Searching for Information on Acquiring Secured Credit Card

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Post subject: Wells Fargo,Chase Manattan & Citibank secure credit card

Bruce
Date: 10/12/2000 4:56 pm CDT

I am interested in building my credit back to + status with well known credit card companies such as: Wells Fargo,Chase Manhattan and Citibank, but need to know how difficylt it is to get secure cards from the three above banks other than send require deposits. What experiences have others on this board had getting secure cards with these banks? TIA!!

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Eugene Skorodinsky
Date: 10/12/2000 11:07 pm CDT

Bruce, secured cards by definition mean that you are supposed to open another account at the same bank and deposit funds there to secure your credit card account.
If you do not want to give them security deposit, you should probably look for cards from sub-prime lenders, those mentioned in your post are NOT among them. (Providian is the biggest one that comes to mind). Expect higher APRs, annual fees, aplication fees, processing fees, NSF fees, returned payment fees, late fees and other your-bank-is-not-in-the-right-mood-today fees, which, together with the pain of less courteous service from those issuers, can really cost you more than that security deposit in a better bank.

Another thing is: why do you want to rebuild credit "with well known credit card companies"? The fact that they are well-known does not neccessarily mean your credit with them will be. In fact, when I researched secured card opportunities about a year and a half ago, I found out that Citibank does not report secured credit card activity for as long as 18 months. Then they review you account activity and MIGHT offer you an unsecured card. Now imagine for a second they don't - you are screwed, you HAVE TO stay with them untill they finally do, and that might mean more than just two annual fees and a lot of waiting. I personally wanted to be more in control, and I was right - I opened a card at a bank that does report and got the first offer for an unsecured credit card without any extra fees from another bank after only 6 months of using the secured card.

Don't look for a "well-known" bank to open a secured card, open for a bank that:
(1) makes you "well-known" - regularly reports your positive activity to credit bureaus;
(2) does not have a bad reputation (I get an impression that Providian does, by the way);
(3) pays higher interest on your security deposit;
(4) charges lower annual fee;
(5) preferably, gives you higher credit line than the amount they require as security deposit (most banks require 100% of requested credit line, though).

Eugene.

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Linda
Date: 10/13/2000 0:18 am CDT

I used Providian to rebuild my credit. I had no problems with them at all. Now I invest in them. They know what they're doing.

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tim
Date: 10/13/2000 8:10 pm CDT

I agree. Providian does have a high interest rate but they are the only one who gave me unsecured credit after a period of bad credit.In the course of a year my limit went from $650 to $1950. Although they did charge me a one time credit limit increase fee of $100.00, I paid it. I paid it becuase it was far worth the benefit of showing that i could handle the extra responsibility of additional credit.The interest rate is high but I am slowly transferring the balance to a Capital One Card where the interest rate is 9.9%, but my limit is not that high. I will still keep the Providian because I am loyal.They helped me when I was in need, and I feeel that I owe them at least until the time when other banks offer me a lower interest rate and higher credit limit.

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miles
Date: 10/15/2000 3:39 pm CDT

Tim, you may want to call Providian and ask them to lower your interest rate. If you have been with them over 1 year and have made your payments to them & other creditors on time, they may be willing to work with you. If the representative states that he/she cannot help you, ask them who you would need to talk to about the proper procedure to close your account. Don't close it if you really don't want to. Just let them know you are thinking about it and want to know the proper procedure. They will more than likely transfer you to a retention specialist who should lower your interest rate if you tell them that is the reason you are thinking of closing your account. It worked for me. My interest rate was lowered to 16%. It is still not the greatest interest rate, but with the way the feds have raised them, it is comparable if not better than many other issuers. Good luck!

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Eugene Skorodinsky
Date: 10/23/2000 2:03 am CDT

tim wrote:
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> I agree. Providian does have a high interest rate but they are the only one who gave me unsecured credit after a period of bad credit.

That is very good for you but it says nothing about their credibility. I know that they try to get more percentage of their profits from fees than many other banks, and I personally don't like that. Their practice of raising interest rates when you least expect, and most importantly, least deserve it, is also well known.

> In the course of a year my limit went from $650 to $1950.

Mine went from secured $500 to unscured combined $11,000+ during the same time. Why? Partly because I changed banks.

> Although they did charge me a one time credit limit increase fee of $100.00, I paid it.

You might have had good reasons to pay this fee but I usually choose to do it for free. Every person's credit is different, though, and what one person qualifies for, another one might not. I prefer to pay fees only when I have to.

> I paid it becuase it was far worth the benefit of showing that i could handle the extra responsibility of additional credit.

You did not have to show it to Providian. You could have used any other bank that reports to credit bureaus - with the same or better result, but for free. That is one of the reasons I do not like Providian - they charge you for what others don't. They are called sub-prime for a reason, and I believe that as soon as you stop being sup-prime, so should your bank(s).

> The interest rate is high but I am slowly transferring the balance to a Capital One Card

Another bank with far too many customer complaints, by the way (see bellow).

> where the interest rate is 9.9%, but my limit is not that high. I will still keep the Providian because I am loyal.

Does being loyal (not to your friends, girlfriend or country, but to a bank!) mean more to you than closing an account that (1) you don't use, (2) you don't need, (3) doesn't have any perks, and most importantly (4) lowers your credit score? If so, Providian should be really happy to have customers like you.

> They helped me when I was in need,

No bank ever helped anybody because they needed help. They "help" (your terminology) because they think you might be a "profitable account" (theirs).

> and I feeel that I owe them

You don't owe them anything, Tim. You've paid your share of annual fees, interest charges and $100 credit line increase fees for their "help". It's a two way street - you have your convenience, they have their profit. Reading a tremendous amount of complaints about them on credit sites like this one, I think having and using a card from them is like sitting on a gunpowder barrel. The fact that you never had any bad experience with them is no guarantee that you won't in the future.

Of course you could find people who had problems with any of the credit card companies, even the best ones, but for me customer complaints that are (1) not emotional, (2) include facts to show that the issuer did not do enough to balance the customer's credit behavior and willingness to cooperate, (3) repetitive and (4) numerous, are a good indication to avoid certain issuers, like Providian, Capital One and First USA.

> at least until the time when other banks offer me a lower interest rate and higher credit limit.

Now you are talking. Don't keep sub-prime cards for more than you have to.

Eugene.

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Ira Stoller
Date: 10/17/2000 3:11 pm CDT

You haven't stated what credit problems you are having, or have had in the past. If you're not sure what's on your record, obtain copies of your credit history reports from all three major credit reporting bureaus. Information on how to do so will be found elsewhere on this board. If you have nothing negative, simply apply for the cards you want and see what happens. You may be pleasantlyh surprised. However, don't let a few new cards go to your head. If you've had problems with overspending in the past, make sure you won't have similar problems just because you get a few new cards.

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Andrew
Date: 10/19/2000 8:12 am CDT

Am I the only one who thinks that no one actually responded to Bruce's inquiry? I'm pretty sure the question he wants answered is if you have really crappy credit, does that bar you from getting a secured credit card, or will secured credit card companies pretty much give them to anyone who ponies up the required deposit regardless of credit history? I only note this because I was hoping to see his question answered as I had the same question myself.

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Board Monitor - CA
Date: 10/19/2000 10:33 am CDT

Andrew and Bruce,

Thanks for your posts and I am sorry Andrew if your post was not addressed directly. If you are wondering how hard it is to qualify for a secured card, then I may be able to help.

Generally speaking, it is very easy to qualify for a secured card, even if you have had serious credit problems in the past or have no established credit history. Even resolved bankruptcies usually do not prevent one from qualifying for a secured card.

There are a few qualifications that have to be met. These vary from card issuer to card issuer. Some typical examples include:

1) A minimum gross annual income of $10,000
2) A telephone in your home or apt.
3) 18 years of age or older

Hope this is the kind of info. you were looking for. If not, please clarify. Also, if you have not done so already, be sure to view our "Poor Credit" report. This report contains several secure cards. You can access this report by clicking on "Card Reports" from our home page.

Best Regards,
Curtis Arnold
CFCCT P.R. Director
http://www.cardratings.org

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CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!

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ShyGuy
Date: 10/24/2000 9:37 am CDT

Getting a secured card isn't as easy as you'd think it would be. It's not just a matter of making your deposit and getting a card. Wells Fargo, for example, won't issue a secured card to anyone you has filed for bankruptcy in the past year, and many banks won't issue a secured card to anyone who has ever declared bankruptcy. But I hear that Wells Fargo Financial's cards look, act and report just like Wells Fargo cards but are easier to get. The web site is wellsfargofinancial.com/consumer/cards/faq/index.html.

I've been calling and calling Chase customer service to try to find out what its requirements are for secured cards, but each rep tells me something different. I can't even get them to agree on whether the card is reported to the credit bureaus as secured or unsecured. (That's something else to consider.)

I wish I could help you more, but I'm asking the same questions myself.

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