300 really is what most issuers are asking in 2022?

Edited November 20, 2022 by Flashman

[hegemony]

not all secured cards "graduate"

 

I suggest getting at least two from quality issuers. Some issuers allow you to securitize a larger amount, some 25k or more IIRC. The amount you put on deposit doesn't really affect being approved.

 

There is a master thread on secured cards; some info may be dated but it may help you get an idea of what is out there. I know a lot of people like SDFCU https://www.sdfcu.org/savings-secured-credit-card

 

IIRC SDFCU allows up to 100k LOL.

 

 

Edited November 20, 2022 by hegemony

[cashnocredit]

4 hours ago, Flashman said:

 

May I ask what sum WF (Wells Fargo, yes?) required in the way of a security deposit?

 

To recap: you are saying that maintaining 2 secured CC accounts would boost a FICO score both sooner and much higher than maintaining a single card?

3 hours ago, hegemony said:

not all secured cards "graduate"

 

 

This is important. Cards that graduate keep their "opened on" date and they also drop the notation that the card is secured. Check the master list as Hege suggested. Also, the security deposit only affects credit limits and they do not affect FICO scores which are based on the fraction of credit used, not absolute amount.

 

As for me, I opened both cards with the maximum deposit they allowed, WF:10k, Citi:25k. There's a reason my name here is cashnocredit. Now I have both.

[StarkRaven$]

19 hours ago, Flashman said:

 

Could you please tell me who the issuer was for this particular card?  And did the card ever graduate on its own to an unsecured line of credit, or was its only real use that of a "springboard" to allow you to apply for other, better cards? My card did not graduate to unsecured. but there was no credit check.  At the time I needed a secured cc my credit file was horrendous and I probably would not have been approved for a secured card. The name of the card is Open Sky OpenSky® | Rebuild Your Credit History (openskycc.com). 

 

Also: am I right in thinking that cards that require a $100 - $300 security deposit are in the relative minority?  My rudimentary knowledge of secured CCs has given me the impression that $500 is the typical amount an issuer requires a would-be cardholder to put up in order to qualify, but perhaps $100 - $300 really is what most issuers are asking in 2022? Not sure.

 

[pwd847]

Discover is usually who I push people to first when talking about a secured CC.  Their secured version of the Discover IT offers rewards.  I think BoA may offer 3/2/1 rewards as well.

 

SDFCU doesn't do a credit check for their card.  Although it's possible some other chexsystems or lexis nexis type of alternative report MAY prevent you from being approved.

Edited November 21, 2022 by pwd847

[Flashman]

On 11/20/2022 at 10:55 AM, hegemony said:

not all secured cards "graduate"

 

Yes, I understand this and am trying to develop a better understand of which specific issuers allow their cards to graduate within a reasonable timeframe vs. those issuers given to keeping their hapless secured cardholders on the hook for as long as possible.

 

On 11/20/2022 at 10:55 AM, hegemony said:

I know a lot of people like SDFCU https://www.sdfcu.org/savings-secured-credit-card

 

My guess is that an in-person visit would be required to open an account with SDFCU, is this correct?  I ask because an in-person visit to a branch is likely out of the question.  However, if it is possible to apply for an account over the phone and mail in a money order to get things started then this may be doable for the party in question.

 

On 11/20/2022 at 10:55 AM, hegemony said:

There is a master thread on secured cards; some info may be dated but it may help you get an idea of what is out there.

 

To clarify, is this:

 

...the thread to which you are referring?

 

On 11/20/2022 at 10:55 AM, hegemony said:

I suggest getting at least two from quality issuers. Some issuers allow you to securitize a larger amount, some 25k or more IIRC.

 

Yes, I understand that opening two account to start with would be the ideal way to go.  The problem is that I do not know whether managing two accounts is within the realm of this person's capabilities.

 

In the interest of practicality, I am trying to come up with the name of a single secured card issuer to recommend in order to get this person off the ground.  If she can successfully learn to manage the one account, she can then take it from there. 

 

(On the plus side, from what I can gather, a tradeline of $2,000 to $3,000 would suffice for her needs.)

 

 

 

 

[Flashman]

On 11/20/2022 at 2:39 PM, cashnocredit said:

As for me, I opened both cards with the maximum deposit they allowed, WF:10k, Citi:25k.

 

It is useful to know that additional funds could come in handy to help get things underway faster.  Alas, this is not likely to be an option.  Rather, this potential CC holder would be starting out with a deposit of from $100 to $300 and working her way up from there. 

 

The one advantage this person has is that the tradeline she is seeking is relatively small (< $3,,000).  So while she does not have much to start with, she isn't looking for much, either.

 

 

[Flashman]

On 11/21/2022 at 12:34 PM, pwd847 said:

Discover is usually who I push people to first when talking about a secured CC.  Their secured version of the Discover IT offers rewards.  I think BoA may offer 3/2/1 rewards as well.

 

From what I have been able to find so far, it does appear that BoA and Discover offer two of the better deals for people looking for a secured CC and who have between $100 and $300 to put down to secure the account.

 

On 11/21/2022 at 12:34 PM, pwd847 said:

SDFCU doesn't do a credit check for their card. 

 

Yes, but I am guessing an in-person visit would be necessary to open an account.  If so, that would make it a non-starter in this particular case.

 

 

 

Edited November 23, 2022 by Flashman

[Flashman]

On 11/21/2022 at 5:51 AM, StarkRaven$ said:

The name of the card is Open Sky OpenSky® | Rebuild Your Credit History (openskycc.com). 

 

Thank you for this suggestion; this card seems designed for those with a) atrocious credit or b) nonexistent credit.  And while I am not sure which of these applies in this case, exactly, I do know that one of them does apply.

 

The OpenSky card appears to be a potentially useful card, but my impression is that it is likely to take an OpenSky cardholder longer to obtain results.  Having said that, I think it might make a good alternative card if Discover/BoA secured cards turn out to be unobtainable and an in-person visit is necessary for an SDFCU account.

 

 

 

 

 

 

Edited November 23, 2022 by Flashman

[hegemony]

yes that is the master thread.

 

plenty of people have opened SDFCU memberships and cards without an in-person visit (unless things have changed).

 

 DCU's card is also one to consider: https://www.dcu.org/borrow/credit-cards/visa-platinum-secured-credit-card.html

[Flashman]

21 hours ago, hegemony said:

yes that is the master thread.

 

Thank you for confirming this.

 

21 hours ago, hegemony said:

plenty of people have opened SDFCU memberships and cards without an in-person visit (unless things have changed).

 

Ah, I was mistaken, then.  I thought an in-person visit would be necessary, but it is nice to hear this is not required.

 

21 hours ago, hegemony said:

DCU's card is also one to consider: https://www.dcu.org/borrow/credit-cards/visa-platinum-secured-credit-card.html

 

This seems to be one of the better secured CCs.  Thank you for suggesting it.

 

I am afraid that, in my near-total ignorance regarding secured CCs, I was under the impression that dealing with them would be far more straightforward than grappling with standard-issue, unsecured cards.  Not having messed about with my own CCs in some time, I had quite forgotten that anything related to credit has a great many moving parts and that a wise consumer cannot handle these things in a ramshackle, half-hearted sort of way.

 

I see now that I should have steered this person to CB from the very beginning; I had initially thought that asking the board for suggestions and passing them on would be a good idea.  However, it has become plain that, if she is seriously interested in acquiring and maintaining her credit, she ought to be the one asking all the questions and doing all the legwork herself. 

 

In the meantime, thanks to everyone who made suggestions regarding secured CCs in this thread.  With any luck, someone seeking a secured CC at present will find it useful.  I tried poring over old secured CC threads before asking any questions, but there do not seem to be many of these on CB (er, perhaps I missed something)?

 

 

 

 

 

Edited November 24, 2022 by Flashman

[pwd847]

I think the cap1 card got rid of the AF.