YACT (yet another credit thread) Which secured card is better?

[dabuddha]

Ok my credit rating is crap and I've been trying to rebuild it back up. All my accounts were paid off and closed last March. I was looking into getting a secured credit card to help me start rebuilding my credit. I'm not too clear on how the secured credit card works vs an unsecured card. Is my credit limit going to be how much money I have on the account? Also what are the interest rates for if I can't charge more than I have in the account? Will I get all my money back (minus fees) If I decide to close the card later on?

Here are the two I was looking at:

http://www.wellsfargo.com/credit_cards/select_card/secured/
http://www.bankofamerica.com/creditcards/index.cfm?template=cc_secured

I have a direct deposit set up with both banks. Wells Fargo is my primary account.

TIA for any and all information And I've searched on this topic but couldn't find any specific answers to my questions.

 

[StageLeft]

Not sure which card is better.

Yeah when you close account you'll get money back minus fees. They will still charge you interest if you are holding a balance though (even though it's your money).

Your limit will be generally equal to the amount that they are holding for you

 

[dabuddha]

Originally posted by: Skoorb
Not sure which card is better.

Yeah when you close account you'll get money back minus fees. They will still charge you interest if you are holding a balance though (even though it's your money).

Your limit will be generally equal to the amount that they are holding for you

So tell me if I have it right. Whatever money you put in as your "deposit" is your credit limit. That money is basically untouchable. Any charges you make using your card, you have to pay the CC company. They wouldn't deduct it from your "deposit"?

 

[RossMAN]

Originally posted by: dabuddha

Originally posted by: Skoorb
Not sure which card is better.

Yeah when you close account you'll get money back minus fees. They will still charge you interest if you are holding a balance though (even though it's your money).

Your limit will be generally equal to the amount that they are holding for you

So tell me if I have it right. Whatever money you put in as your "deposit" is your credit limit. That money is basically untouchable. Any charges you make using your card, you have to pay the CC company. They wouldn't deduct it from your "deposit"?

Correct on both accounts.

Most lenders will give you 100% of what your deposit is.

I'm lazy so I haven't clicked either link yet, which of these has a LOWER APR and what are their annual fees?

 

[dabuddha]

Wells Fargo
5.9% APR for the first 6 months

Annual percentage rate (APR) for purchases 5.9% for the first 6 billing cycles the account is open* after that,
17.24%
Other APRs Cash advance APR: 21.8%**


Penalty Rate: 23.9%.
See explanation below.***
Variable rate information Your APR for purchase transactions may vary. The rate is determined monthly by adding 12.49 percentage points to the Prime Rate.****
Grace period for repayment of balances for purchases 20 to 25 days if previous balance is paid in full by its due date
Method of computing the balance for purchases Average Daily Balance (including new purchases)
Annual fee $18
Minimum finance charge $1.00


Transaction fees for cash advances:
$10.00 each day an Overdraft Protection advance is made.
4% of the amount of each ATM, Wells Fargo Online Banking or Customer Service advance ($5 minimum).
4% of the amount of each SUPERCHECKSTM advance ($15 minimum).
4% of the amount of an advance at a participating Financial Institution ($15 minimum).
4% of the amount of each advance from any other source ($20 minimum).
Late Payment Fee: $30
Overlimit Fee: $30
Wells Fargo Rewards® Annual Program Fee: $19
Prime Rewards® Annual Program Fee: $70.

--------------------------------------------------------------------------------------------------------------------------------

Bank of America

It's in this PDF file but here's what I saw in it:

APR for purchases/balance transfers: Variable APR currently 15.24%

cash advance APR: 19.99%
penalty rate: 23.99%
annual fee: $29
minimum finance charges: $1.50 unless balance is zero

 

[RossMAN]

According to the VISA.com Visa Card Advisor it recommends

Wells Fargo Secured Visa

or

Cross Country Bank Visa Secured

Seeing as WF has no annual fee and you already bank with them, that's who I would go with.

Congrats

 

[dabuddha]

Originally posted by: RossMAN
According to the VISA.com Visa Card Advisor it recommends

Wells Fargo Secured Visa

or

Cross Country Bank Visa Secured

Seeing as WF has no annual fee and you already bank with them, that's who I would go with.

Congrats

sweet I'll fill out the app then thanks for the help!

 

[dabuddha]

Another question. If my parents were to signup for a new card and add my name to the account, would it reflect on my credit history?

 

[RossMAN]

Originally posted by: dabuddha
Another question. If my parents were to signup for a new card and add my name to the account, would it reflect on my credit history?

By "add your name" you mean add you as an authorized user, so you get your own credit card?

No, it would not reflect because your name and social security number were not on the credit application.

If your parents were to co-sign with you, that would definitely reflect on your credit history.

I sort of prefer the secured credit card option because you're establishing credit all by yourself.

 

[Confused]

YACCT?

 

[dabuddha]

Ahh well I was looking at the application for an American Express Blue ( just browsing around) and saw that besides all the information required for the applicant, I saw this:

Share the benefits of American Express with fee-free Additional Cards. Please issue Additional Card(s) to the following individual(s) age 18 and over.

and it requested full names, social security numbers, and DOB. I figured if it's asking for a SSN, that it will reflect on that person's credit history.

 

[RossMAN]

Originally posted by: dabuddha
Ahh well I was looking at the application for an American Express Blue ( just browsing around) and saw that besides all the information required for the applicant, I saw this:

Share the benefits of American Express with fee-free Additional Cards. Please issue Additional Card(s) to the following individual(s) age 18 and over.

and it requested full names, social security numbers, and DOB. I figured if it's asking for a SSN, that it will reflect on that person's credit history.

It may appear on your credit history but it will most likely indicate that you're only an authorized user not a signer on the application.

If I were you, I'd go the secured credit card route.

How much $ do you plan on depositing?

 

[dabuddha]

I'm thinking ill start with around $500. I can't afford to have too much stored in there. Should I try to go with more?

 

[RossMAN]

Originally posted by: dabuddha
I'm thinking ill start with around $500. I can't afford to have too much stored in there. Should I try to go with more?

$500 is perfect.

Besides after 1 year your credit should be established (assuming you use your cc and make on time payments).

Good luck, please let us know how it goes.

 

[dabuddha]

Originally posted by: RossMAN

Originally posted by: dabuddha
I'm thinking ill start with around $500. I can't afford to have too much stored in there. Should I try to go with more?

$500 is perfect.

Besides after 1 year your credit should be established (assuming you use your cc and make on time payments).

Good luck, please let us know how it goes.

Definitely will Thanks to your idea, I got my parents to sign a loan for me and I was able to pay off all my credit cards. Now I'm just paying them back $235 a month for 2 years and I'll be clear! You have no idea how much of a huge relief it was!