Frugal Credit Repair - Secure Debt
Once upon a time I was not the most responsible person with my money or my credit. To be totally honest I was actually not directly responsible for some of the dings on my credit report but the one benefit to a failed marriage was that I learned to never allow anyone access to my personal credit information. I will also never again allow someone to hold a second card on a credit account for which I am responsible.
What can happen when you do? Plenty.
My credit rating was in the toilet so bad at one point that I was actually turned down for a secured credit card from Bank of America! You read that right - a bank turned me down for a credit card that I sent money to secure. If you aren’t familiar with secured credit, here is how it works in a nutshell:
- The customer fills out an application with basic information such as name, social security number, address, phone ,etc.
- The customer submits the application along with a check or money order for security. When I did this, I sent them $300.
- The credit card company accepts the application and places the security money into an account. In the majority of cases, the amount you send in as security will be equal to the amount of credit you are initially issued.
In most cases you will be charged an annual fee that the credit issuer will charge to your card when they send it. When selecting a company for a secured credit card, don’t forget to read the annual fee statement as well as the APR (interest rate) you are being charged. There are companies that guarantee a 9.99% interest rate for the life of the card whereas many companies will charge as much as 24% even though you are securing the debt with your own money.
As always, do your homework and don’t bother getting a secured credit card if the company does not report to the credit reporting agencies, otherwise you are wasting time and money and who wants to do that?
March 15th, 2009 at 12:18 am
Commenting usually isnt my thing, but ive spent an hour on the site, so thanks for the info
May 21st, 2009 at 12:33 am
Very informative site, and very interesting posts. I have bookmarked your site, and will be back, good work guys.. thanks