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Personal Finances / Credit Cards and Consumer Debt
|Subject: Re: After bankruptcy: secured CC||Date: 4/4/2013 2:56 PM|
|Author: lcd186||Number: 306900 of 311357|
Thank you everyone for your responses thus far. Hope to check by tomorrow morning for additional replies and more time to respond in detail.
Also I am planning to delay applying for a secured credit card until end of April (this month), or early May so I can do more research.
Right now, quick questions/responses to this:
I would agree in principle with your lawyer's advice. However, I would strongly suggest that the amount of credit that you use on the card on a monthly basis be:
Thank you everyone for noting that this seemed high! FWIW I never stopped to think and ask the lawyer (the follow-up meeting was more than six months ago) about $100/month. At the final follow-up, he had a very quick and well-rehearsed summation of recommendations. He also works with people of higher incomes as well as individuals like myself (now on fixed income and low income). I wish I had thought about it at the time.
- 10% or less of the amount of the credit line on the card (so if you get a $300 credit line, the max you would charge each month would be $30)
Also it never thought about relative credit card utilization (percentage of available line of credit). Since all/most of the secured accounts I am considering requiring $200-$300 minimum deposit and I plan to open with just the minimum, that would be from 33-50% of total credit card utilization. Too high.
Does anyone know how low (in percentage terms) I can utilize might still be functional? And do I (should I) make an expense every month, or just perhaps every other month?
- only the amount that you already have available (in cash, a checking or savings account that you WILL NOT be needing for anything else) at the time that you make the purchase - no saying "I'll pay for it with the check that will come in next month". You may want to somehow set aside that money (like moving it to a different account, writing it in your checkbook register, etc.) so that you will know that this amount is no longer available for you to spend - it is being saved to pay off the credit card.
Yes, my plan exactly to have a specific amount in savings to cover every month, just in case.
Also I planned to just use it for regular expenses (in my case, groceries, household, or regular and expected bills), but not for grandiose and unnecessary shopping. I am thinking of using it as just a change in how I pay for things (instead of checking account, or cash), not as a way of, "oh good, I can spend more money than is in my budget," which is a deadly error in spending habits.
As far as which card to apply for, if you already have a relationship/account with a particular bank, you may want to see if they have a secured card with reasonable terms, even if they aren't on the list that you found.
My bank is TD Bank and I found this article: http://creditcardforum.com/blog/is-there-a-td-bank-secured-c... . Similar to Citi, this requires an in person application and requires a minimum of $500 to open a secured account. Reasonable APR (19.99% plus prime) and $29 annual fee. It sounds good, but I believe the Capital One and Wells Fargo cards are still my first choice. If/when I open a second secured account, I will consider TD Bank.
Thank you and will respond again tomorrow.
Lois Carmen D.
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